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By Courtney Tower
OTTAWA (MNI) - Following are the key points from a speech by Bank
of Canada Senior Deputy Governor Carolyn Wilkins on Thursday, saying
that despite a strong economy, Canadian wage growth, which should
further strengthen output, remains below what would normally be
- Wilkins focused in speaking to the Toronto Region Board of Trade
on a job market in Canada that she said is important to understand as "a
bellwether of financial health and a useful gauge on inflation
pressures." On that basis, this market, by many measures, "is in good
shape." She cites a 5.6% unemployment rate which is for Canada "an
historic low." The participation rate for prime-age workers (aged 25 to
54) "is around 87 percent, near its all-time high." Canada's so-called
natural rate of employment is rated by the BOC as 5.5% to 6.5%.
- However, a key measure of job market health, she said, is wage
growth, which is subdued. Wage growth in Canada should be, according to
productivity, about 3%, she said. Rather, it averaged about 2.5% in 2018
compared with 2% over the past five years, and "we are still shy of what
one would expect in a tight labor market."
- Wilkins pointed out that "wage gains in energy-intensive regions
continue to lag behind those in the rest of the country." In the
beleaguered oil and natural gas industry in three provinces, wage growth
in the third quarter last year was just under 2%, Wilkins said. It was
about three-fourths of a percentage point higher in Ontario and Quebec.
Employment in the oil and gas sector has fallen by about 20% since 2015.
And goods-producing sectors, such as manufacturing and agriculture,
where globalization and digitization are prominent, are shedding
- All of this is occurring at a time when many businesses are
finding it difficult to fill jobs. A BOC survey reports "one of the
highest levels of labor shortages since the Great Recession." Job
vacancies total about 550,000. One key factor is that skills required in
the new digitalized industries are not available, while manufacturing
and natural resources sectors have a surplus of people with the skills
needed there. Other factors perhaps are a sense of caution in these
times with people reluctant to change jobs, or to relocate over Canada's
vast distances for better-paying jobs.
- Wilkins called on businesses to do more to help create workers
with the skills necessary for this new age. Businesses ought to partner
more with schools and universities, for instance in co-op placements and
other training. They should do more in in-house training. And their
competitiveness had to be improved, as "the foundation of a robust job
market." in other comments, Wilkins stressed that 2019 had gotten off a
"challenging start," with housing, oil, the US-China trade conflict, and
Brexit "top of mind for all of us."
--MNI Ottawa Bureau; email@example.com