calgary and area labour market 2015 - quarterly …...2015>q3 this calgary and area labour market...

2015>Q3

This Calgary and Area Labour Market Report provides labour market and economic information for the Calgary Region, Alberta and Canada for the third quarter of 2015.

Applications Management Consulting Ltd.

Calgary and Area Labour Market - 2015

Q3 REPORT

Table of Contents.................................................................................................Summary 1

..............................................................................................Calgary Economy 1

...............................................................................................Alberta Economy 3

...........................................................................................Canadian Economy 5

.........................................................................................Global/U.S.Economy 6

......................................................................................Labour Force Statistics 7

.........................................................................................Industry Employment 9

.............................................................................................Employer Survey 10

........................................................................................The Economy 14................................................................................Calgary Region Economy 14

...........................................................................................................Economic Growth 14

...........................................................................................................................Inflation 15

...........................................................................................................................Housing 16

...........................................................................Non-Residential Building Construction 18

..............................................................................................Average Weekly Earnings 18

...................................................................................................Employment Insurance 20

..................................................................................................................Office Market 21

.......................................................................................................................Population 22

.............................................................................................Alberta Economy 24...........................................................................................................Economic Growth 24

........................................................................................................................Oil Prices 25

......................................................................................................Crude Oil Production 27

..........................................................................................................Active Drilling Rigs 28

..............................................................................................................Building Permits 29

.....................................................................................................................Retail Sales 30

.......................................................................................................................Population 30

.........................................................................................Canadian Economy 32

Calgary and Area Labour Market - 2015 Q3 Report

...........................................................................................................Economic Growth 32

.......................................................................................................Consumer Spending 33

..............................................................................................................................Trade 34

....................................................................................................................Fiscal Policy 36

...........................................................................................................................Housing 36

......................................................................................Global/U.S. Economy 38................................................................................................Global Economic Growth 38

.....................................................................................................Advanced Economies 39

.....................................................................................................Emerging Economies 40

....................................................................................................U.S. Economic Growth 42

......................................................................................................................Investment 43

.......................................................................................................Consumer Spending 44

..............................................................................................................Housing Market 44

................................................................................................................Labour Market 46

..........................................................................Labour Market Review 47......................................................Calgary Census Metropolitan Area (CMA) 47

....................................................................................................................Employment 47

...............................................................................................................Unemployment 48

.............................................................................................................Alberta 49....................................................................................................................Employment 49

...............................................................................................................Unemployment 53

............................................................................................................Canada 54....................................................................................................................Employment 54

...............................................................................................................Unemployment 58

................................................................................................................Job Vacancies 59

...................................................................................Employer Survey 61..................................................................................................................Survey Profile 61

............................................................................................................Business Activity 62

..........................Employment: Past Layoffs, Vacant Positions and Future Employment 64

..................................................................................................Recruitment Resources 68

......................................................................................................Recruiting Difficulties 70


.........................................................................................................Employee Turnover 74

........................................................................................................................Retention 77

..................Supplemental Questions - Focus on Employee Training and Development 80

.................................................................................Job Bank Analysis 87.................................................................................................City of Calgary 87

.................................................................Communities Surrounding Calgary 88

........................................................................................Banff/Canmore Area 88

.......................................................Appendix A: Survey Methodology 92..............................Appendix B: Employer Survey Occupation Results 93


CALGARY ECONOMYSUMMARYQ3-2015

1

Summary

The Calgary Economic Region (CER) economy is forecast to contract by 0.2 per cent this year, down from robust growth of over 5.0 per cent in 2014.Calgary Economy

ECONOMIC GROWTH

Energy firms have responded to lower oil prices this year by cutting capital spending and drastically reducing staffing levels. The Calgary Economic Region (CER) economy is forecast to contract by 0.2 per cent this year, down from robust growth of 5.1 per cent in 2014. Modest economic growth of 1.7 per cent is projected for the CER in 2016.

2014

2015F

2016F

-2% 0% 2% 4% 6%

1.7%

-0.2%

5.1%

Calgary Economic Region GDP Growth

INFLATION

Consumer prices in Calgary rose 1.6 per cent in the twelve months to August 2015, following a 1.3 per cent increase in July 2015. Alberta’s inflation rate was 1.7 per cent in August 2015, up from 1.3 per cent the previous month. At the national level, the annual increase in the Consumer Price Index (CPI) was 1.3 per cent in August 2015—unchanged from July. Inflation in Calgary is projected to average 1.2 per cent in 2015 and 2.3 per cent in 2016.

2014

2015F

2016F

0% 1% 3% 4%

2.3%

1.2%

3.0%

Calgary Annual Inflation Rates

HOUSING STARTS

Housing starts in the Calgary CMA totaled 3,203 units in the third quarter of 2015, down 29 per cent from 4,509 units in the third quarter of 2014. Single-family starts in Calgary dropped 46 per cent year-over-year to 949 units, while multi-family starts declined 18 per cent to 2,254 units. Total annual housing starts in the Calgary CMA are forecast to decline 31 per cent in 2015 to 11,900 units and decline 16 per cent to 10,000 units in 2016.

2014

2015F

2016F

-0 6,000 12,000 18,000

10,000

11,900

17,131

Calgary CMA Housing Starts


CALGARY ECONOMYSUMMARYQ3-2015

2

In September 2015, approximately 18,740 Calgarians were receiving regular Employment Insurance (EI) benefits, up 7.7 per cent from August 2015 and up 95 per cent compared to a year earlier.

WEEKLY EARNINGS

The average weekly earnings (AWE) of payroll employees in Calgary remained virtually unchanged in August 2015 at $1,125 compared to the previous two months. Year-over-year, AWE rose by $11 or 1.0 per cent. In Alberta, AWE dropped to $1,129 in August 2015 from $1,137 the previous month, the seventh consecutive monthly decline. And while AWE in the province were down by $30 or 2.6 per cent year-over-year, Albertans still earned $182 more per week in August 2015 than the average Canadian.

Calgary

Alberta

Canada

$0 $300 $600 $900$1,200

$947

$1,129

$1,125

Average Weekly Earnings August 2015

EMPL. INSURANCE

There were 57,980 Albertans receiving regular Employment Insurance (EI) benefits in September 2015, double the 29,150 people receiving benefits the previous year. Despite the jump in the number of regular EI recipients in September 2015, only 2.3 per cent of Alberta’s labour force were collecting benefits, below the national average of 2.8 per cent. Approximately 18,740 Calgarians were receiving regular EI benefits in September 2015, up 95 per cent compared to a year earlier.

Sept 2015

Aug 2015

Sept 2014

0 6,000 12,00018,000

9,600

17,400

18,740

Calgary EI Beneficiaries

OFFICE MARKET

Overall, Calgary’s downtown office vacancy rate increased to 13.9 per cent in the third quarter of 2015, from 6.9 per cent the previous year. Vacancy in the beltline rose over 6.0 percentage points year-over-year to 16.1 per cent in the third quarter of 2015. The vacancy rate in downtown Calgary is forecast to climb within the range of 17 to 19 per cent by year end 2018.

Q3 2015

Q2 2015

Q3 2014

0% 5% 10% 15%

6.9%

12.3%

13.9%

Calgary Downtown Office Vacancy Rates


ALBERTA ECONOMYSUMMARYQ3-2015

3

Lower oil prices continued to weigh on the Alberta economy in the third quarter of 2015, with energy companies continuing to cut capital spending and layoff workers.Alberta Economy

ECONOMIC GROWTH

The economic downturn is expected to be more protracted than previously forecast, and the Conference Board of Canada now projects real GDP in Alberta to contract by 1.0 per cent in 2015. A gradual improvement is forecast for the oil sector next year, and the Alberta economy is projected to grow by 1.7 per cent in 2016.

2014

2015F

2016F

-2% 0% 2% 4% 6%

1.7%

-1.0%

4.4%

Alberta GDP Growth

OIL PRICES

West Texas Intermediate (WTI) crude prices, the North American benchmark for high quality oil, deteriorated over the third quarter of 2015, averaging US$46.43 per barrel. This was down from an average of US$57.94 per barrel the previous quarter. Year-over-year, crude prices were down 52 per cent from an average of US$97.17 per barrel. For 2016, major Canadian banks and the U.S. Energy Information Administration (EIA) estimate the price of WTI will fall within the range of US$50-US$58 per barrel.

Q3 15

Q2 15

Q1 14

Q4 14

Q3 14

$0 $35 $70 $105

$97

$74

$49

$58

$46

WTI Prices, Quarterly Avg. (US$/bbl)

DRILLING RIGS

There was an average of 182 active drilling rigs in western Canada this quarter, down 52 per cent from the third quarter of 2014. The number of active drilling rigs in western Canada is forecast to decline to an average of 191 this year, from 370 in 2014, representing a 48 per cent decline. In 2016, the number of active rigs is projected to fall a further 17 per cent to 159. With the assumption that each active drilling rig represents 135 jobs it is projected that decreased drilling activity both this year and next could result in the loss of approximately 28,485 jobs compared to 2014.

Q3 2015

Q2 2015

Q1 2015

Q4 2014

Q3 2014

0 100 200 300 400

377

384

291

95

182

Active Rigs, Quarterly Avg.,W.Canada


ALBERTA ECONOMYSUMMARYQ3-2015

4

Energy companies in western Canada will continue to boost crude oil production over the next five years, although at a slower rate than was previously anticipated.

CRUDE PRODUCTION

Year-to date August 2015, crude oil production in Alberta increased 6.7 per cent compared to the first eight months of 2014. Production of crude bitumen (oilsands) was the main driver of growth, increasing 13.8 per cent year-over-year. Crude oil production in western Canada is forecast to increase from 3.68 million barrels per day (b/d) in 2015 to 3.83 million b/d in 2016. By 2020, total crude oil production in western Canada is projected to reach 4.38 million b/d.

2015F

2016F

2017F

2018F

2019F

2020F

0 1 2 3 4 5

4.38

4.30

4.21

3.99

3.83

3.68

W. CAN Crude Production Forecast (mill b/d)

RETAIL SALES

Retail sales in Alberta totaled $6.30 billion in September 2015, down 1.1 per cent compared to the previous month and 5.6 per cent year-over-year. This was the largest year-over-year decline since October 2009, when sales were down 7.9 per cent. Retail sales in Alberta are forecast to decline 2.7 per cent in 2015, following robust growth of 7.5 per cent the previous year. In 2016, retail sales are projected to reach $78.4 billion, up a modest 2.6 per cent.

2014

2015F

2016F

-8% -4% 0% 4% 8%

2.6%

-2.7%

7.5%

Alberta Retail Sales Growth

POPULATION

Alberta’s population grew by 20,756 in Q2 2015, to an estimated 4,196,500 as of July 1. This was the 18th consecutive quarter that the province recorded the highest quarterly population growth rate in the country (+0.50 per cent), ahead of Manitoba (+0.30 per cent). Ontario (+0.29 per cent) and Saskatchewan (+0.27 per cent). Alberta posted the highest annual population growth rate among provinces in Q2 2015 at 1.83 per cent.

NLPENSNBQCONMBSKABBC

-2% 0% 2% 4%0.96%

1.83%1.01%1.03%

0.84%0.59%

-0.09%0.07%0.19%

-0.25%

Annual Pop. Growth Rates Q2 2015


CANADIAN ECONOMYSUMMARYQ3-2015

5

The Canadian economy experienced a mild recession during the first half of 2015, but had bounced back by mid-year with solid gains in exports and consumer spending. Annual growth is expected to improve in 2016 and 2017, but will be dependent on the performance of the global economy and a gradual recovery in oil prices.Canadian Economy

ECONOMIC GROWTH

Plunging oil prices, large-scale investment cuts and dismal trade readings induced a mild recession in the Canadian economy during the first half of 2015, and will lead to weak average growth this year. Economic activity is expected to rebound in the second half of 2015 and over the next two years. However, this forecasted recovery is heavily dependent on growth in Canada’s export sector, which itself is reliant on a pickup in global demand and gradually improving oil prices.

Q1 2015

Q2 2015

Q3 2015F

Q4 2015F

-3%-1.5% 0% 1.5% 3%

2.3%

2.5%

-0.5%

-0.8%

Real GDP Growth

TRADE

Despite a strong depreciation of the Canadian dollar over the first half of 2015, export growth severely disappointed in a climate of weak global demand. Exports are projected to pick up substantially, with 7.0 per cent growth expected in the third quarter. Trade will be counted on to propel growth over the next two years, given a limited investment outlook and a slowing consumer sector. Once ratified, the signing of the Trans-Pacific Partnership agreement in early October should also boost Canadian trade growth.

