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For the first time in decades, Manitoba’s unemployment rate has risen above the national average. With the provincial economy growing (briskly for Manitoba) around two per cent a year, we might have expected some declining unemployment rates and labour shortages. But it’s not enough with record immigration and a slowdown in Manitobans leaving for Alberta and B.C.
Manitoba has seen steady job growth in the last few years – 6,900 new jobs were created in 2018, with most (4,900) of the increase from public administration.
Like Canada overall, where the 163,000 new jobs created in 2018 was not enough to match a labour force rising by 427,000, Manitoba’s job creation failed to cover the 10,900 new entrants to the labour force.
So while Canada and Manitoba have experienced employment growth, unemployment has also risen because the labour force is growing faster than the overall economy.
From 2000 to 2015, Manitoba recorded the greatest out-migration of residents in its history. High-paid jobs in Alberta and Ontario and the lifestyle of British Columbia lured Manitobans. More than offsetting the population losses was an aggressive program that brought in people at rates above the national average. Those high levels continue. Immigration to Manitoba is now three to four times the level in the 1990s.
But while Manitoba’s population is growing faster, the provincial economy continues to grow at modest levels.
While young people are more likely to move, lately that loss has slowed. Federal policies obsessed with climate change are damaging Alberta’s energy economy. Canada’s oil exports remain damaged with Alberta’s inability to get oil to tidewater. The lack of pipelines has Alberta taking huge discounts on its oil.
Investment in the sector has plummeted and over 110,000 oil and gas workers have lost their jobs since 2015. Calgary’s downtown has a vacancy rate above 25 per cent. Federal policies suppressing Alberta’s oil industry are causing foreign investment into Canada to plunge – 2018 had the lowest industry infrastructure spending since the financial crisis of 2008-09.
With few high-paying jobs available in Alberta and sky-high B.C. and Toronto real estate prices, Manitobans are staying put.
Meanwhile, First Nations members are moving from reserves – where there are few jobs and poor education, health and housing – to Manitoba’s cities. This migration is also a factor in the increasing workforce, since labour statistics don’t include the reserves. Globally, people are leaving rural areas for cities. This movement won’t stop.
These trends – Manitobans staying put, increased migration of First Nation residents to cities, and high levels of skilled and semi-skilled immigration – are expected to continue.
We should see the growth in Manitoba’s labour force as an exciting new opportunity and challenge.
But in a province where the public sector is much bigger than the Canadian average, it’s vital that government strive to encourage investment in the private sector to create jobs and boost the economy.
The size of Manitoba’s public sector needs to shrink if the province is to eliminate its large-budget deficits. And there’s no magic formula to attract investment and job creation. Private sector investment is attracted to locations with lower taxation, balanced budgets and efficient public services. Manitoba performs poorly on all of these metrics.
Opportunities to grow and prosper can flow naturally from population increases. But provincial and municipal governments need to cut public sector costs, taxes and fees. And they need to become vastly better at providing needed and efficient services.
Randy Boldt is an immigration consultant and research associate for the Frontier Centre for Public Policy.
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