Chapter 1: Labour Market Context

Global economic development

The beginning of 2022‑23 saw slower growth and rising inflation across the global economy, something that has not been seen since the 1970s.^{Footnote 4} The war in Ukraine, combined with lingering supply chain disruptions caused by the COVID‑19 pandemic, caused a sharp rise in energy and food prices world-wide. Unprecedented levels of inflation were observed globally in the first half of 2022 (consult Chart 3, for Canada).

During 2022‑23, central banks increased their interest rates while supply chain pressures eased and energy prices declined in early 2023. These factors all contributed to bring global inflation down from its peak, but it remained above target in most G7 countries – a group consisting of the world’s major industrialized and advanced countries including Canada.^{Footnote 5} Nonetheless, Canada had a lower rate of inflation (6.6%) than the G7 average (7.1%) over the 2022‑23 period.^{Footnote 6}

Canadian economic context in 2022‑23

Following the strong recovery in fiscal year 2021‑22, the Canadian economy experienced a slowdown in growth in 2022‑23. The real Gross Domestic Product (GDP) increased by 3.2% compared to 2021‑22, while it had increased by 5.7% in 2021‑22 compared to 2020‑21.^{Footnote 7}

Looking at quarterly movements, the Canadian economy remained resilient during the first 2 quarters of 2022‑23. Economic growth halted in the third quarter (-0.1%), as businesses and households adjusted to higher borrowing costs^{Footnote 8}, but growth resumed in the last quarter of 2022‑23 (consult Chart 1).

On the international horizon, Canada had the highest growth rate in real GDP among G7 countries in 2022‑23^{Footnote 9} compared to 2021‑22, and ranked third among G7 nations in terms of real GDP per capita (using fixed Purchasing Power Parity) with roughly US$46,359 per capita on average over 2022‑23.^{Footnote 10}

Text description for chart 1

Quarter	Real GDP at market prices ($ trillion, chained 2012 dollars) (left scale)	Change in real GDP at market prices, chained 2012 dollars (annualized quarterly percentage change) (right scale)
Q1 2020‑21	1.85	-37.1%
Q2 2020‑21	2.02	41.3%
Q3 2020‑21	2.06	8.8%
Q4 2020‑21	2.09	5.3%
Q1 2021‑22	2.08	-2.3%
Q2 2021‑22	2.11	5.8%
Q3 2021‑22	2.14	6.9%
Q4 2021‑22	2.16	2.6%
Q1 2022‑23	2.17	3.6%
Q2 2022‑23	2.19	2.3%
Q3 2022‑23	2.19	-0.1%
Q4 2022‑23	2.20	2.6%

• Source: Statistics Canada, Table 36‑10‑0104‑01.

As noted in the 2021‑22 Employment Insurance Monitoring and Assessing Report^{Footnote 11}, the post pandemic recovery remained uneven across industries during the 2022‑23 period. All industries registered a positive growth between 2021‑22 and 2022‑23. The sectors with the highest growth in 2022‑23 were Accommodation and food services (+19.1%), Agriculture, forestry, fishing and hunting (+13.1%) and Transportation and warehousing (+13.1%) (consult Chart 2). However, Accommodation and food services as well as Transportation and warehousing were among the few sectors still lagging compared to their pre pandemic levels (respectively -6.2% and -8.2% in March 2023 compared to February 2020).

Text description for chart 2

Industry	Change in real GDP 2021‑22 to 2022‑23
Accommodation and food services	19.1%
Transportation and warehousing	13.1%
Agriculture, forestry, fishing and hunting	13.1%
Other services (except public administration)	8.0%
Professional, scientific and technical services	8.0%
Information and culture and recreation**	7.9%
Mining, quarrying, and oil and gas extraction	5.9%
Public administration	2.7%
Business, building and other support services*	2.7%
Educational services	2.6%
Manufacturing	2.5%
Health care and social assistance	2.2%
Utilities	1.1%
Construction	0.9%
Finance, insurance, real estate, rental and leasing	0.3%
Wholesale and retail trade	0.3%

• ^* Includes management of companies and enterprises and administrative and support, waste management and remediation services.
• ^** Includes information and cultural industries and arts, entertainment and recreation industries.
• Source: Statistics Canada, Table 36‑10‑0434‑01.

Although the inflation rate in Canada was lower than the G7 average, it rose well above the target level of 2% set by the Bank of Canada in 2022‑23, especially in the first 2 quarters. The year-over-year rate of increase of the Consumer Price Index (CPI), or CPI inflation, peaked in June 2022 at 8.1% (consult Chart 3). Over the calendar year 2022, the CPI inflation was on average 6.8%, which represented a 40 year high.

In response to rising inflation, the Bank of Canada increased its policy interest rate 7 times over 2022‑23, for a total increase of 4 percentage points (p.p.), from 0.75% to 4.75%. Towards the end of 2022‑23, the impact of these rate hikes started to materialize with CPI inflation lowering to 4.3% in March 2023. In general, the purpose of policy interest rate hikes is to reduce aggregate demand to help slow down the economic activity, and which could have an impact on unemployment levels.