Q1 2015

Q2 2015

Q3 2015F

Q4 2015F

-4% 0% 4% 8%

5.0%

7.0%

0.4%

-1.4%

Export Growth

FISCAL POLICY

After four years of minimal growth in government expenditure, the newly elected Liberal Party has pledged to introduce a number of new tax benefits, along with a $5 billion infrastructure spending plan. To fund these initiatives, deficits of about $10 billion per year are planned for the next two fiscal years, with a return to a balanced budget by 2019-20. Relative to the Conservative budget passed earlier this year, government spending should add an additional 0.1 and 0.3 percentage points to GDP growth in 2016 and 2017.

2014

2015F

2016F

2017F

-1% 0% 1% 2%

1.4%

1.0%

0.9%

-0.3%

Government Spending Growth


GLOBAL/U.S. ECONOMYSUMMARYQ3-2015

6

The global growth outlook is characterized by a continued slowdown in emerging economies, with China’s downturn putting downward pressure on trade and commodity prices. The U.S. economy is gradually powering up; and the Euro Area is slowly and divergently recovering.Global/U.S.Economy

GLOBAL GROWTH

Global economic activity has been steadily moderating since 2010, following the stimulus-induced rebound. The negative trade impact of slowing Chinese growth has, thus far, had a greater impact than the positive impact associated with the U.S. economic revival. While low oil prices and interest rates have encouraged activity, uncertainty and downside risk continue to dominate the global outlook. The recovery in advanced economies is expected to strengthen into 2016, offsetting a continued slowdown in emerging markets.

2014

2015F

2016F

0% 1% 2% 3% 4%

3.6%

3.1%

3.4%

Global Real GDP Growth

EURO AREA

The Euro Area economic recovery continued through the first half of 2015. However, member performances have been increasingly disparate. France and Italy, the second and third largest economies in the region respectively, have consistently disappointed. Conversely, Spain and Portugal, two economies that had struggled for years to sustain a recovery, have regularly outpaced the Euro Area growth average over the past two years. The Euro Area recovery is expected to pick up into 2016, though the emerging market slowdown may dampen the near-term trade outlook.

2014

2015F

2016F

0% 1% 2%

1.6%

1.5%

0.9%

Euro Area Real GDP Growth

U.S.

The U.S. economy roared back to life in the second quarter of 2015, posting impressive growth driven by consumer spending, residential construction, and pent-up demand for exports created by the port strike in the first quarter. While the overall growth outlook remains relatively moderate in the 2.0 to 3.0 per cent range, this is in stark contrast to a very uncertain international economic climate. Dependent primarily on near-term employment growth, the Federal Reserve is expected to raise interest rates in late 2015 or early 2016.

2014

2015F

2016F

0% 1% 2% 3%

2.8%

2.6%

2.4%

U.S. Real GDP Growth


LABOUR FORCE STATISTICSSUMMARYQ3-2015

7

Calgary had higher participation and employment rates than Alberta and Canada. Alberta had the fourth lowest unemployment rate in Canada in the third quarter of 2015.

CALGARY

Calgary’s unemployment rate averaged 6.7 per cent in the third quarter of 2015, up from 5.6 per cent the previous quarter and 5.1 per cent year-over-year.

Calgary’s unemployment rate is forecast to average around 6.0 per cent over the next two years.

Calgary’s labour force participation rate averaged 74.1 per cent in the third quarter of 2015, down from 74.5 per cent the previous quarter but up from 73.3 per cent year-over-year.

ALBERTA

Alberta’s unemployment rate averaged 6.2 per cent in the third quarter of 2015, up from 5.6 per cent the previous quarter and 4.8 per cent year-over-year.

On average, there were 151,700 unemployed people in Alberta in the third quarter of 2015, up 13,500 from 138,200 unemployed in the previous quarter.

The number of long-term unemployed in Alberta (unemployed 27+ weeks) almost doubled to 22,500 in September 2015, from 11,700 in September 2014, and accounted for 15 per cent of the total unemployed in the province.

CANADA

Canada’s unemployment rate averaged 6.9 per cent in the third quarter of 2015, up from 6.8 per cent the previous quarter but down from 7.0 per cent year over year.

Saskatchewan had the lowest unemployment rate among provinces in the third quarter of 2015 at 5.0 per cent, followed by Manitoba (5.5 per cent), British Columbia (6.1 per cent) and Alberta (6.2 per cent).

Canada’s unemployment rate is forecast to average 6.9 per cent in 2016.

Labour Force Statistics


Labour Force Survey Stats Q3 Calgary Alberta Canada

✓ Participation Rate 74.1% 73.0% 65.8%

✓ Employment Rate 69.2% 68.5% 61.3%

✓ Unemployment Rate 6.7% 6.2% 6.9%

LABOUR FORCE STATISTICSSUMMARYQ3-2015

8

CALGARY

Part-time employment in Calgary declined by 2,600 or 2.0 per cent year-over-year in the third quarter of 2015, while full-time employment rose by 20,300 or 3.0 per cent.

Year-over-year, employment growth for women (+4.8 per cent) outpaced employment growth for men (+0.1 per cent) in the third quarter of 2015.

Table 282-0128 Labour force survey estimates

ALBERTA

The number of full-time workers in Alberta increased by 25,100 or 1.3 per cent year-over-year in the third quarter of 2015.

Employment for women increased by 27,200 or 2.7 per cent year-over-year in the third quarter of 2015, while employment for men increased by 3,800 or 0.3 per cent.

Employment for youth aged 15 - 24 fell by 2,200 or 0.7 per cent year-over-year in the third quarter of 2015.

CANADA

Part-time employment in Canada decreased by 86,300 or 2.5 per cent year-over-year in the third quarter of 2015.

Employment for men increased by 122,800 or 1.3 per cent year-over-year in the third quarter of 2015, while employment for women rose by 49,100 or 0.6 per cent.

Employment for Canadians aged 55+ years increased by 102,700 or 2.9 per cent year-over-year in the third quarter of 2015.


Canada

NL

PE

NS

NB

QC

ON

MB

SK

AB

BC

-5.0% -3.3% -1.7% 0% 1.7% 3.3% 5.0%

0.8%

-0.7%

-2.8%

-4.2%

-1.2%

-0.9%

-2.0%

3.2%

-0.6%

1.4%

-0.9%

Annual Employment Growth for Youth (aged 15 - 24), Canada and Provinces, Q3 2015

INDUSTRY EMPLOYMENT SUMMARY

Industry Employment

These are the industries that posted the greatest annual change in employment in Calgary, Alberta and Canada in Q3 2015.

Calgary Highlights

Health Care and Social Assistance

+23,100 jobs

Trade

+9,100 jobs

Construction

-16,800 jobs

Prof., Scientific and Technical Services

-13,100 jobs

Alberta Highlights


+22,700 jobs

Educational Services

+11,800 jobs

Forestry, Fishing, Mining, Oil and Gas

-24,700 jobs

Prof., Scientific and Technical Services

-13,700 jobs

Canada Highlights


+74,500 jobs

Transportation and Warehousing

+38,500 jobs

Other Services

-37,900 jobs

Public Administration

-14,600 jobs


Q3-2015

9

EMPLOYER SURVEYSUMMARYQ3-2015

10

Employer Survey

Survey Results: 200 small-sized employers with 10 - 49 employees were surveyed in Q3 2015.

PAST GROWTH

On balance, 10 per cent of employers reported that their company downsized in the 12 months prior to their survey, compared to 12 per cent expansion in Q3 2014.

Employers surveyed in Q3 2015 reported the lowest rate of company expansion since at least 2009.

In 2015, Calgary region employers reported overall company downsizing in Q3 for the first time since the 2009-10 economic downturn.

2015201420132012201120102009

-10% 0% 10% 20% 30%

Q3 Company Expansion

FUTURE GROWTH

On balance, only 4 per cent of employers anticipate a business expansion in the 12 months following their survey, down significantly from 24 per cent in Q3 2014.

Employers surveyed in Q3 2015 reported a substantially lower rate of anticipated company expansion than in previous years. The marked change could indicate that companies in the Calgary region continue to be less optimistic because of current economic conditions.

2015201420132012201120102009

0% 10% 20% 30%

Q3 Anticipated Company Expansion

LAYOFFS

Twenty-two per cent of employers reported that they laid off workers in the three months prior to their survey, double the number of employers in Q3 2014.

Employers surveyed in Q3 2015 reported a higher rate of layoffs than in all previous years.

Overall, employers reported about 121 people were laid off, representing a layoff rate of 2.5 per cent.

2015201420132012201120102009

0% 5% 10% 15% 20% 25%

Q3 Layoffs



11

The most frequently reported vacant positions were community and social service workers, truck drivers, food counter attendants and kitchen helpers, light duty cleaners and janitors, caretakers and building superintendents.

The positions employers reported the most difficulty recruiting were truck drivers, community and social service workers, food counter attendants and kitchen helpers, early childhood educators and assistants and technical wholesale specialists.

The positions employers reported had the highest voluntary turnover were truck drivers, community and social service workers, insurance agents and brokers, sales representatives (wholesale trade non-technical) and retail salespersons.

Sixty-two per cent of employers reported approximately 491 employees left as a result of voluntary turnover in the 12 months prior to their survey. Overall, the voluntary turnover rate was 10.2 per cent.

PAST RECRUITMENT

Employers were asked if they had difficulty recruiting qualified employees in the 12 months prior to their survey. Thirty-five per cent of employers reported difficulty recruiting, down from 48 per cent in Q3 2014.

201520142013201220112010

0% 25% 50%

Q3 Past Difficulty

FUTURE RECRUITMENT

Employers were asked if they anticipated having more, less or the same difficulty recruiting qualified employees in the 12 months following their survey. In Q3 2015, on balance, 17 per cent anticipated less difficulty recruiting, the lowest since at least 2010.

201520142013201220112010

-20% 5% 30%

Q3 Future Difficulty

PAST TURNOVER

Employers were asked if they had any voluntary turnover in the 12 months prior to their survey. Sixty-two per cent of employers reported voluntary turnover, up from 60 per cent in Q3 2014.

201520142013201220112010

0% 35% 70%

Q3 Past Turnover

FUTURE TURNOVER

Employers were asked if they anticipated voluntary turnover would be higher, lower or the same in the 12 months On balance, 14 per cent anticipated lower voluntary turnover in the next year.

201520142013201220112010

-20% -10% 0%

Q3 Future Turnover



12

✓ Employers reported word of mouth/employee referrals and career and classified websites were the most successful recruitment resources for attracting workers in the 12 months prior to their survey.

✓ Employers reported providing a competitive salary and positive work environment were the most successful employee retention strategies in the 12 months prior to their survey.

Word of mouth/employee referralsCareer and classified websites

Employment agenciesCompany website/internal postings

NewspapersWalk-ins/unsolicited resumes

Industry associationsSignage

Social mediaTechnical/trade institutes

Colleges/universitiesJob fairs

MagazinesRadio

NetworkingUnsure

None 1%1%1%1%1%1%

2%2%

3%3%3%

4%5%

8%9%

27%34%

Competitive salaryPositive work environment

Competitive benefits packageExcellent management/supervision

Flexible work measuresJob security

Company cultureInteresting/challenging work

PerksLearning/growth opportunities

Work/life balanceEmployee engagement

OtherWork location

Longevity of employeesCash bonuses

Excellent communicationReward and recognition programsOnboarding/recruitment process

UnsureNone 2%

13%1%1%1%1%

2%2%2%2%2%

3%5%5%

6%7%

8%8%8%

14%15%



13

“Employee training and development is a top priority for our company.”

Seventy-two per cent of employers strongly agreed or agreed that employee training and development is a top priority in their company. Only 7 per cent of employers disagreed or strongly disagreed.

All of the accommodation and food services/arts and entertainment and 90 per cent of the health care and social assistance employers agreed that employee training and development is a top priority in their company. Only 50 per cent of the wholesale and retail trade employers agreed.

Employers reported that the biggest challenge faced by their companies in terms of training employees was “Time constraints - too busy.”

Time constraints - too busyToo costly/not in budget

Turnover - employees leave once trainedEmployees aren’t interested in training

Managing employees' diverse learning needs - knowing what training is relevant and availableThe labour force is uneducated/unskilled

Employees don't need training - they are fully trainedThe locations where employees work are not near the training

Lack of internal trainers to administer the trainingFinding employees to train

English is a second language for many of our employees - language barrierThe length of training that is required

Administrative burdenManagement is not interested in training

UnsureNone 16%

10%1%1%

2%2%2%2%2%

4%4%

8%9%

11%11%

19%


2%6%

22%

29%

41%

Strongly AgreeAgreeNeutralDisagreeStrongly disagree

2%5%

21%

40%

32%

The Economy

Calgary Region EconomyThis section includes a discussion of: Economic Growth, Inflation, Housing, Non-Residential Building Construction, Average Weekly Earnings, Employment Insurance, Office Market and Population.

