(Bloomberg) -- The oil crash is pummeling Alberta’s labor market, pushing the province’s unemployment rate above manufacturing stalwart Ontario’s for the first time since 1994.
Alberta’s jobless rate rose four tenths of a percentage point to 7 percent last month, the highest since 2010, Statistics Canada said Friday from Ottawa. That puts it above Ontario’s rate - 6.9 percent - for the first time since 1994.
“We are on the cusp of a potentially historic turnabout,” Doug Porter, chief economist at BMO Capital Markets in Toronto, said by telephone. “The trend in Alberta is pretty wicked.”
Companies such as Cenovus Energy Inc. are firing workers and cutting capital spending as crude oil dips below $40 a barrel, from more than $100 last year. The central bank cut rates twice this year to cushion the shock. The currency is down 13 percent this year as a result, and that’s boosting momentum in Quebec and Ontario, which traditionally rely on manufacturing exports for growth.
Alberta’s unemployment rate is also approaching that of Quebec, where unemployment declined last month to 7.5 percent from 7.7 percent. Quebec’s jobless rate has only been lower than Alberta’s once - in 1986 - in four decades, Porter said.
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Copyright 2016 Bloomberg News.
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