Text description for chart 3

Month	12‑month CPI change rate
Jan-10	1.9%
Feb-10	1.6%
Mar-10	1.4%
Apr-10	1.8%
May-10	1.4%
Jun-10	1.0%
Jul-10	1.8%
Aug-10	1.7%
Sep-10	1.9%
Oct-10	2.4%
Nov-10	2.0%
Dec-10	2.4%
Jan-11	2.3%
Feb-11	2.2%
Mar-11	3.3%
Apr-11	3.3%
May-11	3.7%
Jun-11	3.1%
Jul-11	2.7%
Aug-11	3.1%
Sep-11	3.2%
Oct-11	2.9%
Nov-11	2.9%
Dec-11	2.3%
Jan-12	2.5%
Feb-12	2.6%
Mar-12	1.9%
Apr-12	2.0%
May-12	1.2%
Jun-12	1.5%
Jul-12	1.3%
Aug-12	1.2%
Sep-12	1.2%
Oct-12	1.2%
Nov-12	0.8%
Dec-12	0.8%
Jan-13	0.5%
Feb-13	1.2%
Mar-13	1.0%
Apr-13	0.4%
May-13	0.7%
Jun-13	1.2%
Jul-13	1.3%
Aug-13	1.1%
Sep-13	1.1%
Oct-13	0.7%
Nov-13	0.9%
Dec-13	1.2%
Jan-14	1.5%
Feb-14	1.1%
Mar-14	1.5%
Apr-14	2.0%
May-14	2.3%
Jun-14	2.4%
Jul-14	2.1%
Aug-14	2.1%
Sep-14	2.0%
Oct-14	2.4%
Nov-14	2.0%
Dec-14	1.5%
Jan-15	1.0%
Feb-15	1.0%
Mar-15	1.2%
Apr-15	0.8%
May-15	0.9%
Jun-15	1.0%
Jul-15	1.3%
Aug-15	1.3%
Sep-15	1.0%
Oct-15	1.0%
Nov-15	1.4%
Dec-15	1.6%
Jan-16	2.0%
Feb-16	1.4%
Mar-16	1.3%
Apr-16	1.7%
May-16	1.5%
Jun-16	1.5%
Jul-16	1.3%
Aug-16	1.1%
Sep-16	1.3%
Oct-16	1.5%
Nov-16	1.2%
Dec-16	1.5%
Jan-17	2.1%
Feb-17	2.0%
Mar-17	1.6%
Apr-17	1.6%
May-17	1.3%
Jun-17	1.0%
Jul-17	1.2%
Aug-17	1.4%
Sep-17	1.6%
Oct-17	1.4%
Nov-17	2.1%
Dec-17	1.9%
Jan-18	1.7%
Feb-18	2.2%
Mar-18	2.3%
Apr-18	2.2%
May-18	2.2%
Jun-18	2.5%
Jul-18	3.0%
Aug-18	2.8%
Sep-18	2.2%
Oct-18	2.4%
Nov-18	1.7%
Dec-18	2.0%
Jan-19	1.4%
Feb-19	1.5%
Mar-19	1.9%
Apr-19	2.0%
May-19	2.4%
Jun-19	2.0%
Jul-19	2.0%
Aug-19	1.9%
Sep-19	1.9%
Oct-19	1.9%
Nov-19	2.2%
Dec-19	2.2%
Jan-20	2.4%
Feb-20	2.2%
Mar-20	0.9%
Apr-20	-0.2%
May-20	-0.4%
Jun-20	0.7%
Jul-20	0.1%
Aug-20	0.1%
Sep-20	0.5%
Oct-20	0.7%
Nov-20	1.0%
Dec-20	0.7%
Jan-21	1.0%
Feb-21	1.1%
Mar-21	2.2%
Apr-21	3.4%
May-21	3.6%
Jun-21	3.1%
Jul-21	3.7%
Aug-21	4.1%
Sep-21	4.4%
Oct-21	4.7%
Nov-21	4.7%
Dec-21	4.8%
Jan-22	5.1%
Feb-22	5.7%
Mar-22	6.7%
Apr-22	6.8%
May-22	7.7%
Jun-22	8.1%
Jul-22	7.6%
Aug-22	7.0%
Sep-22	6.9%
Oct-22	6.9%
Nov-22	6.8%
Dec-22	6.3%
Jan-23	5.9%
Feb-23	5.2%
Mar-23	4.3%

• Note: The shaded band indicates Bank of Canada’s 1-3% control range for the inflation target with inflation measured as the 12‑month rate of change in the consumer price index (CPI), Bank of Canada, Monetary Policy Report, July 2023.
• Source: Statistics Canada, Table 18‑10‑0004‑01.

Labour force and participation rate

For the first time in Canada's history, the population increased by more than 1 million individuals in 2022, international migration accounting for almost 96% if this growth.^{Footnote 15} The size of Canada's labour force^{Footnote 16} increased by 1.5% (+315,917, from 20.6 million to 20.9 million) from 2021‑22 to 2022‑23. During the 12‑month period of 2022‑23, the growth in the size of the population aged 15 years old and over (+1.6%) slightly outpaced that of the labour force (+1.5%), leaving the participation rate unchanged at 65.5% in 2022‑23.