Economic GrowthThe Calgary Economic Region (CER) economy is forecast to contract by 0.2 per cent this year, down from robust growth of over 5.0 per cent in 2014. Modest economic growth of 1.7 per cent is projected for the CER in 2016. Energy firms have responded to lower oil prices this year by cutting capital spending and drastically reducing staffing levels. About three-quarters of the employment downsizing in Alberta in the first nine months of this year was related to the energy sector. As of the end of September 2015, the Alberta government had received 96 layoff notices affecting about 14,475 workers. Companies intending to layoff 50 or more employees are required to notify the province. For all of 2014, the Alberta government received 35 layoff notices affecting approximately 7,500 workers.1

“Recently, Tervita Corporation confirmed it cut 15 per cent of its corporate staff. Penn West Petroleum announced it was reducing its workforce by 35 per cent with a loss of more than 400 full-time employees and contractors. ConocoPhillips Canada also said it would drop 400 employees as well as 100 contractors.” 2

Several factors will contribute to lower levels of consumer spending and new home construction this year. The number of unemployed people in the Calgary CMA rose by 15,600 year-over-year this quarter and many more people are worried about losing their jobs. Wage growth has slowed, as many employers haven’t been able to increase wages or allow employees to work more overtime. Existing home sales were down 28 per cent year-over-year to the end of September and re-sale house prices are forecast to decline by an average of 2.1 per cent this year. In addition, increased vacancy rates in the non-

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0.0%&

1.5%&

3.0%&

4.5%&

6.0%&

7.5%&

9.0%&

2010&

2011&

2012&

2013&

2014&

2015f&

2016f&

2017f&

2018f&

2019f&

2020f&

%"cha

nge"

Calgary"Economic"Region,"GDP"and"Employment"Growth,"Actual"and"Forecast"(%"change)"

GDP& Employment&

Source: City of Calgary, Calgary & Region Economic Outlook 2015 - 2020, Fall 2015.


1 Calgary Herald, Group layoffs in Alberta have soared to more than 14,000 people as of the end of September with the oilpatch taking up a lion’s share of that growing total, Mario Toneguzzi, October 2, 2015.

2 Calgary Herald, More than 12,000 Albertans let go in group layoffs, Mario Toneguzzi, September 11, 2015.

THE ECONOMYThe Calgary region economy is affected by global and U.S. economic activity and by economic drivers in the Canadian economy and elsewhere in Alberta.

14

residential sector this quarter along with reduced employment levels are expected to weigh on non-residential construction activity. Employment in the CER is forecast to grow by just 1.3 per cent this year, following growth of 3.2 per cent in 2014.

“The negative effects of lower oil prices on job creation would extend into the last quarter of 2015 and early part of 2016; given the time delay between oil price reduction and employment impacts. Total employment would grow by 1.3 per cent in 2015, down from 3.2 per cent in 2014. The forecast is for employment to grow by 0.3 percent in 2016, and then by 2.1 per cent in 2017 as growth returns to normal rates.” 3

InflationCalgary’s inflation rate, as measured by the Consumer Price Index (CPI), was 1.6 per cent in the twelve months to August 2015, up from 1.3 per cent in July 2015. Year-over-year, prices rose in seven of the eight major CPI components in August, led by a 5.6 per cent jump in the cost of alcoholic beverages and tobacco and a 3.5 per cent increase in the price of food. Meat prices rose 7.3 per cent year-over-year, while prices for vegetables and fruits increased 5.5 per cent and 4.8 per cent respectively.

“Meat prices have been driven by the record-high price for cattle, while fruit and vegetable prices are a reflection of the weak Canadian dollar and the rising cost of imports.” 4

Calgarians also paid 2.5 per cent more for household operations, furnishing and equipment and recreation, education and reading in August.

Transportation costs in Calgary declined 0.3 per cent in August, due mainly to falling gasoline prices (-7.3 per cent). Annual declines in natural gas prices (-8.6 per cent) and electricity prices (-5.7 per cent), which are subcomponents of the shelter category, helped to keep shelter cost inflation at a low 0.7 per cent.5

!0.3%&0.7%&1.0%&1.6%&

2.5%&2.5%&

3.5%&5.6%&

1.6%&

!4.0%& !2.0%& 0.0%& 2.0%& 4.0%& 6.0%& 8.0%&

Transporta6on&Shelter&

Clothing&and&footwear&Health&and&personal&care&

Recrea6on,&educa6on&and&reading&Household&ops.,&furnishings&&&equip.&

Food&Alcoholic&beverages&and&tobacco&All!items&Consumer&Price&Index&

12#month)per)cent)change)

Consumer)Price)Index,)Calgary,)Jul.)and)Aug.)2015)12#Month)Change)in)the)Major)Components)

Jul!15& Aug!15&

Source: Statistics Canada, CANSIM table 326-0020.


3 City of Calgary, Calgary and Region Economic Outlook, 2015 - 2020, Fall 2015, p.15.

4 ATB Financial, The Owl, Inflation pressures still below target, September 18, 2015.

5 Statistics Canada CANSIM table 326-0020 and City of Calgary, August 2015 Inflation Review, September 22, 2015.

15 THE ECONOMY

Alberta’s inflation rate was 1.7 per cent in August 2015, up from 1.3 per cent the previous month. At the national level, the annual increase in the CPI was 1.3 per cent in August 2015—matching the increase in July 2015. Consumer prices rose in every province except Prince Edward Island (-0.1 per cent) in the twelve months to August 2015 and Alberta recorded the third highest inflation rate after Saskatchewan (+1.9 per cent) and Manitoba (+1.8 per cent).6 Calgary’s rate of inflation is forecast to average 1.2 per cent this year and 2.3 per cent in 2016.7

HousingHousing starts in the Calgary CMA totaled 3,203 units in the third quarter of 2015, down 29 per cent from 4,509 units in the third quarter of 2014. Single-family starts in Calgary fell 46 per cent year-over-year to 949 units, while multi-family starts declined 18 per cent to 2,254 units.8

“The impact of lower oil prices on Calgary’s labour market has weakened demand for new homes. Migration to the region has also slowed as rising unemployment rates and more favourable economic conditions in other areas of the country attract fewer people to Calgary.” 9

Strength in the multi-family sector pushed total housing starts in the Edmonton CMA up nearly 11 per cent in the third quarter of 2015 to 4,158 units. Multi-family starts increased 52 per cent year-over-year to 2,683 units, while single-family starts fell 26 per cent to 949 units.

Housing Starts, Alberta, Calgary and Edmonton, Q3 2014 and Q3 2015

Area Q3 2014 Q3 2015 Q3 2014 Q3 2015 Q3 2014 Q3 2015

Alberta 5,048 3,272 5,263 5,456 10,311 8,728 -15.4%

Calgary CMA 1,749 949 2,760 2,254 4,509 3,203 -29.0%

Edmonton CMA 1,987 1,475 1,761 2,683 3,748 4,158 10.9%

Single Multiple Total % Change 2014-2015

Source: Canada Mortgage and Housing Corporation

!1.0%&

0.0%&

1.0%&

2.0%&

3.0%&

4.0%&

5.0%&

Aug!12&

Oct!12&

Dec!12

&

Feb!13&

Apr!13&

Jun!13&

Aug!13&

Oct!13&

Dec!13

&

Feb!14&

Apr!14&

Jun!14&

Aug!14&

Oct!14&

Dec!14

&

Feb!15&

Apr!15&

Jun!15&

Aug!15&

All#Items)Consumer)Price)Index)Year#Over#Year)Per)Cent)Change)

Canada& Alberta& Calgary&

Source: Statistics Canada, CANSIM table-326-0020.


6 Statistics Canada CANSIM table 326-0020.

7 Conference Board of Canada, Metropolitan Outlook 1, Autumn 2015.

8 Canada Mortgage and Housing Corporation, Housing Now Prairie Region, Fourth Quarter 2015, p.16.

9 Canada Mortgage and Housing Corporation, Housing Market Outlook Calgary CMA, Fall 2015, p.2.

16 THE ECONOMYTHE ECONOMY

Housing starts in Alberta are projected to decline both this year and next. After reaching 40,590 units in 2014, total starts are forecast to fall 8.4 per cent in 2015 to 37,200 units and a further 20 per cent in 2016 to 30,300 units. Total annual housing starts in the Calgary CMA are forecast to decline 31 per cent in 2015 to 11,900 units, while in Edmonton, starts are projected to climb 18 per cent to 16,400 units. In 2016, 10,000 housing starts are projected for Calgary and 11,100 starts for Edmonton, a 16 per cent year-over-year decline for Calgary and a 32 per cent drop for Edmonton.10

Turning to the re-sale market, residential sales in the Calgary CMA were down 27 per cent year-over-year in the third quarter of 2015, following a 26 per cent year-over-year decrease the previous quarter. Year-to-date September 2015, residential sales in the Calgary CMA totaled 19,458, down 28 per cent from 27,074 sales in the first nine months of 2014.11

“Rising unemployment and persistent weakness in the local economy is impacting housing demand [...] However, unlike earlier this year when consumers were reacting to uncertainty, recent activity reflects current economic conditions.” 12

The average price for an existing home in the Calgary CMA remained relatively stable in the third quarter of 2015, declining by 1.5 per cent year-over-year to $452,200. Year-to-date September 2015, the average price for an existing home was $455,556 down just 1.0 per cent compared to the first nine months of 2014.13 According to the Calgary Real Estate Board President Corrine Lyall, this is a moderate correction compared to the aggressive gains in 2014 that averaged more than 9.0 per cent.14

After reaching a record high of 33,615 in 2014, existing home sales in Calgary are expected to fall 28 per cent to 24,300 in 2015. In 2016, sales are expected to rebound slightly by 1.6 per cent and total 24,700. The average price for an existing home in Calgary is forecast to decline by 2.1 per cent in 2015 to $451,000. According to CMHC, “part of the decline in the average price will be due to less activity

!"!!!!

!2,500!!

!5,000!!

!7,500!!

!10,000!!

!12,500!!

!15,000!!

!17,500!!

2011! 2012! 2013! 2014! 2015f! 2016f! 2017f!

Housing(Units(

Annual(Housing(Starts,(Actual(and(Forecast(Calgary(CMA(

Single"detached! Mul:"family!

Source: Canada Mortgage and Housing Corporation


10 Canada Mortgage and Housing Corporation, Housing Market Outlook Prairie Region Highlights, Fourth Quarter 2015.

11 Canada Mortgage and Housing Corporation, Housing Now Calgary CMA, October 2015, p.26.

12 Calgary Real Estate Board, Calgary Regional Housing Market Statistics, October 2015, p.1.

13 Canada Mortgage and Housing Corporation, Housing Now Calgary CMA, October 2015, p.26.

14 Calgary Real Estate Board, Calgary Regional Housing Market Statistics, October 2015, p.1.

17 THE ECONOMYTHE ECONOMY

in the move-up and luxury home segments of the market.”15 In 2016, the average price is projected to increase 0.7 per cent to $454,000 as market conditions firm.

Non-Residential Building ConstructionInvestment in non-residential building construction in the Calgary CMA, which includes commercial building, industrial developments and institutional and government construction, totaled $1.15 billion in the third quarter of 2015, up 11 per cent from the third quarter of 2014.

About three-quarters of the non-residential spending in Calgary in the third quarter of 2015 was on commercial projects, which was virtually unchanged year-over-year at $863.4 million. Investment in institutional and governmental projects jumped 78 per cent to $251.1 million, the highest level since the second quarter of 2011, while investment in industrial structures increased 6.7 per cent to $32.2 million.

In Alberta, developers spent $2.77 billion on non-residential construction projects this quarter, a 3.7 per cent increase compared to the third quarter of 2014. A 51 per cent increase in spending on institutional and governmental structures was partially offset by a 12 per cent drop in spending on industrial projects and a 3.8 per cent decline in investment in commercial buildings.

“Even though Alberta saw growth in non-residential construction investment in the third quarter, the majority of the emphasis is on the industrial and government sector. Given the slowdown, this isn’t surprising. But moving ahead, positive investment in any type of building construction is great news for the construction sector in our province, especially in a downturn.” 16

Average Weekly EarningsThe average weekly earnings (AWE) of payroll employees in Calgary remained virtually unchanged in August 2015 at $1,125 compared to the previous two months. Year-over-year, average weekly earnings rose by $11 or 1.0 per cent in August 2015.17

0"200"400"600"800"1000"1200"1400"

Q1"20

07"

Q3"20

07"

Q1"20

08"

Q3"20

08"

Q1"20

09"

Q3"20

09"

Q1"20

10"

Q3"20

10"

Q1"20

11"

Q3"20

11"

Q1"20

12"

Q3"20

12"

Q1"20

13"

Q3"20

13"

Q1"20

14"

Q3"20

14"

Q1"20

15"

Q3"20

15"

$"millions"

Investment"in"Non.Residen1al"Building"Construc1on,"Calgary"CMA"

Commercial" Ins9tu9onal"and"governmental" Industrial"



15 Canada Mortgage and Housing Corporation, Housing Market Outlook Calgary CMA, Fall 2015,p.4.

16 ATB Financial, The Owl, Non-residential investment numbers: Good news for construction sector, Nick Fork, October 15, 2015.

