Is the Recession Over in Canada?
Economists See Recovery, but Workers are More Pessimistic
Aug 28, 2009
After a long year in economic recession, many economists are pointing to a possible recovery. They cite indicators published by Statistics Canada: (a) sales rose by 1% in June 2009; (b) the composite leading index of economic indicators increased by 0.4% in July 2009 (first increase since August 2008); (c) a public opinion poll showed that 60% of Canadians think that Canada's economy will recover twice as much as that of the U.S.; (d) the Canadian Imperial Bank of Commerce cites that the average amount of time to find a new job is still at fifteen weeks; and (e) the Bank of Canada states that the summer of 2009 should show a 1.3 growth rate for the economy, again the first increase since last fall.
However, many others have a different view. In the City of Hamilton for example, the number of Employment Insurance recipients has risen by 139.1% over the course of one year from May 2008, with 5,220 claimants to May 2009, with 12,480 claimants. These numbers of course do not reflect the number of jobless that do not qualify for Employment Insurance, either due to not working enough hours or being part of the increasing non-traditional workforce. In a June 2009 report to Niagara Regional Council, the commissioner cited that applications for social assistance in the region have increased since the summer of 2008 and have not since abated; by the first quarter of 2009, the average monthly caseload has increased by 14.9% and total requests for social assistance increased by 25%.
In an article in the St. Catharines Standard dated August 25, 2009, some small businesses have noted a small increase in sales, particularly those dealing in second-hand goods. While the summer has been tough in the retail and hospitality sector, the St. Catharines-Thorold Chamber of Commerce has reported some optimism for the future coming from that sector. However, Stan Drobnich, Executive Director of Niagara's Employment Help Centre was not so optimistic. He stated that he has seen no evidence of region recovery. He further stated, "Locally, I think we're in a position where we're lagging behind (optimistic) statistics ...I think Niagara's going to take a little while to catch up."
One of the reasons why Niagara and Hamilton lag behind the rest of Canada is their traditional reliance on the manufacturing sector which has substantially declined during this recession. While manufacturing continues to remain a viable sector, it is only those industries where highly skilled and specific workers are being sought. Others, such as those jobs in U.S. Steel, John Deere, Dana Canada, Can Gro and other flagship organizations from the region are gone for good. Workers will eventually find other work, but only in sectors that are lower paid.
Trudy Parsons, Executive Director of the Niagara Workforce Planning Board, has found that with traditional manufacturing jobs disappearing, the landscape of the economy is changing. Employers that remain will be seeking workers with higher skills and more specific training, something that has not been demanded of many factory workers when they first applied and started working in a traditional auto plant, for example. In her organization's report entitled Niagara Region 2009: Supply and Demand indicates there will be a mismatch between the skills workers have and what they will need to meet the new demand for workers in the Region. Many of the new jobs that will come available, primarily as a result of retirements, demographics of the population, proximity to the U.S. border and resources, are going to be jobs that will require at least a college education.
One of the key problems Niagara will be facing as it moves out of the recession is the average age of available workers. While many will be willing to re-train, will employers be willing to hire them?