However, behind this unchanged national participation rate, there were changes in the participation rates of individuals by age, in particular an increase in the participation rate of individuals who are less than 55 years old and a decrease for those who are 55 years old and over. The population of individuals aged 15 to 24 years old increased by 0.9% while their labour force increased by 1.8%, leading to an increase in the participation rate (+0.6 p.p.). A similar trend was observed for individuals aged 25 to 54 years old where their population increased by 1.4% while their labour force increased by 2.1%, leading to an increase in the participation rate (+ 0.6 p.p.). Conversely, because of population aging, the population of individuals 55 years old and over increased the most (+1.7%), while their labour force decreased by 0.1%, leading to a reduction in their participation rate (‑0.7 p.p.).

Employment and employment rate

During the reporting period, total employment continued a gradual upward trend, increasing from 19.6 million in March 2022 to 20.1 million in March 2023 (+1.9%). The number of part‑time employees decreased by 35,600 (-1.0%) while full‑time employees increased by 472,100 (+2.9%) over the same period. Employment growth was slightly higher in the private sector (+2.3%) than in the public sector (+1.6%). Self‑employment increased by 0.7%, reaching almost 2.7 million in March 2023, which is close to the pre‑pandemic level of 2.8 million in February 2020. During 2022‑23, employment increased in large‑sized enterprises^{Footnote 17} (500 employees and over) but decreased for all other sizes of enterprises.^{Footnote 18} Large‑sized enterprises accounted for nearly half of all employed individuals (46.9% in the last quarter of 2022‑23).

Between 2021‑22 and 2022‑23, most industry sectors experienced employment growth, although many had still not returned to their pre-pandemic levels. The 3 broad sectors with the biggest employment increases during the reporting period were Accommodation and food services (+9.7%), Information, culture and recreation (+9.3%) and Utilities (+8.7%) while Transportation and warehousing (-1.1%) and Forestry, fishing, mining, quarrying, oil and gas (-0.4%) were the only 2 sectors that registered a decrease in employment (consult Chart 4).

Text description for chart 4

Industry	Change (%) in employment by industry 2021‑22 to 2022‑23
Transportation and warehousing	-1.1%
Forestry, fishing, mining, quarrying, oil and gas	-0.4%
Educational services	0.7%
Wholesale and retail trade	1.1%
Other services (except public administration)	1.5%
Manufacturing	1.6%
Business, building and other support services	2.1%
Agriculture	2.5%
Health care and social assistance	2.5%
Finance, insurance, real estate, rental and leasing	3.0%
Total employed, all industries	3.4%
Public administration	5.3%
Construction	7.0%
Professional, scientific and technical services	7.0%
Utilities	8.7%
Information, culture and recreation	9.3%
Accommodation and food services	9.7%

• Source: Statistics Canada, Labour Force Survey, Table 14‑10‑0355‑01.

In terms of employment breakdowns by age, individuals aged 15 to 24 had the biggest increase in employment (+4.2%) in 2022‑23 compared to 2021‑22, followed by 25 to 54 years old (+3.5%) and 55 years and over (+2.7%). Even though the 55 years and over age group was the only group with a decrease in its labour force, their employment numbers increased nonetheless.

Over the 2022‑23 period, males represented on average 56.0% of full‑time employees while females represented 44.0%. Conversely, female represented 64.2% of part‑time employees on average while men represented 35.8%. These shares were similar for 2021‑22 where males represented 56.1% of full-time employees and 37.0% of part‑time employees, while females represented 43.9% of full‑time employees and 63.0% of part-time employees on average. Full‑time employment increased by 3.5% for males between 2021‑22 and 2022‑23, and by 4.1% for females. Part‑time employment decreased by 1.8% for males while it increased by 3.1% for females.

The increase in the total number of employed individuals does not take into consideration how it compares to the growth in working‑age population. The employment rate, which is the proportion of people aged 15 years and over who were employed, accounts for changes in the working‑age population.

The employment rate increased by 1.1 p.p. and reached 62.2% in 2022‑23 compared to 2021‑22, still below its highest level of 63.2% recorded in 2007‑08. Both men and women had higher employment rates in 2022‑23 compared to the previous fiscal year (+0.9 p.p. and +1.3 p.p. respectively). By age group, the youth aged 15 to 24 years registered the highest increase (+1.9 p.p.) and reached 59.0%. This was closely followed by those aged 25 to 54 years, who registered an increase of 1.6 p.p. settling at 84.9%. Lastly, those aged 55 years and over had the smallest increase (+0.3 p.p.). They also had the lowest employment rate across all age groups (35.1% for 2022‑23). Compared to other G7 countries, Canada ranked first in terms of employment rate throughout 2022‑23.^{Footnote 19}

Unemployment and unemployment rate

Unemployment rate is one of the core elements that determines eligibility for EI regular benefits. Under the original EI rules^{Footnote 20}, a lower unemployment rate in an EI economic region translates into a higher required number of hours of insurable employment within the qualifying period to be eligible for EI regular benefits. The unemployment rate in an EI economic region also plays a role in determining the EI regular benefit entitlement available to a claimant and the number of weeks of insurable earnings (known as the divisor) used in the calculation of their weekly benefit rate. Regional variations of the unemployment rate are discussed in subsection 1.3.