17 CMHC, Housing Now - Calgary CMA, October 2015, p.27.

18 THE ECONOMY

“Amongst all the economic uncertainty, it’s natural that many employers haven’t been able to increase wages or allow employees to work more overtime. As businesses look to turn over a new leaf in 2016, some may continue to pull back both wages and employees’ overtime hours.” 18

In Alberta, average weekly earnings dropped to $1,129 in August 2015 from $1,137 the previous month, the seventh consecutive monthly decline. And while weekly earnings in the province were down by $30 or 2.6 per cent year-over-year, Albertans still earned $182 more per week in August 2015 than the average Canadian ($947).

“Despite the drop in pay, employees in Alberta continue to be the highest-paid in the country. Average weekly earnings here in Alberta remain 14 per cent higher than second-place Newfoundland and Labrador ($993.18) and 16 per cent higher than third-place Saskatchewan ($972.98).” 19

Within Alberta, average weekly earnings varied significantly by industry. In August 2015, the highest weekly wages were in the management of companies and enterprises industry, which rose 4.4 per cent year-over-year to $2,094. Weekly earnings in mining and oil and gas were the second highest at $2,067, but declined 8.5 per cent year-over-year from $2,260 in August 2014. Within the trade industry, wholesale trade weekly earnings rose 9.0 per cent year-over-year to $1,375 in August 2015, while retail trade earnings declined 2.9 per cent to just $605 per week. The lowest average weekly earnings were recorded in the accommodation and food services industry, which dropped 6.9 per cent year-over-year to just over $400. On average, weekly wages for Albertans employed in the health care and social assistance industry increased 6.1 per cent to $944.

!$1,159!!!$1,129!!

!$1,114!! !$1,125!!

!$940!! !$947!!

!$900!!

!$950!!

!$1,000!!

!$1,050!!

!$1,100!!

!$1,150!!

!$1,200!!

Aug.14!

Sep.14!

Oct.14!

Nov.14!

Dec.14

!

Jan.15!

Feb.15!

Mar.15!

Apr.15!

May.15!

Jun.15!

Jul.1

5!

Aug.15!

Source:!CMHC!and!StaFsFcs!Canada!

Average'Weekly'Earnings'

Alberta! Calgary! Canada!

Industry Aug-14 Aug-15 % changeManagement of companies & enterprises 2,006$ 2,094$ 4.4%Mining and oil and gas extraction 2,260$ 2,067$ -8.5%Utilities 2,022$ 1,903$ -5.9%Professional, scientific & technical services 1,546$ 1,517$ -1.9%Construction 1,523$ 1,454$ -4.5%Wholesale Trade 1,262$ 1,375$ 9.0%Public administration 1,316$ 1,343$ 2.1%Finance and insurance 1,307$ 1,293$ -1.1%Manufacturing 1,248$ 1,269$ 1.7%Transportation and warehousing 1,246$ 1,264$ 1.4%Information and cultural industries 1,182$ 1,246$ 5.4%Educational services 1,096$ 1,117$ 1.9%Real estate and rental and leasing 1,169$ 1,046$ -10.5%Health care and social assistance 890$ 944$ 6.1%Administrative and support services 921$ 938$ 1.8%Other services 926$ 906$ -2.2%Retail Trade 623$ 605$ -2.9%Arts, entertainment and recreation 585$ 567$ -3.1%Accommodation and food services 434$ 404$ -6.9%

Average'Weekly'Earnings'in'Alberta'by'Industry'(incl.'overtime)

Source:(Statisitcs(Canada,(CANSIM(Table(281;0063


18 ATB Financial, The Owl, Wages fall...again, Nick Ford, October 29, 2015.

19 Ibid.

19 THE ECONOMY

Employment InsuranceThere were 57,980 Albertans receiving regular Employment Insurance (EI) benefits in September 2015, a 9.7 per cent increase (4,860 people) compared to August 2015 and double the 29,150 people receiving benefits in September 2014.

“So far, the pattern of increasing employment insurance recipients looks remarkably similar to the downturn that hit Alberta six years ago. At that time, the number of people receiving benefits spiked suddenly and steadily after a long period of stability. Total recipients at that time rose from about 20,000 per month to over 70,000. If a similar pattern occurs this time around, we can expect the number of recipients to continue to rise in the coming months—perhaps rising back to 70,000 or even higher. Because Alberta has gained nearly 274,000 new workers into the labour force since the last downturn, there are proportionately more people who could lose their jobs and collect benefits.” 20

The most significant year-over-year growth in beneficiaries in Alberta occurred among those whose last occupation was in natural and applied sciences (+183 per cent or +1,680), processing, manufacturing and utilities (+174 per cent or +2,260 people) primary industry (+170 per cent or +2,350) and trades, transport and equipment operator occupations (+101 per cent or +12,210).

“The current trend is strikingly similar to that experienced in 2009, when the number of beneficiaries shot from about 20,000 to over 70,000 in less than a year. This time around, the number of beneficiaries is almost certain to rise as more layoffs are expected in the fall, particularly in the energy sector.” 21

Despite the jump in the number of regular EI recipients in September 2015, only 2.3 per cent of Alberta’s labour force were collecting benefits, well below the national average of 2.8 per cent. Ontario had the lowest rate in September (2.0 per cent), followed by Manitoba and British Columbia (2.2 per cent each), while almost 12 per cent of workers in Newfoundland and Labrador were collecting benefits.

0"10000"20000"30000"40000"50000"60000"70000"80000"

Jan.08"

May.08"

Sep.08"

Jan.09"

May.09"

Sep.09"

Jan.10"

May.10"

Sep.10"

Jan.11"

May.11"

Sep.11"

Jan.12"

May.12"

Sep.12"

Jan.13"

May.13"

Sep.13"

Jan.14"

May.14"

Sep.14"

Jan.15"

May.15"

Sep.15"

Regular(Employment(Insurance(Beneficiaries,(Alberta(

Calgary" Edmonton" Rest"of"AB"



20 ATB Financial, The Owl, E.I. recipients inch higher in July, Todd Hirsch, September 17, 2015.

21 ATB Financial, The Owl, Employment Insurance beneficiaries jump again in June, Todd Hirsch, August 20, 2015.

20 THE ECONOMY

Approximately 18,740 Calgarians were receiving regular EI benefits in September 2015, up 7.7 per cent from August 2015 and up 95 per cent compared to a year earlier. The number of EI beneficiaries also increased 86 per cent year-over-year in Edmonton to 18,530 in September. This was the first time since July 2013 that the number of EI beneficiaries in Calgary surpassed Edmonton. In the rest of Alberta, the number of beneficiaries was up 116 per cent year-over-year to 20,710.

Office MarketOverall, Calgary’s downtown office vacancy rate increased to 13.9 per cent in the third quarter of 2015, from 6.9 per cent the previous year. The vacancy rate in Calgary’s Class AA downtown office market nearly tripled to 6.1 per cent, from 2.1 per cent in the third quarter of 2014. Vacancy in the beltline rose over 6.0 percentage points year-over-year to 16.1 per cent in the third quarter of 2015. According to Cresa, this is the highest rate of office vacancy Calgary has experienced since 2002, when oil prices were below US$20 per barrel.” 22

“The total downtown market has approximately 5.7 million square feet of office space available. Even in Calgary’s best years anything north of 1.5 million square feet of absorption is extraordinary (by comparison, 2010 through 2012 had an average of just over two million square feet each year). Using a more conservative absorption figure of 600,000 square feet per annum, which is the historic average over the past 15 years, we currently have a 9.5 year supply of space in the market. With an additional three million square feet of new developments to be delivered by 2018, one can understand why sublandlords and landlords with vacancy are feeling rather exposed to the market during a prolonged period of low oil prices.” 23

6.9%%

2.1%%

6.5%%

14.0%%12.0%%

10.0%%13.9%%

6.1%%

16.6%%

21.6%%

15.9%% 16.1%%

0.0%%

5.0%%

10.0%%

15.0%%

20.0%%

25.0%%

Overall%Downtown%

AA%Downtow

n%

A%Downtown%

B%Downtown%

C%Downtown%

Beltline%

Vacancy&Ra

te&

Calgary&Downtown&and&Beltline&Office&Vacancy&Rates&

Q3%2014% Q3%2015%

Source: Cresa Point of View, Third Quarter 2014 and 2015 Downtown and Beltline Office Market Reports.


22 Cresa, Point of View, Third Quarter 2015, Downtown and Beltline Office Market Report, p.1.

23 Ibid.

21 THE ECONOMY

Looking ahead, with over three million square feet of office space to hit the market by 2018 [Oxford’s Eau Claire Tower (2017), Manulife’s 707 Fifth (2017), Brookfield Place - East (2018), and Telus Sky (2018)]. both Cresa and Colliers project the vacancy rate in downtown Calgary to climb within the range of 17 to 19 per cent by year end 2018.

“Last year, the energy industry accounted for approximately 72% of tenants occupying downtown office space and contributed 25% to Alberta’s GDP. Today, current market conditions are forcing these companies to focus on reduced costs and improved operational efficiencies. As profit margins tighten and market valuations decline, we will see increased consolidation of the sector. Combined with growing sublease space and impending new build space, oversupply in the market will be magnified. Nonenergy sectors, despite being affected by the pressure on oil and gas players, are making up a growing portion of Calgary’s downtown office space. Much of the non-energy industry has traditionally been located in the suburban or beltline office markets and as a result of the supply demand re-balancing, the downtown landscape may become home to a more diverse mix of tenants.” 24

PopulationCalgary’s population increased by 35,700 or 3.0 per cent from the previous year to 1.231 million in April 2015. Natural increase accounted for 30 per cent of the population increase in 2015 (10,800 people) while net migration accounted for the remaining 70 per cent (24,900 people).25

Calgary’s population is forecast to increase by 135,600 over the next five years, reaching a total of 1.367 million by April 2020. Over this period, net migration is expected to account for 58 per cent of the population growth (78,000) while natural increase is forecast to account for the remaining 42 per cent (57,600).26

“Net migration would fall from 24,909 persons in 2015 to 16,600 by 2020. Slower job growth leading to relatively higher unemployment rates in the local and provincial economies would reduce the attractiveness of Alberta and Calgary as destinations for potential job seekers.” 27

Source: Colliers International, Calgary Downtown Office Market, Q3 2015.


24 Colliers International, Research and Forecast Report, Calgary Downtown Office Market, Q3 2015, p.4.

25 City of Calgary, 2015 Civic Census Results.

26 City of Calgary Economics, Calgary & Region Economic Outlook 2015 - 2020, Fall 2015, p.11.

27 Ibid, p.10.

22 THE ECONOMY

As the population ages and net migration slows, the age distribution of Calgary’s population is projected to shift over the next five years. The 35 - 39 age group (+24,000) and 45 - 49 age group (+19,800) are expected to experience the largest increases, while the population of the 20 - 24 age group is forecast to decline by 4,200 over the five years to 2020. In addition, the population of the 25 - 29 age group will remain relatively unchanged (+200).

“These population shifts would have positive or negative effects on businesses and organizations supplying goods and services to various markets. For example, businesses and organizations that are heavily reliant on entry level workers (20-24) would encounter increasing difficulties in staffing vacant positions as the number of individuals in that cohort would decline over time. Also, post-secondary institutions may not be able to meet their enrolment targets because of the shrinking of the post secondary age cohort (20-24).” 28


28 Ibid.

23 THE ECONOMY

Alberta EconomyThis section on the Alberta Economy includes a discussion of: Economic Growth, Oil Prices, Crude Oil Production, Active Drilling Rigs, Building Permits, Retail Sales and Population.

Economic GrowthLower oil prices continued to weigh on the Alberta economy in the third quarter of 2015, with energy companies continuing to cut capital spending and layoff workers. The price of West Texas Intermediate (WTI) crude oil fell to an average of $US46 per barrel in the third quarter, from $US58 per barrel the previous quarter. The economic downturn is expected to be more protracted than previously forecast, and the Conference Board of Canada now projects real GDP in Alberta to contract by 1.0 per cent in 2015.29 This is down 0.3 percentage points from the Spring forecast.30

Output in Alberta’s goods-producing industries is forecast to contract 2.5 per cent this year, led by a decline of over 7.4 per cent in the construction industry. Output in the utilities industry is projected to decline by almost 4.0 per cent, while mining and oil and gas and agriculture output is expected to contract by about 1.5 per cent each. Output growth in Alberta’s manufacturing industry is expected to remain positive this year, but will ease from +3.4 per cent in 2014 to +1.6 per cent in 2015.

