Victoria’s labour market might appear to be getting stronger, but one economist says that may not be the case.
According to the latest figures from Statistics Canada’s Labour Force Survey, the city’s unemployment rate dropped to 4.5 per cent in July, compared to 5.5 per cent in June.
This is the lowest the unemployment rate has been for the city since February of last year and the province has the third-lowest rate behind Manitoba and Quebec.
CIBC senior economist Royce Mendes said, however, we shouldn’t be deceived by these numbers as the low unemployment rate doesn’t necessarily reflect a stronger labour market.
“The unemployment rate can sometimes fall, but not for a great reason and this is one of those instances where the unemployment rate fell, but we can’t say it was all good news,” he said. “It was really because there were fewer people participating in the labour force.”
In other words, fewer people are looking for jobs so they’re not categorized as unemployed.
Mendes admitted that Victoria is performing far better than most of the country in terms of its unemployment rate.
“But, we can still say that the unemployment rate, the very low unemployment rate we’re seeing right now, is sort of an illusion because it’s certainly not a fully healed labour market yet,” he said.
He explained the reasons for people choosing not to actively seek employment varies from government subsidies to the fear of COVID-19, and lack of childcare services.
The province said it’s working towards encouraging people to job hunt by implementing programs like the skills training and employment program that was announced last week.
According to the provincial government, people choosing to stay out of the labour market is not new.
“That’s something that always exists. So, the question is how do we get more of those people into the workforce?” said Ravi Kahlon, the Minister of Jobs, Economic Recovery and Innovation.
He said jobs are plentiful and more people are working.
“Across Canada, B.C. continues to be a leader. We have seen the highest pre-pandemic employment levels, we’re the only province that has more people working now than prior to the pandemic and Victoria continues to be a shining light in not only B.C., but across the country,” he continued.
Mendes said the labour market will pick up after we get through a potential fourth wave and believes with this country’s strong vaccination rate, the economy will not be hit as hard with strict shutdowns.
READ MORE: StatCan data shows youth unemployment rates have risen during the COVID-19 pandemic
Tahmina Aziz