The number of unemployed individuals decreased from 1.4 million in 2021‑22 to 1.1 million in 2022‑23, a reduction of 24.2%. Combined with the increase in the size of the labour force during the same period, the unemployment rate fell from 6.8% in 2021‑22 to 5.1% in 2022‑23. In 2022‑23, women had a slightly lower unemployment rate than men (4.9% vs 5.2%). The decrease in unemployment rate was almost identical for men (-1.8 p.p.) and women (‑1.7 p.p.). In 2022‑23, the youth had the highest unemployment rate of 9.8%, compared to 4.2% for those aged 25 to 54 years old and 4.6% for those aged 55 years and over. By age group, individuals aged 55 year and over had the biggest reduction in their unemployment rate (-2.6 p.p.) compared to 2021‑22. This was followed by those aged 15 to 24 years old (‑2.1 p.p.).

The monthly unemployment rate reached 5.4% in March 2022, which was considered a historical low at the time. During 2022‑23, it continued to trend down and ended at 5.1% in March 2023 (consult Chart 5).

Text description for chart 5

Month	Unemployment rate (%)
Apr-19	5.7%
May-19	5.4%
Jun-19	5.6%
Jul-19	5.8%
Aug-19	5.8%
Sep-19	5.6%
Oct-19	5.6%
Nov-19	5.9%
Dec-19	5.6%
Jan-20	5.5%
Feb-20	5.7%
Mar-20	8.4%
Apr-20	13.6%
May-20	14.1%
Jun-20	12.4%
Jul-20	11.0%
Aug-20	10.2%
Sep-20	9.2%
Oct-20	9.0%
Nov-20	8.7%
Dec-20	8.9%
Jan-21	9.2%
Feb-21	8.5%
Mar-21	7.7%
Apr-21	8.2%
May-21	8.3%
Jun-21	7.9%
Jul-21	7.4%
Aug-21	7.1%
Sep-21	7.0%
Oct-21	6.5%
Nov-21	6.1%
Dec-21	5.9%
Jan-22	6.5%
Feb-22	5.5%
Mar-22	5.4%
Apr-22	5.3%
May-22	5.2%
Jun-22	5.0%
Jul-22	4.8%
Aug-22	5.2%
Sep-22	5.1%
Oct-22	5.1%
Nov-22	5.1%
Dec-22	5.0%
Jan-23	5.0%
Feb-23	5.1%
Mar-23	5.1%

• Source: Statistics Canada, Labour Force Survey, Table 14‑10‑0287‑01.

Duration of unemployment^{Footnote 21}

Along with the decrease in the national unemployment rate in 2022‑23, 2 indicators measuring unemployment duration also exhibited downward trends.

First, the average duration of unemployment spells (the number of continuous weeks of unemployment where an individual is looking for work or is on temporary layoff) decreased compared to the previous period. On an annual basis, it fell from an average of 22.3 weeks in 2021‑22 to 18.7 weeks in 2022‑23, representing a reduction of 3.6 weeks in the average duration of unemployment spells (consult Chart 6). This was almost back to the pre‑pandemic average of 16.1 weeks in 2019‑20. Most labour market indicators were already back to their pre‑pandemic levels at the beginning of 2022‑23, but the average duration of unemployment spells was one of the few that had not.

Second, the share of long‑term unemployment (continuously looking for work for 52 weeks or more^{Footnote 22}) continued its downward trend that started in 2021‑22. On an annual basis, the share of long‑term unemployment was 9.6% in 2022‑23, down by 6.4 p.p. from 15.9% in 2021‑22. This was closer to the pre‑pandemic share of 7.5% in 2019‑20. In absolute terms, this represented a decrease from 129,000 long‑term unemployed in March 2022 to 96,900 in March 2023. Among G7 countries, Canada reported in 2022 the lowest proportion of unemployment lasting for one year or over.^{Footnote 23}

Text description for chart 6

Month	Average weeks of unemployment spells (left scale)	Share of long-term unemployment (%) (right scale)
Apr-19	16.8	8.1%
May-19	16.3	8.0%
Jun-19	16.2	7.1%
Jul-19	16.8	8.1%
Aug-19	15.8	7.4%
Sep-19	15.5	6.7%
Oct-19	17.0	7.7%
Nov-19	16.1	7.3%
Dec-19	16.4	7.8%
Jan-20	17.4	8.6%
Feb-20	16.7	8.4%
Mar-20	11.7	5.4%
Apr-20	8.7	2.8%
May-20	11.1	3.0%
Jun-20	13.0	3.7%
Jul-20	16.1	4.4%
Aug-20	17.0	4.8%
Sep-20	20.1	5.5%
Oct-20	18.8	6.2%
Nov-20	18.6	5.9%
Dec-20	20.5	7.3%
Jan-21	21.0	8.7%
Feb-21	21.5	10.0%
Mar-21	22.6	16.1%
Apr-21	21.8	18.7%
May-21	21.9	17.9%
Jun-21	24.1	18.5%
Jul-21	24.0	18.1%
Aug-21	23.4	16.9%
Sep-21	23.7	16.7%
Oct-21	25.0	17.3%
Nov-21	22.0	13.8%
Dec-21	21.3	13.2%
Jan-22	20.6	12.6%
Feb-22	19.7	11.7%
Mar-22	19.8	11.6%
Apr-22	21.1	12.8%
May-22	20.0	10.4%
Jun-22	19.0	10.8%
Jul-22	19.6	9.4%
Aug-22	19.2	9.0%
Sep-22	17.8	8.8%
Oct-22	17.2	8.8%
Nov-22	18.2	8.8%
Dec-22	18.4	8.0%
Jan-23	17.6	10.0%
Feb-23	18.1	8.7%
Mar-23	17.6	9.0%

• Source: Statistics Canada, Labour Force Survey, Table 14‑10‑0342‑01.