“The plunge in crude oil prices is hitting not only oilpatch investment but is also putting a severe damper on Alberta’s red-hot housing market. The oil patch acted as a magnet to pull in migrants from different parts of the country and from abroad, generating a lot of residential construction activities to accommodate the influx of immigrants. However, with oil firms slamming the brakes on investment and on hiring in response to lower crude oil prices, we project that net annual inflows of immigrants will drop to around 31,000 over the next two years (down from an average of 78,000 for the last three years). Slower immigrant inflows, combined with job losses from the oil rout, will stifle demand for new housing.” 31

!6%$

!4%$

!2%$

0%$

2%$

4%$

6%$

8%$

2000$

2001$

2002$

2003$

2004$

2005$

2006$

2007$

2008$

2009$

2010$

2011$

2012$

2013$

2014$

2015f$

2016f$

2017f$

2018f$

2019f$

%"cha

nge"

Alberta"Economic"Outlook,"Actual"and"Forecasted""%"Change"in"GDP"and"Employment"

GDP$!$Alberta$ Employment$!$Alberta$ GDP$!$Canada$

Source: Conference Board of Canada, E-Data System


29 Conference Board of Canada, Provincial Outlook, Economic Forecast, Summer 2015.

30 Conference Board of Canada, Provincial Outlook, Economic Forecast, Spring 2015.

31 Conference Board of Canada, Provincial Outlook, Summer 2015, p.50.

24 THE ECONOMY

Output in Alberta’s services-producing industries is projected to advance by a modest 0.4 per cent in 2015, led by 2.7 per cent growth in finance, insurance, real estate and leasing and 2.2 per cent growth in health care and social assistance. Output in the wholesale and retail trade and transportation and warehousing industries is forecast to decline by 2.8 per cent and 1.7 per cent respectively this year, while output will remain relatively unchanged (+0.1 per cent) in public administration.32

A gradual improvement is forecast for the oil sector next year, and the Alberta economy is projected to grow by 1.7 per cent in 2016. The goods-producing sector is forecast to expand by about 1.0 per cent, led by growth in utilities (+3.9 per cent), manufacturing (+2.5 per cent), mining and oil and gas (+2.4 per cent) and agriculture (+2.2 per cent). Output in the services-producing industries is projected to advance at a more solid 2.4 per cent in 2016, led by growth in health care and social assistance (+3.8 per cent), finance, insurance and real estate (+3.7 per cent), community, business and personal services (+2.7 per cent) and wholesale and retail trade (+2.1 per cent).

“Heavy investment in recent years has helped to build a lot of capacity in the oil and gas sector, and that is paying dividends in the form of higher oil production. Even though oil prices have dropped, non-conventional oil production continues to flow south to refineries along the U.S. Gulf Coast where demand for heavy oil remains high. And, with import levels falling (due in part to the drop in machinery and equipment purchases associated with oil-patch development), net trade will remain a positive influence on the economy over the short term. Together, a positive net trade balance and more stable economic conditions will help lift real GDP by 1.7 per cent next year.” 33

Oil PricesWest Texas Intermediate (WTI) crude prices, the North American benchmark for high quality oil, deteriorated over the third quarter of 2015, averaging US$46.43 per barrel. This was down from an average of US$57.94 per barrel the previous quarter. Year-over-year, crude prices were down 52 per cent from an average of US$97.17 per barrel.

!8%$ !6%$ !4%$ !2%$ 0%$ 2%$ 4%$

Construc1on$U1li1es$

Wholesale$&$retail$trade$Transporta1on$&$warehousing$

Agriculture$Public$administra1on$

Community,$bus.$&$personal$services$Mining$

Manufacturing$Health$&$social$assistance$

Finance,$insurance$&$real$estate$All$industries$

%"change"

Contribu0ons"to"Alberta"Real"GDP"Growth"2015"and"2016"Forecast"

2015f$ 2016f$

Source: Conference Board of Canada, Provincial Outlook, Summer 2015


32 Conference Board of Canada, Provincial Outlook, Summer 2015.

33 Ibid, p.50.

25 THE ECONOMY

Western Canada Select (WCS), the Canadian heavy oil benchmark, averaged US$33.16 per barrel in the third quarter of 2015, down from US$46.35 per barrel in the second quarter of 2015 and US$76.99 one year ago.

The price differential between WCS and WTI averaged US$13.27 per barrel in the third quarter of 2015, up from US$11.57 the previous quarter but down from US$20.18 in the third quarter of 2014.

“As the third quarter progressed, market conditions for heavy oil deteriorated. This was largely attributable to pipeline and refinery disruptions in August, including the BP Whiting refinery which runs primarily heavy crude oil from Canada.” 34

For 2016, major Canadian banks and the U.S. Energy Information Administration (EIA) estimate the price of WTI will fall within the range of US$50-US$58 per barrel.35 This is lower than the forecast used in Alberta’s recent budget.36 The Alberta government 2016/17 budget assumes US$61 per barrel oil, noting that every $1 decline in the price of oil translates into a $170 million negative impact to their bottom line.37

“Oil prices are expected to begin recovering in the second half of 2016, averaging US$50 in 2015-16, [US$61 in 2016-17] and then to slowly ascend towards US$68 by 2017-18. Energy analysts have widely different opinions on the speed of recovery and the level prices will recover to. Views on the underlying fundamental price vary from $70 to $100, and time frames are anywhere from two to five years. Price forecasts depend on an array of assumptions about demand and supply. Factors influencing demand include economic

0.00#

20.00#

40.00#

60.00#

80.00#

100.00#

120.00#

Q1#09

#Q2#09

#Q3#09

#Q4#09

#Q1#10

#Q2#10

#Q3#10

#Q4#10

#Q1#11

#Q2#11

#Q3#11

#Q4#11

#Q1#12

#Q2#12

#Q3#12

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#Q1#13

#Q2#13

#Q3#13

#Q4#13

#Q1#14

#Q2#14

#Q3#14

#Q4#14

#Q1#15

#Q2#15

#Q3#15

#

US$/bbl'

Benchmark'Oil'Prices'(US$/Barrel)'and'WCS'Differen<al'Quarterly'Average,'Q1'2009'I'Q3'2015'

WCS#Differen6al# West#Texas#Intermediate#(WTI)#

Western#Canada#Select#(WCS)#

Source: Baytex Energy Corp, Historical Oil Pricing

!$46!!

!$48!!

!$50!!

!$52!!

!$54!!

!$56!!

!$58!!

!$60!!

Sco,a! US!EIA! BMO! TD! RBC! CIBC!

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Forecast! Average!


34 Baytex Energy Corp., Q3 2015 Heavy Oil Pricing Update – October 2, 2015.

35 Scotia Global Forecast Update (highest value in the range), Nov 2, 2015; US EIA Short Term Energy Outlook, Nov 10, 2015; BMO Commodity Forecast, Nov 25, 2015; TD Commodity Price Report, Sep 18, 2015; RBC Dominion Securities Sep 18, 2015; CIBC Commodities Update, Sep 16, 2015.

36 Government of Alberta, Budget 2015, Fiscal Plan 2015 - 2018,October 27, 2015.

37 Ibid, p.37.

26 THE ECONOMY

growth in disparate regions around the world, from the US to China to Europe, pipeline or refinery outages, and storage and speculative market activities by traders. On the supply side, investment and drilling decisions by producers, geopolitical events, civil unrest or terrorist strikes, economic sanctions, OPEC market-manipulation or simple weather-related production disruptions all have to be factored into forecasting.” 38

Crude Oil ProductionCrude oil production in Alberta was down 1.4 per cent year over year in the second quarter of 2015 to 38.1 million cubic metres. Light and medium crude oil production fell 10.2 per cent year-over-year while heavy crude and synthetic crude production declined by 9.2 per cent and 7.2 per cent respectively. Production of crude bitumen (oil sands), however, increased 7.1 per cent.39

Year-to date August 2015, crude oil production in Alberta reached 111.8 million cubic metres, a 6.7 per cent increase compared to the first eight months of 2014. Production of crude bitumen was the main driver of growth, increasing13.8 per cent year-over-year.

Energy companies in western Canada will continue to boost production over the next five years, although at a slower rate than was previously anticipated. Western Canadian crude oil production is now forecast to increase from 3.676 million barrels per day (b/d) in 2015 to 3.826 million b/d in 2016, according to the Canadian Association of Petroleum Producers (CAPP) June 2015 Forecast.

CAPP’s June 2014 forecast projected crude oil production in western Canada would reach 3.932 million b/d in 2016. This translates into a downward revision of about 106,000 b/d. Total production in 2020 is now forecast at 4.381 million b/d, which is 266,000 b/d lower than last year’s forecast.

!5000$

5000$

15000$

25000$

35000$

45000$

Q1$20

07$

Q2$20

07$

Q3$20

07$

Q4$20

07$

Q1$20

08$

Q2$20

08$

Q3$20

08$

Q4$20

08$

Q1$20

09$

Q2$20

09$

Q3$20

09$

Q4$20

09$

Q1$20

10$

Q2$20

10$

Q3$20

10$

Q4$20

10$

Q1$20

11$

Q2$20

11$

Q3$20

11$

Q4$20

11$

Q1$20

12$

Q2$20

12$

Q3$20

12$

Q4$20

12$

Q1$20

13$

Q2$20

13$

Q3$20

13$

Q4$20

13$

Q1$20

14$

Q2$20

14$

Q3$20

14$

Q4$20

14$

Q1$20

15$

Q2$20

15$

cubic%metres%x

%1000%

Alberta%Crude%Oil%Produc6on%Heavy$crude$oil$ Light$and$medium$crude$oil$Synthe@c$crude$oil$ Crude$bitumen$


0"

1000"

2000"

3000"

4000"

5000"

2014" 2015f" 2016f" 2017f" 2018f" 2019f" 2020f"

Thou

sand

)b/d)

Western)Canada)Crude)Oil)Produc6on)Forecast)

June"2014"Forecast" June"2015"Forecat"

Source: Canadian Association of Petroleum Producers


38 Government of Alberta, Budget 2015, Fiscal Plan 2015 - 2018,October 27, 2015, p.36.

39 Statistics Canada, CANSIM table 126-0001.

27 THE ECONOMY

“The Canadian crude oil industry is facing risks on multiple fronts in a market transformed by increased global crude oil supplies resulting in lower oil prices. These market forces are the primary driver of our revised outlook. Lower oil prices have challenged project economics and reduced capital spending intentions. These constraints have dampened the outlook for future production growth.” 40

CAPP also projects a 40 per cent drop in oil and natural gas industry capital spending in 2015. Capital investment in Canada’s oil and natural gas industry is forecast to total $45 billion in 2015, down from $73 billion in 2014. In the oil sands, capital investment is forecast to decrease from $33 billion in 2014 to $23 billion in 2015.41

Active Drilling RigsThere was an average of 118 active drilling rigs in Alberta during the third quarter of 2015, down 53 per cent from an average of 249 active rigs in the third quarter of 2014.42 In western Canada, there was an average of 182 active drilling rigs this quarter, down 52 per cent from an average of 377 active rigs in the third quarter of 2014.43 The Canadian Association of Oilwell Drilling Contractors (CAODC) projects the number of active drilling rigs in western Canada to decline to an average of 191 this year, from 370 in 2014, representing a 48 per cent decline. The total number of operating days is forecast to drop to 68,308 this year, from 131,021 the previous year.44 In 2016, the number of active rigs is projected to fall a further 17 per cent to 159, and the number of operating days is forecast to drop to 56,260.

496$

152$

338$ 370$

521$

198$

377$ 384$

291$

95$

182$ 195$ 186$

88$157$

204$

0$

100$

200$

300$

400$

500$

600$

Q1$2013$

Q2$2013$

Q3$2013$

Q4$2013$

Q1$2014$

Q2$2014$

Q3$2014$

Q4$2014$

Q1$2015$

Q2$2015$

Q3$2015$

Q4$2015f$

Q1$2016f$

Q2$2016f$

Q3$2016f$

Q4$2016f$

Actual'and'Forecasted'Ac/ve'Drilling'Rigs''Western'Canada'7'Quarterly'Averages'

Source: Canadian Association of Oilwell Drilling Contractors


40 Canadian Association of Petroleum Producers, Crude Oil Forecast, Transportation and Marketing, June 2015,p.i.

41 Canadian Association of Petroleum Producers, News Release, Low world oil prices to slow growth of Canadian oil production, June 9, 2015.

42 Government of Alberta, Economic Dashboard, Active Drilling Rigs Alberta, http://economicdashboard.albertacanada.com/RigActivity

43 CAODC, Rig Counts - By Quarter, http://www.caodc.ca/rig-counts-drilling-dr-quarter

44 CAODC State of the Industry, 2015 Review & 2016 Forecast, November 2015.

28 THE ECONOMY

http://economicdashboard.albertacanada.com/RigActivity




http://www.caodc.ca/rig-counts-drilling-dr-quarter

http://www.caodc.ca/rig-counts-drilling-dr-quarter

“The Canadian Association of Oilwell Drilling Contractors (CAODC) has released a forecast for 2016 reflecting the dramatic downturn deeply impacting the oil and gas services industry. Low commodity prices, market access challenges, and cumulative regulatory and taxation changes have combined to create an investment climate that is resulting in uncertainty in Canadian markets. [...] CAODC President, Mark Scholz, emphasizes the depth of the current downturn: “Today, the oil and gas services industry is facing one of the most difficult economic times in a generation. The active rig count for the western Canadian rig fleet is at the same level as experienced in 1983, one of the worst periods in our history.”” 45

With the assumption that each active drilling rig represents 135 jobs (20 direct jobs and 115 indirect jobs), the CAODC projects that decreased drilling activity both this year and next could result in the loss of approximately 4,220 direct jobs and 24,265 indirect jobs compared to 2014.46

Building PermitsAlberta contractors took out $4.16 billion in building permits during the third quarter of 2015, down 13 per cent year-over-year. The larger pullback this quarter was on the residential side. Total residential permits declined to $2.35 billion, down 15 per cent from $2.67 billion in the third quarter of 2014. Non-residential permits fell to $1.81 billion, down 10 per cent from $2.02 billion a year earlier. Residential permits accounted for 57 per cent of the total value of permits issued during the third quarter of 2015.

“Alberta’s construction and real estate sector have been showing surprising strength throughout the current economic downturn. The total value of building permits in Alberta - an excellent indicator of construction intent - was only seven per cent lower between January and July compared to the same period last year. That is reasonably good considering last year was one of the best building permit years on record. Yet builders’ intentions are indeed slowing. Residential building permits currently sit ten per cent lower than last year [July 2015] and non-residential permits are 12.5 per cent lower.” 47

0"

500"

1000"

1500"

2000"

Jan)12"

Mar)12"

May)12"

Jul)1

2"Sep)12"

Nov)12"

Jan)13"

Mar)13"

May)13"

Jul)1

3"Sep)13"

Nov)13"

Jan)14"

Mar)14"

May)14"

Jul)1

4"Sep)14"

Nov)14"

Jan)15"

Mar)15"

May)15"

Jul)1

5"Sep)15"

$"millions"

Value"of"Building"Permits,"Alberta"

Residen;al" Non)residen;al"



45 CAODC, News Release, CAODC announces its 2016 Drilling Forecast, November 18, 2015.

46 CAODC State of the Industry, 2015 Review & 2016 Forecast, November 2015.

47 ATB Financial, Alberta Economic Outlook Q4 2015, October 1, 2015, p.4.

29 THE ECONOMY

Retail SalesRetail sales in Alberta totaled $6.30 billion in September 2015, down 1.1 per cent compared to the previous month and 5.6 per cent year-over-year. This was the largest year-over-year decline since October 2009, when sales were down 7.9 per cent.48

Retail sales declined in 9 of the 11 major spending categories year-over-year in September 2015. Sales at gasoline stations in Alberta were down 17.4 per cent, mainly as a result of lower prices. Sales from motor vehicle and parts dealers, which made up about 30 per cent of total retail sales, declined 7.2 per cent, while electronics and appliances sales dropped nearly 8.0 per cent. Health and personal care stores (+10.5 per cent) and building material and garden equipment and supplies dealers (+2.9 per cent) were the only two categories to record year-over-year growth in September 2015.

Retail sales in Alberta are forecast to decline 2.7 per cent in 2015, following robust growth of 7.5 per cent the previous year. In 2016, retail sales are projected to reach $78.4 billion, up a modest 2.6 per cent.

“A new progressive personal income tax rate that is going into effect on October 1 will hit some 7 per cent of tax filers and rake in about $1 billion for government coffers in this fiscal year along with the extra $530 million from the fuel tax increase. The new tax measures along with weaker job prospects and slower net inflow of migrants will put a damper on consumer demand. Retail sales contracted sharply in the first quarter of this year and we expect sales to slide by 2.7 per cent in 2015 with only a modest recovery slated for next year.” 49

PopulationFor the eighteenth consecutive quarter, Alberta recorded the highest quarterly population growth rate in Canada in the second quarter of 2015. The province’s population grew by 20,756 or 0.50 per cent to an estimated 4,196,500 as of July 1, 2015. Manitoba had the next highest population growth rate in the second quarter at 0.30 per cent, followed by Ontario (+0.29 per cent) and Saskatchewan (+0.27 per

4"

4.5"

5"

5.5"

6"

6.5"

7"

Mar*08"

Jun*08"

Sep*08"

Dec*08

"Mar*09"

Jun*09"

Sep*09"

Dec*09

"Mar*10"

Jun*10"

Sep*10"

Dec*10

"Mar*11"

Jun*11"

Sep*11"

Dec*11

"Mar*12"

Jun*12"

Sep*12"

Dec*12

"Mar*13"

Jun*13"

Sep*13"

Dec*13

"Mar*14"

Jun*14"

Sep*14"

Dec*14

"Mar*15"

Jun*15"

Sep*15"

$Billions((seasona

lly(adjusted)(

Alberta(Retail(Sales(($Billions)(



48 Statistics Canada, CANSIM Table 080-0020.

49 The Conference Board of Canada, Provincial Outlook, Summer 2015.

30 THE ECONOMY

cent). From April 1 - July 1, 2015, Canada’s population increased by 97,000 or 0.27 per cent to an estimated 35.85 million.50

Alberta gained 8,264 net interprovincial migrants during the second quarter, with most of the net migrants arriving from Ontario (+3,439), Quebec (+1,593), Manitoba (+1,419), and Saskatchewan (+1,369). The only other province with substantial gains in net interprovincial migrants was British Columbia (+3,974), while Quebec (-5,349), Manitoba (-2,154), Ontario (-2,012) and Saskatchewan (-1,444) recorded the largest net outflows.

Net international migration totaled 3,208 from April to June 2015, the smallest second quarter increase since the early 2000s. A net outflow of about 7,700 non-permanent residents (NPRs) was the main reason net international migration has eased.

“Alberta lost a record number of NPRs this quarter (-7,711) and a staggering -21,215 NPRs in the 2014-2015 census year, the highest annual outflow on record. While outflows of NPRs were not unexpected given the changes to the TFW program and the large stock of people with expiring work permits, this was far and away the highest net outflow in the country. Alberta’s annual net outflow was almost ten times greater than Saskatchewan’s, the only other province to experience sizeable annual outflows, and double Canada’s net outflow (-10,334).” 51

Alberta led all provinces with a natural growth rate of 0.22 per cent in the second quarter of 2015. Natural increase totaled 9,284, the result of 15,219 birth (a record high) and 5,935 deaths. Natural increase accounted for about 45 per cent of the province’s population increase in the second quarter of this year.

For the eleventh consecutive quarter, Alberta posted the highest annual population growth rate among provinces in the second quarter of 2015 at 1.83 per cent (+75,560). The national growth rate was 0.87 per cent. Still, this was the lowest second quarter growth for Alberta since 2010 and the lowest annual population increase since 2011.52

!10,000%

0%

10,000%

20,000%

30,000%

40,000%

Q1%20

08%

Q2%20

08%

Q3%20

08%

Q4%20

08%

Q1%20

09%

Q2%20

09%

Q3%20

09%

Q4%20

09%

Q1%20

10%

Q2%20

10%

Q3%20

10%

Q4%20

10%

Q1%20

11%

Q2%20

11%

Q3%20

11%

Q4%20

11%

Q1%20

12%

Q2%20

12%

Q3%20

12%

Q4%20

12%

Q1%20

13%

Q2%20

13%

Q3%20

13%

Q4%20

13%

Q1%20

14%

Q2%20

14%

Q3%20

14%

Q4%20

14%

Q1%20

15%

Q2%20

15%

Person

s'

Components'of'Alberta's'Popula3on'Growth'

Natural%Increase% Net%Interprovincial%Migra>on% Net%Interna>onal%Migra>on%

Source: Statistics Canada, CANSIM Table 276-0041.


50 Statistics Canada, Catalogue no. 91-002-XWE, Quarterly Demographic Estimates, April to June 2015, September 29, 2015.

51 Alberta Treasury Board and Finance, Quarterly Population Report, Second Quarter 2015.

52 Ibid.

31 THE ECONOMY

Canadian EconomyThis section on the Canadian Economy includes a discussion of: Economic Growth, Consumer Spending, Trade, Fiscal Policy and Housing.

Economic GrowthThe Canadian economy experienced a mild recession during the first half of 2015 as the decline in oil prices initiated a significant drag on investment. However, the economy bounced back in June and July through solid gains in exports and consumer spending. Recovering from maintenance and wildfire-related slowdowns, a surge in output within the mining, oil and gas industry also contributed to growth, with monthly increases of 2.6 and 2.9 per cent recorded in June and July respectively.53 While real GDP is expected to increase at a rate of nearly 3.0 per cent during the second half of 2015, the poor showing in the first half of the year is expected to result in overall growth of just 1.3 per cent in 2015 – the worst annual performance since 2009.

Looking ahead to 2016 and 2017, the Canadian economy is forecast to improve over the volatility of 2015 and remain near its estimated “cruising speed” of slightly above 2.0 per cent real GDP growth. However, this projected pickup is heavily predicated on a significant contribution from the trade sector, with as much as half of next year’s expected growth the direct result of an anticipated increase in exports.54 Further, this forecasted growth rebound is based on the assumption that the benchmark price of WTI oil will rise from an average price of about $50 this year to $55 in 2016 and to $65 by 2017. As the demand for Canadian exports and the price of oil are both primarily determined by external factors, a risk to Canada’s outlook is its increasing dependence on the performance of the global economy. A particularly prominent downside risk is the potential for the Chinese economy to underperform.

“…The dominant feed-through impact is via the commodity channel where China is a major driver of global prices. China has represented as much as 80% of new demand for metals over the past 5 years, and a third of oil demand growth. If Chinese growth surprises to the downside, commodity prices would surely fall further. In addition, demand for Canadian

!8# !6# !4# !2# 0# 2# 4# 6#

Imports#

Exports#

Government#

Investment#

Consump7on#

GDP#

Annual&%&Change&

Forecasted&Annual&%&Change&in&Canadian&GDP&and&Components&2015&to&2017&

2015# 2016# 2017#

Source: TD Economics


53 Scotia Economics, Canadian GDP Tracking For Q3 Bounce, September 30, 2015.

54 Conference Board of Canada, Canadian Outlook – Autumn 2015, October 27, 2015.

32 THE ECONOMY

exports could suffer, as some of our trading partners feel the effects of weaker Chinese growth.” 55

It is unlikely that investment will pick up the slack if Canada’s export sector falters. The environment of low oil prices, along with an eventual slowdown in home building activity, will continue to place downward pressure on investment spending.

“Relatively weak oil prices in the near term will continue the downward pressure on business investment, which does not return to growth until 2017. Even after recovering, oil prices are expected to settle in the $70 range, sufficient for solid if unremarkable investment growth. At the same time, residential investment is expected to contract in 2017 and 2018, consistent with a rebalancing of the housing market.” 56

Given the current outlook for a strong rebound in net trade and a pickup in overall growth, the Bank of Canada is not expected to make any further cuts to the overnight interest rate, which is set at 0.50 per cent. The first interest rate increase is not anticipated until early 2017, and is unlikely to be raised to its estimated long-term neutral level of 3.50 per cent until 2020.57

Consumer SpendingAfter a relatively weak first half of 2015 where consumer expenditure grew by just 1.4 per cent (annualized), a number of factors were expected to provide a boost to consumption in the third quarter of 2015.

In July, retroactive payments of the expanded universal child care benefit (UCCB) were estimated to lift consumer spending by nearly a full percentage point.58 Following the July payment (which covered the January to June period), the UBBC is then distributed on a monthly basis, meaning that the Q3 boost to consumption will be a one-time event (and the benefit may be cancelled entirely by the new incoming government).

Continued strength in overall housing activity in the third quarter, led by the Toronto and Vancouver markets, should also encourage spending – particularly on durable and semi-durable goods. Indeed,

0"100"200"300"400"500"600"700"800"900"1000"

Jan" Feb" Mar" Apr" May" Jun" Jul" Aug" Sep" Oct" Nov" Dec"

Monthly(Oil(Well(Comple0ons(in(Western(Canada((2009,(2010(to(2014(Average,(2015(

2015" 2010"to"2014"Avg" 2009"

Source: Canadian Association of Oilwell Drilling Contractors


55 TD Economics, Quarterly Economic Forecast, September 21, 2015.

56 TD Economics, Long-Term Economic Forecast, September 21, 2015.



33 THE ECONOMY

much of the third quarter’s estimated 3.2 per cent (annualized) increase in consumer expenditure was driven by a 7.2 per cent jump in spending on durable goods, reflecting the still-accommodative financing environment and savings provided by low gasoline prices.

Retail sales data for the third quarter supported higher spending, as monthly growth surpassed expectations at 0.6 and 0.5 per cent in July and August respectively, putting quarterly sales growth at about 3.0 per cent (annualized).59 However, rising sales were mostly concentrated in motor vehicles and parts (+2.0 per cent) and furniture and home furnishings (+3.0 per cent), with only four of the eleven major subsectors reporting positive growth. Sales were flat in August excluding autos.