Individuals aged 55 years and over are generally more likely to have longer durations of unemployment. Over 2022‑23, the average duration of unemployment was higher among those aged 55 and over (27.9 weeks) as opposed to the core‑age population (19.7 weeks) and youth (10.0 weeks). The duration decreased by 1.5 weeks, 3.8 weeks and 2.9 weeks respectively for these 3 groups compared to 2021‑22. Similarly, over the same 12‑month period, the share of long-term unemployed was 15.2% among those aged 55 and over, compared to 10.6% among the core‑age and 3.5% among youth. This represented a decrease of 7.9 p.p., 6.2 p.p. and 3.8 p.p. respectively for these 3 groups compared to 2021‑22.

The share of long‑term unemployment was similar for men and women. It reached 10.3% for men compared to 8.7% for women in 2022‑23. Compared to 2021‑22, the share of long-term unemployment decreased by 6.4 p.p. for men and 6.3 p.p. for women. Between 2021‑22 and 2022‑23, unemployment duration decreased by 3.6 weeks for both men and women, with an annual average in 2022‑23 of 19.6 weeks and 17.6 weeks respectively.

Reason for unemployment^{Footnote 24}

In general, workers can become unemployed for a number of reasons, and the cause of unemployment is a key factor in determining if the individual is eligible for EI benefits. EI regular benefits are only available to individuals who have lost their job for reasons outside their control or who left their job with just cause.

In the Labour Force Survey, 5 categories of reasons for unemployment^{Footnote 25} are reported: job leavers, permanent layoff, temporary layoff, not worked last year and never worked. Among these, the permanent and temporary layoff are most relevant to the administration of the EI program. However, the pandemic led many individuals to lose their jobs and remain unemployed. This caused a higher proportion of unemployed individuals who did not work in the last year among the unemployed population. In the beginning of 2021‑22, there was a significant increase in the number of unemployed individuals who did not work in the last 52 weeks, which implied that these individuals lost their jobs in the beginning of the pandemic and had not yet resumed working since. Towards the end of 2021‑22, this share started to decrease, and it continued in 2022‑23. The share of unemployed individuals who did not work in the last year was down from 30.6% in April 2022 to 24.9% in March 2023.

For most of 2022‑23, unemployment because of permanent layoffs represented the largest share of all unemployment (35.0% on average for 2022‑23), which is in line with the reasons for unemployment provided before the pandemic. The share of unemployment because of temporary layoffs, which had increased in the last 2 fiscal years (2020‑21 and 2021‑22), also reverted to pre-pandemic levels (3.8% on average for 2022‑23). Lastly, the share of job leavers, which had decreased during the last 2 fiscal years, increased back to pre-pandemic levels (19.6% on average for 2022‑23).

Text description for chart 7

Month	Job leavers	Permanent layoff	Temporary layoff	Have not worked in last year
Mar-20	12%	31%	36%	14%
Apr-20	7%	28%	54%	7%
May-20	11%	32%	42%	9%
Jun-20	12%	39%	28%	12%
Jul-20	14%	42%	18%	15%
Aug-20	13%	48%	13%	14%
Sep-20	14%	45%	10%	19%
Oct-20	15%	45%	10%	20%
Nov-20	13%	48%	9%	20%
Dec-20	11%	47%	12%	20%
Jan-21	10%	43%	20%	18%
Feb-21	12%	43%	14%	21%
Mar-21	12%	45%	10%	23%
Apr-21	11%	31%	14%	34%
May-21	10%	28%	12%	38%
Jun-21	11%	28%	7%	41%
Jul-21	10%	33%	5%	37%
Aug-21	11%	37%	5%	37%
Sep-21	13%	31%	4%	41%
Oct-21	15%	29%	3%	42%
Nov-21	15%	33%	3%	39%
Dec-21	12%	35%	4%	38%
Jan-22	13%	36%	14%	28%
Feb-22	16%	36%	5%	31%
Mar-22	16%	37%	5%	31%
Apr-22	18%	36%	3%	31%
May-22	21%	30%	2%	32%
Jun-22	21%	31%	3%	31%
Jul-22	19%	32%	5%	26%
Aug-22	18%	41%	4%	24%
Sep-22	23%	32%	3%	28%
Oct-22	23%	31%	3%	30%
Nov-22	21%	33%	3%	30%
Dec-22	17%	38%	3%	29%
Jan-23	18%	38%	5%	27%
Feb-23	19%	37%	5%	26%
Mar-23	17%	41%	6%	25%

• Source: Statistics Canada, Labour Force Survey, Table 14‑10‑0125‑01, seasonally unadjusted.