Beyond the third quarter of 2015, elevated household debt levels, a normalization of interest rates, and an anticipated mild correction in the housing market in 2016 and 2017 should act to restrain spending growth.60 However, these effects should be counterbalanced by continued modest gains in employment and income, resulting in a long-run trend of about 2.0 per cent annual consumer spending growth.

TradeFollowing a drop in exports (-3.6 per cent) and a slight rise in imports (+0.2 per cent), Canada’s trade deficit widened to $2.5 billion in August, from $817 million in July.61 The decline in exports was led by energy products (-14.7 per cent), but this was entirely driven by lower prices as volumes were up 2.0 per cent. Even with the relatively poor trade reading in August, trade is expected to contribute positively to growth in the third quarter due to a strong reading in July, U.S. demand still going strong, a depreciated Canadian dollar with further weakness likely in store, as well as the fact that it is trade volumes that are used in determining inflation-adjusted GDP growth.

“…We are still tracking quite strong gains in exports net of imports in the third quarter. This is favourable to GDP growth expectations. Export volumes are tracking a gain of about 10% in Q3 over Q2 at a seasonally adjusted and annualized pace. Import volumes are tracking comparatively flat. That means that net trade will add to Q3 GDP growth…” 62

Looking ahead, continued strength in exports will be supported by a Canadian dollar that is expected to fall to as low as 73 cents U.S, accompanied by rising U.S. demand.

“The weaker currency will have a notable impact on exports of services, including tourism, which tend to be more sensitive to currency movements. At the same time, lower oil prices are helping to reduce input costs for manufacturers, providing an additional boost.” 63


59 Scotia Economics, Canadian Retail Sales Pick Up In August, October 22, 2015.

60 TD Economics, Long-Term Economic Forecast, September 21, 2015.

61 TD Economics, Data Release: Canada trade deficit widens in August, October 6, 2015.

62 Scotia Economics, Trend In Canadian Trade Recovery Continues, October 6, 2015.


34 THE ECONOMY

Also projected to boost Canada’s trade position is the Trans-Pacific Partnership (TPP) agreement, which was signed by twelve countries in early October and encompasses about 40 per cent of the global economy.64 While not yet ratified and the full details not yet revealed, the TPP should lead to lower tariffs and increased market access for several Canadian goods and services in member countries over the long-term.

Another important consideration is the economic value of interprovincial trade, which has been growing steadily since 2002. Despite these gains, Canada-wide interprovincial trade has failed to expand as a share of GDP, suggesting that numerous non-tariff barriers continue to impede trade flows across provinces.65 Researchers suggest that these impediments to trade cost the Canadian economy up to $37 billion per year and contribute to welfare differences across regions.

“Explicit trade barriers within Canada are not permitted. That said, a number of non-tariff barriers tied to regulatory differences between provinces impede on the trade of goods and services across regions. The most common impediments relate to labour mobility, government procurement and business regulation. The agriculture and transportation and warehousing industries are often cited as the sectors most stunted by this regulatory environment.” 66

British Columbia, Alberta and Saskatchewan have recorded the largest gains in interprovincial trade since 2002, likely reflecting the New West Partnership Agreement and the previous Trade, Investment and Labour Mobility Agreement, which removed many non-tariff trade barriers among the western provinces. Further, most regions have acknowledged the inefficiencies associated with these barriers, and a revamping of the existing (and somewhat “toothless”) Agreement on Internal Trade is expected in March 2016.67

!2#

!1#

0#

1#

2#

3#

4#

5#

NL# PE# NS# NB# QC# ON# MB# SK# AB# BC# CAN#

Average'Year)Over)Year'%'Change'in'Real'Interprovincial'and'Interna8onal'Exports,'2002'to'2014'Provinces'and'Canada'

Interprovincial# InternaAonal#

Source: TD Economics


64 TD Economics, Data Release: Canada trade deficit widens in August, October 6, 2015.

65 TD Economics, Internal Trade in Canada: To Sustain Solid Gains, Barriers Must Fall, October 22, 2015.

66 Ibid.

67 Ibid.

35 THE ECONOMY

Fiscal PolicyWith the Liberal Party, led by Justin Trudeau, having won a strong majority government in the federal election on October 19, key points in the party’s platform suggest significant, new fiscal directions for Canada over the second half of the decade.

In terms of revamping the tax system, the Liberal Party has promised to remove Conservative-implemented programs such as income splitting and the universal child care benefit, to be replaced by new programs and benefits. New initiatives include a Canada Child Benefit aimed at middle-income families, reduced personal income tax rates for middle-income earners, a new tax bracket for high-income earners, reductions to the small business tax rate and Employment Insurance premiums, and an expansion of the Canadian Pension Plan program.68

The platform also included a commitment to additional infrastructure spending over the next four years – though the precise details of projects and timing are not yet known.

“Assisting output growth and job creation through FY20 is the Liberals’ ambitious infrastructure plan, adding $5.0 billion of investment in both FY17 and FY18, and $3.5 billion in FY19 and again in FY20. This new investment will be evenly split between public transit, social capital and green infrastructure.” 69

To fund their election promises, deficits of about $10 billion per year are planned for the next two fiscal years, with a return to a balanced budget by 2019-20.70 While the large-scale spending plan could boost GDP growth in 2016 and 2017 by a substantial 0.1 and 0.3 percentage points respectively, federal debt is expected to decline from its current level of about 30 per cent of GDP to 26.5 per cent by 2021 – the lowest rate among major G7 economies.

After four years of no growth, total government spending is projected to increase by 0.9 per cent in 2015 and by 1.0 per cent in 2016.71 Beyond 2016, increased deficit spending at the federal level should allow for a larger contribution from the government sector.

HousingIn September, Canadian housing starts jumped to 230,700 units (annualized), the highest level since August 2012, bringing the third quarter average to 212,700 up from about 193,000 in the second quarter.72 Most of September’s gain was driven by the volatile multi-family component (+10.5 per cent), while single-detached starts were up only slightly (+0.8 per cent).


68 TD Economics, With a Liberal Win, Infrastructure Set to Take a Bigger Role, October 20, 2015.

69 Scotia Economics, Canada’s October 2015 Federal Election … Implementing a Broad Liberal Platform, October 20, 2015.

70 TD Economics, With a Liberal Win, Infrastructure Set to Take a Bigger Role, October 20, 2015.


72 BMO Economics, Cdn Homebuilding: From Simmer to Boil, October 8, 2015.

36 THE ECONOMY

The sharp acceleration in housing starts over the past three months suggests some upside to third quarter GDP growth.73 However, in line with rising mortgage rates and a gradual moderation in household formation acting to reduce demand, the currently high level of residential construction is expected to slow to a more sustainable level over the next two years.

Existing home sales fell 2.1 per cent in September and were up just 0.7 per cent from one year ago.74 While it was the second best September on record and sales remain elevated relative to historical trends, home buying activity has moderated on a national level, in part due to heightened regional disparities.

“The pace of sales declines in oil-rich regions has picked up, with Calgary down 34.2% y/y, Edmonton off 8.2%, and Regina down 17.9%. Meantime, red-hot Vancouver and Toronto are losing some steam, with sales falling in the month and up only 15.4% y/y for the former and just 1.9% for the latter. By contrast, sales have picked up in a number of other cities … This may be the start of a more equitable shift in regional housing markets, as buyers seek more affordable options outside the GVA and GTA.” 75

The quality-adjusted MLS home price index for existing homes in Canada was up by a five-year high of 6.9 per cent in September (year-over-year) following a 6.4 per cent gain in August.76 Single-family home prices were up 9.0 per cent, compared to a 4.2 per cent rise in multi-family units. However, much of the price growth over the past year was attributable to Vancouver (+13.7 per cent) and Toronto (+10.5 per cent), with average home prices up a more sedate 2.9 per cent with these markets excluded – a rate largely in line with income growth. Looking ahead, average existing home prices are likely to be held back by a shift towards more affordable types of housing (i.e. condos) and regions (away from Toronto and Vancouver). In 2016, home price growth is expected to slow to an average of about 3.0 per cent, moderating further to below 2.0 per cent in 2017.77

100#

120#

140#

160#

180#

200#

220#

240#

260#

2000# 2002# 2004# 2006# 2008# 2010# 2012# 2014# 2016# 2018# 2020#

Actual'and'Forecasted'Canadian'Housing'Starts''and'Household'Forma6on,'2000'to'2020'

Housing#Starts# Household#Forma9on#

Source: Conference Board of Canada


73 Scotia Economics, Canadian Housing Starts Surge To Three Year High, October 8, 2015.

74 TD Economics, Data Release: Canadian housing market activity eases into fall, October 15, 2015.

75 BMO Economics, Slowing Pace in Two Horse Race, October 15, 2015.

76 TD Economics, Data Release: Canadian housing market activity eases into fall, October 15, 2015.


37 THE ECONOMY

Global/U.S. EconomyThis section on the Global/U.S. Economy includes a discussion of: Global Economic Growth, Advanced Economies, Emerging Economies, U.S. Economic Growth, Investment, Consumer Spending, the Housing Market, and the Labour Market.

Global Economic GrowthGlobal real GDP growth decelerated to 2.9 per cent during the first half of 2015,78 reflecting a further slowdown in emerging markets and a weaker-than-expected recovery in advanced economies. Of the two largest growth engines, the U.S. economy is gradually powering up, while China’s economy is gradually powering down.

Global economic activity has been steadily moderating since 2010, following the massive stimulus-induced rebound in 2010. This is the opposite of past recoveries, where growth momentum was driven by improved synchronization among advanced and emerging economies. Growth in the volume of world trade has trended lower relative to past recoveries, with aggregate trade growth in emerging economies turning negative in 2015 for the first time since 2009. Forecasters are not optimistic that a significant recovery in global trade will be observed this year.

“Many countries, Canada included, fall into the ‘moderate growth’ performance category, with the negative trade impact of slowing Chinese growth having a greater impact than the positive trade impact associated with the U.S. revival. Low interest rates and low oil prices are helping to underpin global activity, but the generally sluggish behaviour internationally leaves little margin for error…” 79

With a slight pickup in advanced economies through the remainder of the year, global growth is expected to finish 2015 at an average rate of 3.1 per cent, slightly lower than 3.4 per cent in 2014.80 While the global economy is undergoing a challenging period characterized by heightened uncertainty, the ongoing recovery in advanced economies is expected to strengthen into 2016, offsetting a gradual slowdown in China. Further, the economic distress in countries such as Brazil and Russia is expected

!25%%!20%%!15%%!10%%!5%%0%%5%%

10%%15%%20%%25%%

2003%

2004%

2005%

2006%

2007%

2008%

2009%

2010%

2011%

2012%

2013%

2014%

2015%

Year%Over%Year(Percentage(Change(in(Trade(Volumes(Advanced(and(Emerging(Economies,(January(2007(to(July(2015(

Advanced% Emerging%

Source: CPB Netherlands Bureau for Economic Policy Analysis


78 IMF, World Economic Outlook, October 2015, p.1.

79 Scotia Economics, Global Forecast Update, September 30, 2015.


38 THE ECONOMY

to diminish into 2016, resulting in an improved global growth rate of 3.6 per cent. However, much rests on the ability of Chinese policymakers to ensure a soft landing for their economy, and the Federal Reserve delivering a gradual pace of interest rate hikes.

Advanced EconomiesThe Euro Area economic recovery continued through the first half of 2015, with the region posting relatively solid quarterly growth rates of 0.5 and 0.4 per cent in the first and second quarters respectively.81

However, the economic performances of Euro Area members over the past few years have been disparate. France and Italy, the second and third largest economies in the region respectively, have consistently disappointed in terms of growth relative to the Euro Area average.

“…The recent volatile growth path, the lack of a clear upward trend in growth, and weak demand and investments bring the sustainability of the current recovery in France into question and increase the need for further structural reforms that France has not implemented yet.” 82

Conversely, Spain, a country that had struggled to sustain an economic recovery in the aftermath of the financial crisis, has regularly outpaced the Euro Area growth average over the past two years. A clear upward growth trend has been evident in Spain since early 2013, with a relatively strong quarterly growth rate of 1.0 per cent recorded in the second quarter of 2015. Forecasters point to rising investment levels, along with the implementation of much-needed structural reforms on part of the Spanish government.83

Moving forward, economic growth in the Euro Area is expected to pick up speed, though a slowdown in emerging markets (particularly China) will act as a downside risk to the near-term trade outlook, potentially threatening the ongoing recovery. The proportion of Euro Area exports destined for BRICS (Brazil, Russia, India, China, South Africa) countries has more than doubled over the last fifteen years (from 3.4 per cent in 2000 to over 7.0 per cent).84 However, rising exports to a strengthening U.S. economy may offset this decline.