Hours of work^{Footnote 26}

Hours of work are closely related to the administration of the EI program. The number of hours of insurable employment is a key eligibility criterion of the EI program, as claimants must have worked a minimum number of insurable hours in the qualifying period to be eligible to receive EI benefits. The number of hours of insurable employment also determines, along with the regional unemployment rate, the maximum number of weeks of EI regular benefits that a claimant is entitled to receive.

The average number of hours usually worked from all jobs by Canadians was 36.6 per week in 2022‑23. This was similar to previous fiscal years, with just a small increase (+0.2 hours) compared to 2021‑22. In contrast, the average number of actual hours worked reflects temporary decreases or increase in work hours, for example, hours lost due to illness or vacation or more hours worked due to overtime. The average actual hours worked per worker from all jobs barely changed between 2021‑22 and 2022‑23, only a small decrease of 0.3% from 32.8 per week in 2021‑22 to 32.7 per week in 2022‑23.

Job vacancies^{Footnote 27} and labour market tightness

The number of job vacancies is the number of unoccupied positions for which employers are actively seeking workers, whereas the job vacancy rate is number of job vacancies expressed as a percentage of all occupied and vacant jobs.

The first 2 quarters of 2022‑23 reached unprecedentedly elevated levels of job vacancies and job vacancy rates, higher than the record high in 2021‑22 (consult Chart 8), representing an increase in tightness of the labour market. The first quarter of 2022‑23 hit a historical high of the job vacancy rate at 5.9%. Levels of job vacancies and vacancy rates persistently decreased afterwards. Compared to the last quarter of 2021‑22, the last quarter of 2022‑23 had a decrease of 12.3% in job vacancies and a reduction of 0.8 percentage points in the job vacancy rate.

Text description for chart 8

Quarter	Job vacancies (in thousands) (left scale)	Job vacancy rate (%) (right scale)
Q3 2020‑21	560.2	3.5%
Q4 2020‑21	553.5	3.6%
Q1 2021‑22	731.9	4.6%
Q2 2021‑22	912.6	5.4%
Q3 2021‑22	915.5	5.3%
Q4 2021‑22	890.4	5.2%
Q1 2022‑23	1,032.0	5.9%
Q2 2022‑23	991.7	5.6%
Q3 2022‑23	855.9	4.8%
Q4 2022‑23	781.2	4.4%

• ^* Statistics Canada temporarily suspended the data collection of the Job Vacancy and Wage Survey during the first and second quarters of 2020‑21.
• Source: Statistics Canada, Job Vacancy and Wage Survey, Table 14‑10‑0326‑01, seasonally unadjusted.

In the last quarter of fiscal year 2022‑23, a decrease in levels of job vacancies had been observed in most industrial groups, except for Utilities (+7.2%), Educational services (+2.5%) and Health care and social assistance (+6.1%) compared to the last quarter of the previous fiscal year (consult Table 1). Among sectors with lower levels of job vacancies, Information and cultural industries (-27.8%), Manufacturing (-26.8%), and Professional, scientific and technical services (-25.4%) had the highest decreases in the last quarter of 2022‑23 compared to the last quarter of 2021‑22.

The job vacancy rate also decreased for most industrial groups. The strongest decrease was registered in Accommodation and food services industry (-2.6 p.p.), which is in line with the sharp increase in employment observed in this industry. However, this industry still had the highest job vacancy rate of 7.3% in the last quarter of 2022‑23 among all industrial groups (consult Table 1). This is explained in part by a higher employee turnover in this industry which leads to more frequent job postings. Professional, scientific and technical services (‑1.8 p.p.) and Manufacturing (-1.4 p.p.) were the other 2 industries with the strongest decrease in job vacancy rate in the last quarter of 2022‑23 relative to the same quarter in 2021‑22. Health care and social assistance (+0.2 p.p.) and Utilities (+0.1 p.p.) were the only 2 industrial groups who registered an increase of their job vacancy rate between the last quarter of 2022‑23 compared to the same quarter in 2021‑22.

• Source: Statistics Canada, Job Vacancy and Wage Survey, Table 14‑10‑0326‑01, seasonally unadjusted.

Job vacancies usually become more difficult to fill when the available labour force, primarily unemployed individuals, declines relative to the number of vacant positions. It is said that the labour market is "tightening" in this situation. On the other hand, job vacancies usually become easier to fill when the number of unemployed individuals increases relative to the number of vacant positions in which case, it is said that the tightness of the labour market is easing. An indicator of labour market tightness is the Unemployment‑to‑Vacancy (UV) ratio. It measures the potential number of available unemployed people for every vacant position. A lower UV ratio corresponds to a tighter labour market and as fewer unemployed persons are available to fill vacant positions, it could lead to longer vacancy durations. Conversely, a higher UV ratio corresponds to easing of tightness in the labour market. A comparison of the UV ratio at 2 points of time indicates how labour market conditions evolve over the period.

On an annual basis, there was a downward trend of the UV ratio from 1.7 in 2021‑22 to 1.2 in 2022‑23. Similar to the higher levels of job vacancies and job vacancy rate observed at the beginning of the fiscal year, the first 3 quarters of 2022‑23 had the lowest level of UV ratio, indicating tight labour market conditions during this period. However, the labour market tightness began to ease with a higher UV ratio of 1.4 during the last quarter of 2022‑23 (consult Chart 9).

Text description for chart 9

Quarter	Unemployment-to-vacancy ratio
Q1 2021‑22	2.3
Q2 2021‑22	1.7
Q3 2021‑22	1.3
Q4 2021‑22	1.4
Q1 2022‑23	1.0
Q2 2022‑23	1.1
Q3 2022‑23	1.1
Q4 2022‑23	1.4

• Sources: Statistics Canada, Job Vacancy and Wage Survey, Table 14‑10‑0326‑01, seasonally unadjusted (for job vacancies) and Labour Force Survey, Table 14‑10‑0022‑01 (for unemployment).

Wages^{Footnote 28}

Employment earnings are another important element for the administration of the EI program. They determine the EI premiums paid by employers and employees, as well as the level of benefits that claimants can receive. Employment earnings can be a combination of hourly wages and hours worked, a fixed amount paid for a specific time period (a week, for example) or in the form of commissions, tips or bonuses. Average hourly wages and average weekly earnings are therefore examined.

Wage growth dynamics are linked to a variety of factors, notably labour productivity, labour market tightness, inflation expectations, demographic shifts, structural changes and minimum wage increases. In 2022‑23, the average nominal hourly wage continued its upward trend observed in 2021‑22. It went from $30.72 in April 2021 to $33.12 in March 2023. This was to be expected given labour market tightness, as labour shortages pushed wages higher.^{Footnote 29} However, in the context of high inflation during that same period, the average real hourly wage slightly decreased in 2022‑23 compared to 2021‑22 (consult Chart 10).

Text description for chart 10

Month	Average nominal hourly wage rate ($)	Average real hourly wage rate ($)
Apr-21	30.72	21.90
May-21	30.52	21.65
Jun-21	30.29	21.42
Jul-21	30.33	21.31
Aug-21	30.43	21.34
Sep-21	30.87	21.60
Oct-21	30.87	21.45
Nov-21	30.93	21.45
Dec-21	31.18	21.65
Jan-22	31.59	21.74
Feb-22	31.47	21.44
Mar-22	31.44	21.11
Apr-22	31.72	21.17
May-22	31.64	20.83
Jun-22	31.8	20.80
Jul-22	31.65	20.67
Aug-22	31.91	20.91
Sep-22	32.38	21.20
Oct-22	32.52	21.14
Nov-22	32.71	21.24
Dec-22	32.67	21.34
Jan-23	33.01	21.45
Feb-23	33.16	21.46
Mar-23	33.12	21.33

• Sources: Statistics Canada, Consumer Price Index Measures, Table 18‑10‑0004‑01 (for CPI) and Labour Force Survey, Table 14‑10‑0063‑01 (for hourly wage).

Average nominal weekly earnings are influenced not only by the average nominal hourly wage, but also by the number of actual hours worked per week. As mentioned previously, average actual hours worked per week remained relatively stable over the reference period. As a result, average nominal weekly earnings followed the same patterns observed in the average nominal hourly wages. They trended up by 2.9% from $1,139 in 2021‑22 to $1,171 in 2022‑23, equivalent to a $32.91 increase weekly. In real terms, the average weekly earnings declined relative to the increase in the CPI.^{Footnote 30}

Labour force and participation rate

In 2022‑23, each province and territory experienced an increase in its respective labour force compared to 2021‑22. Excluding the territories, Alberta posted the highest growth in the size of its labour force (+2.5%), followed by Nova Scotia (+2.0%) and New Brunswick (+1.7%) over the 2 fiscal years (consult Table 2).

Participation rate at the national level, including the territories, remained stable in 2022‑23 compared to 2021‑22. Northwest Territories (+1.4 p.p.), Nunavut (+1.4 p.p.), Newfoundland and Labrador (+0.3 p.p.) and Quebec (+0.2 p.p.) were the only ones registering a higher increase in participation rate over the 2 fiscal years. The highest decrease in participation rate was registered in Prince Edward Island (-1.7 p.p.) (consult Table 2).

• ^* Figures for Canada’s labour force and participation rate exclude the territories. Percentage change is based on unrounded numbers.
• Sources: Statistics Canada; Labour Force Survey, Table 14‑10‑0287‑01 and 14‑10‑0292‑01, seasonally adjusted data.

Employment and employment rate

Each province and territory experienced growth in employment in 2022‑23 compared to 2021‑22. The greatest employment gains were recorded in Alberta (+4.8%), Prince Edward Island (+4.4%) and Newfoundland and Labrador (+4.4%) (consult Table 3). Over the same 2 fiscal years, the employment rate increased in each province and territory, except for Yukon where it remained barely unchanged. In 2022‑23, employment rates in Alberta, Saskatchewan, Manitoba, Yukon and Northwest Territories were higher than the national level (consult Table 3).

• ^* Figures for Canada’s employment and employment rate exclude the territories. Percentage change is based on unrounded numbers.
• Sources: Statistics Canada; Labour Force Survey, Table 14‑10‑0287‑01 and 14‑10‑0292‑01, seasonally adjusted data.

Unemployment and unemployment rate

All provinces and territories noticed a significant decrease in unemployment in 2022‑23 compared to the previous fiscal period, except for Nunavut where an increase of 11.5% in the number of unemployed was registered (consult Table 4). Prince Edward Island (-29.2%), Ontario (-26.3%), Yukon (-25.6%), Alberta (‑24.9%) and Saskatchewan (‑24.2%) registered the largest drops.

Between 2021‑22 and 2022‑23, all but one provinces and territories experienced a reduction in their unemployment rate resulting from lower unemployment and a growing labour force. Nunavut had an increase in unemployment rate of 0.8 p.p., caused by higher unemployment. In 2022‑23, Quebec (4.2%), Manitoba, Saskatchewan and British Columbia (4.5%), as well as Yukon (4.1%) reported lower unemployment rates than the national level (5.1%) in 2022‑23 (consult Table 4).

• ^* Figures for Canada’s unemployment and unemployment rate exclude the territories. Percentage change is based on unrounded numbers.
• Sources: Statistics Canada; Labour Force Survey, Table 14‑10‑0287‑01 and 14‑10‑0292‑01, seasonally adjusted data.

Duration of unemployment

In 2022‑23, only Prince Edward Island had an increase in its average duration of unemployment (+10.9%) compared to 2021‑22 for a third consecutive fiscal year (consult Table 5). All other provinces had a decrease in the average duration of unemployment. Alberta (-26.6%) and Ontario (-18.0%) were the only 2 provinces with a greater decrease in the average duration than the national average (-16.3%) between 2021‑22 and 2022‑23.

• ^* Excludes the territories. Percentage change is based on unrounded numbers.
• Sources: Statistics Canada; Labour Force Survey, Table 14‑10‑0342‑01.

Weekly hours and earnings

The average weekly hours actually worked in 2022‑23 decreased from the previous fiscal year in almost all provinces, except for Prince Edward Island (+0.2%) and Ontario (+0.2%). Manitoba (-2.4%), New Brunswick (-0.8%) and Alberta (-0.8%) registered the highest decrease between 2021‑22 and 2022‑23 (consult Table 6). However, Alberta still had the highest average weekly hours actually worked in 2022‑23, at 34.0 hours.

Average nominal weekly earnings increased in 2022‑23 in all provinces and territories compared to 2021‑22. However, the inflation also increased during the same period. Except for Nunavut, all provinces and territories had an increase in nominal weekly earnings lower than the increase in CPI, indicating a decrease in the average purchasing power of workers in 2022‑23. The change in average nominal weekly earnings was above the national average for most of the provinces, including all Atlantic provinces. Ontario and Alberta had an increase that was somewhat below the national average, and given their size, drove down the national average (consult Table 6).

• ^* Weekly hours worked reflect the number of hours actually worked in the reference week of the Labour Force Survey from all jobs, including overtime.
• ^** Earnings data are based on gross payroll before source deductions; this includes earnings for overtime.
• ^*** Excludes the territories. Percentage change is based on unrounded numbers.
• Sources: Statistics Canada, Labour Force Survey, Table 14‑10‑0042‑01, unadjusted for seasonally (for hours worked), Survey of Employment, Payrolls and Hours, Table 14‑10‑0203‑01, unadjusted for seasonality (for nominal weekly earnings) and Consumer Price Index Measures, Table 18‑10‑0004‑01, unadjusted for seasonality (for CPI).

Job vacancies and labour market tightness

When comparing the last quarter of 2022‑23 to the same quarter in 2021‑22, the number of vacancies decreased in all provinces except Saskatchewan (+14.6%), Manitoba (+2.3%), Nova Scotia (+2.1%) and all territories (consult Table 7). British Columbia (-17.2%), Ontario (-16.9%) and Quebec (-12.4%) registered the biggest decrease in the number of vacancies across all provinces. Apart from the territories, British Columbia and Quebec (5.8% and 5.6% respectively) were the only provinces with a job vacancy rate higher than the national average (5.2%) in 2022‑23.

The decrease in the number of vacancies in most provinces indicates a reduction of the labour market tightness. However, based on the annual UV ratio, the labour market still appeared tight in many provinces in 2022‑23. Nonetheless, the UV ratio was at a historical low in the beginning of 2022‑23 but increased in all provinces during the rest of the fiscal year, which denoted less tightness in the labour market (consult Chart 11).

• Sources: Statistics Canada, Job Vacancy and Wage Survey, Table 14‑10‑0326‑01, unadjusted for seasonality (for job vacancies) and Labour Force Survey, Table 14‑10‑0287‑01, unadjusted for seasonality (for unemployment).

Text description for chart 11

Region	Unemployment-to-vacancy ratio, first quarter of 2022-23	Unemployment-to-vacancy ratio , last quarter of 2022-23
Canada	1.0	1.4
Newfoundland and Labrador	3.1	5.4
Prince Edward Island	1.4	2.6
Nova Scotia	1.4	1.7
New Brunswick	1.5	2.3
Quebec	0.7	1.1
Ontario	1.1	1.6
Manitoba	1.0	1.2
Saskatchewan	1.1	1.3
Alberta	1.3	1.9
British Columbia	0.8	1.1

• Sources: Statistics Canada, Job Vacancy and Wage Survey, Table 14‑10‑0326‑01, seasonally unadjusted (for job vacancies) and Labour Force Survey, Table 14‑10‑0287‑01 (for unemployment).