!0.4%&

!0.2%&

0.0%&

0.2%&

0.4%&

0.6%&

0.8%&

1.0%&

1.2%&

2013Q3&

2013Q4&

2014Q1&

2014Q2&

2014Q3&

2014Q4&

2015Q1&

2015Q2&

Quarterly)Real)GDP)Growth)Rates,)Seasonally)Adjusted,)Euro)Area,)Spain,)France,)and)Italy,)Q3)2013)to)Q2)2015)

Euro&Area& Spain& France& Italy&

Source: Eurostat


81 Eurostat, Quarterly National Accounts Database.

82 The Conference Board Economics Watch, European View, September 24, 2015.

83 Ibid.

84 Ibid.

39 THE ECONOMY

Forecasters expect the Euro Area to record real GDP growth in the range of 1.4 to 1.5 per cent this year, with the recovery gaining some traction in 2016 at growth of 1.6 per cent.85

In Japan, an impressive rebound during the first quarter of 2015 (+4.5 per cent real GDP growth, annualized) was followed by a contraction (-1.2 per cent) in the second quarter due to diminished consumption and exports.86 The threat of deflation continues to loom, as inflation fell to 0.0 per cent in July 2015. Nevertheless, in mid-2015 Japan’s unemployment rate fell to 3.3 per cent, close to a 20-year low, and in July earnings growth increased to 0.6 per cent (year-over-year), the fastest pace since May 2005. Economic growth is projected to improve into 2016, but another consumption tax hike scheduled for early 2017 will weigh on the outlook if it is implemented.

Across advanced economies, the U.K. is among the furthest along in its recovery. Over the first half of 2015, real GDP expanded at an average annualized rate of 2.3 per cent; and the unemployment rate fell to 5.5 per cent – close to its pre-crisis average.87 Steady labour market gains and low consumer price inflation should continue to bolster domestic demand. However, an 18 per cent trade-weighted appreciation of the pound sterling since early 2013 could limit export growth, and an interest rate hike by the Bank of England expected by mid-2016 may result in further currency strength.88

Emerging EconomiesFor most emerging economies, external factors have contributed to a generally weaker outlook for 2015. As a group, these economies were tracking at about 4.0 per cent growth in mid-2015, below the 5.0 and 4.6 per cent rates recorded in 2013 and 2014 respectively.89 A slowdown in China, heightened financial market volatility, and declining commodity prices has led to weak trade growth, slowing capital inflows, and currency depreciation across many emerging economies.

Chinese policymakers continue to push ahead with their agenda to transition away from a centrally planned reliance on heavy industry and more sustainably focused on consumer and

!6%$

!4%$

!2%$

0%$

2%$

4%$

6%$

8%$

10%$

2012Q1$

2012Q2$

2012Q3$

2012Q4$

2013Q1$

2013Q2$

2013Q3$

2013Q4$

2014Q1$

2014Q2$

2014Q3$

2014Q4$

2015Q1$

2015Q2$

Year%Over%Year(Quarterly(Real(GDP(Growth(Rates((Brazil,(China,(India,(and(Russia,(Q1(2012(to(Q2(2015(

Brazil$ China$ India$ Russia$

Source: OECD



86 TD Economics, Global Outlook: Advanced Markets Gear Up, But Hit Emerging Market Speed Bumps, September 21, 2015.




40 THE ECONOMY

services-driven growth. China’s industrial sector is unable to maintain growth momentum due to years of excess capacity, debt accumulation, and soft global demand.90 The Chinese government has set its real GDP growth target at “around 7 per cent” this year, but concerns regarding the soundness of this official estimate and the extent of the economic downturn has already contributed to currency depreciation and severe financial market turbulence in the Chinese economy. These concerns have also weighed on global commodity prices, which on average have reached their lowest levels since the 2008-09 financial crisis.

“The complexity of these simultaneous reforms, the lack of global precedent, and the scale and importance of the Chinese economy can almost guarantee that the global economy will face periods of volatility and increased investor risk aversion associated with China’s reform execution.” 91

Conversely, India will surpass China as the world’s fastest growing economy this year, emerging as a regional engine with real output growth hovering around 7.5 per cent. Bolstered by its strong trade ties to the U.S. and Euro Area, India’s economy is expected to grow by 7.3 per cent in 2015 and by 7.6 per cent in 2016.

“Low international oil prices, rising wages, and accommodative monetary conditions will support consumer spending, while the government’s efforts to promote infrastructure projects will underpin investment activity. … India is relatively insulated from the ongoing concerns regarding China’s economic growth deceleration as less than 5% of its exports are purchased by China compared with a regional average of over 20%.” 92

Among other major emerging economies, Brazil remains under severe economic duress as it implements deep structural adjustments and handles the Petrobras scandal (a company accounting for about 8 per cent of domestic investment). Brazil has been in recession since early 2014, and is expected to post further decline through the rest of 2015 with inflation nearing the double digits.93 The Russian economy has also contracted since late 2014, induced by very low oil prices as well as Western sanctions related to ongoing geopolitical events.

Emerging economies will continue to face significant headwinds in 2015 and 2016. The impending liftoff of U.S. interest rates from current near-zero levels is expected to result in an intensification of financial market volatility, currency depreciation, and capital outflow in emerging economies. Capital



91 Scotia Economics, Asia-Pacific Regional Outlook, September 22, 2015.

92 Ibid.

93 The Conference Board Economics Watch, Emerging Markets View, September 2015.

41 THE ECONOMY

outflows have already amounted to about $370 billion over the past year.94 As China’s financial markets possess limited foreign exposure, the turbulence is unlikely to trigger a global crisis. However, China’s ongoing economic slowdown will dampen the trade, investment and confidence outlook across many emerging markets.

Emerging markets as a group are expected to grow by a post-crisis low of about 4.0 per cent in 2015, with a modest rebound to 4.3 and 4.6 per cent expected in 2016 and 2017 respectively. This pace falls far below the 2002 to 2014 growth average of 6.2 per cent.

U.S. Economic GrowthFollowing a subdued first quarter of 2015 where poor weather conditions, a west coast port strike and energy-related investment cuts led to growth of just 0.6 per cent, the U.S. economy roared back to life in the second quarter and posted an impressive real GDP growth rate of 3.9 per cent.95

“Consumer spending increased at a solid pace supplemented by another strong gain in residential construction activity while the unleashing of pent-up demand for exports created by the port strike boosted volumes in the second quarter.” 96

Weak global economic conditions, financial market volatility in many emerging markets, and concerns regarding growth in China have contributed to driving up the value of the U.S. dollar, which will weigh on trade growth into next year. In addition to a growing trade deficit, other factors acting to slow the U.S. economy include historically weak investment, low productivity, slow wage growth, and a buildup in inventories.97

While these headwinds are substantial, U.S. fundamentals remain strong. Growth in the U.S. economy will continue to be driven by robust consumer spending, low oil prices, strong job growth, accommodative borrowing conditions and a solid housing market.

!1#

!0.5#

0#

0.5#

1#

1.5#

2#

2.5#

3#

3.5#

2012# 2013# 2014# 2015H1#

Percen

tage)Point)Con

tribu/

on)to

)GDP

)

U.S.)Real)GDP)Growth)Composi/on)(Annualized),)2012)to)2015H1)

Consump2on# Investment# Net#Exports# Government# GDP#

Source: Bureau of Economic Analysis



95 Bureau of Economic Analysis, Gross Domestic Product: Second Quarter 2015 (Third Estimate), September 25, 2015.

96 RBC Economics, Economic and Financial Market Outlook, September 2015.

97 The Conference Board Economics Watch, US View, September 23, 2015.

42 THE ECONOMY

Forecasters generally expect the U.S. economy to grow in the 2.4 to 2.6 per cent range this year, with similar rates continuing into 2016 and 2017 – a pace slightly above the 2.2 per cent average over the course of the recovery.98

“The bottom line is that the domestic economy is humming along, albeit in a relatively low gear, with little threat from inflation or monetary policy changes. This stands in stark contrast to a very unsettled international economic environment (and one that likely will remain unsettled well into 2016 or even beyond).” 99

InvestmentIndustrial production in the U.S. declined by 0.2 per cent in September, but was still up 1.8 per cent for the third quarter as a whole – compensating for some of the 2.2 per cent decline in the second quarter of the year.100 During the third quarter, growth industries included utilities (+1.3 per cent) and manufacturing (+2.4 per cent), with warmer-than-usual weather and decade-high auto sales contributing, respectively.

However, the outlook for investment in the U.S. economy remains subdued. According to the National Federation of Independent Business’ August survey, capital expenditures over the next three to six months were unlikely to accelerate from the current 3.2 per cent growth trend, as businesses grapple with a strong dollar and soft global demand.

The energy sector continued to be a drain on investment activity in the third quarter, with a sizeable 4.0 per cent drop in drilling in September and many firms announcing cuts through 2019. However, the number of active oil rigs seems to have stabilized somewhat. Following a massive drop from about 1,500 active oil rigs at the beginning of 2015 to less than 650 by the end of the second quarter, the number of rigs was largely unchanged during the third quarter.101 While the drag from the retrenchment of energy companies is expected to diminish from the major cuts made during the first half of 2015, growth in this industry is unlikely to occur until oil prices recover.

!5#

0#

5#

10#

15#

20#

Q3#2011#

Q3#2012#

Q3#2013#

Q3#2014#

Q3#2015#

Q3#2016#

Q3#2017#

Year%Over%Ye

ar(Percent(Cha

nge(

Actual(and(Forecasted(Year%Over%Year(%(Change(in(U.S.((Non%Residen>al(Fixed(Investment,(Q3(2011(to(Q4(2017(

Source: Bureau of Economic Analysis, TD Economics


98 TD Economics, U.S. Economic Outlook: Global Headwinds Will Not Blow Growth Off Course, September 21, 2015.


100 RBC Economics, US industrial production edged lower in September, October 16, 2015.

101 Baker Hughes, North America Rotary Rig Count.

43 THE ECONOMY

Consumer SpendingWith a diminished trade outlook, very slow investment growth and an underperforming public sector, U.S. economic growth relies more heavily on consumer demand. Luckily, after years of paying down debt and solid job growth, consumers possess some capacity to support the overall economic performance.

Consumer spending growth came in at 3.1 per cent in the second quarter of 2015 after disappointing at just 1.8 per cent in the first quarter.102 Much of the rebound was attributable to decade-high auto sales, as borrowing costs remained low and vehicle prices have been rising at a slower rate than consumer incomes.

Into the second half of 2015, spending is expected to grow at 2.7 per cent, up from an average of 2.4 per cent in the first half. Spending growth should accelerate further into 2016 at a rate of around 3.0 per cent. Forecasters anticipate that consumers will be encouraged by recent housing price gains, further improvements in job creation and wage growth, favourable credit conditions and low gasoline prices.

“Whereas in June, the average household was set to save $700 at the gas pumps relative to last year, they will now save over $900. As there is a lag between when the savings occur and when they show up in spending, the largest upside to spending will take place over the course of 2016.” 103

However, in September, retail sales increased by just 0.1 per cent on the month. This rate of growth underperformed expectations; and retail spending excluding autos contracted by 0.3 per cent.104 Although retail sales only account for about one-quarter of total consumer expenditure, September’s deceleration (along with a downward revision to August’s estimate) is troubling, given how crucial consumption remains to the U.S. outlook.

Housing MarketU.S. housing starts surged 6.5 per cent in September 2015 to 1,206,000 units (annualized).105 Most of September’s jump was due to an outsized 18.3 per cent increase in the volatile multi-family component, with single-family starts rising by just 0.3 per cent on the month. Building activity in the third quarter of 2015 was up 2.0 per cent from the prior quarter, representing the highest reading since the fourth quarter of 2007. Housing starts in the U.S. still remain well below the peaks of the 2005-06 period.106




104 Scotia Economics, Flash: U.S. Retail Sales Slow Down To End Q3, October 14, 2015.

105 BMO Economics, Starts Built Up, October 20, 2015.

106 Scotia Economics, Flash: U.S. Housing Starts Re-Accelerate To Near Post-Crisis High, October 20, 2015.

44 THE ECONOMY

While the number of residential building permits issued slipped 5.0 per cent in September to a six-month low of 1,103,000 units (annualized), the drop was almost entirely driven by multi-family permits, as single-family permits continue to hover around its post-recession peak.107 Forecasters are optimistic that despite the drop in building permits issued and a reported shortage of workers in the construction sector,108 residential investment will continue to be buoyed by still-low interest rates, tight inventories, rising home prices, demand from Millennials and steady job growth.

Driven almost entirely by additional demand for single-family housing, existing home sales also posted a solid 4.7 per cent increase in September to nearly an eight-year high of 5.55 million units (annualized). Overall, existing home sales were up 8.3 per cent in the third quarter of 2015 relative to last year.109 Also in September, the median sales price of an existing home was up a solid 6.1 per cent year-over-year, due primarily to rising prices for single-family homes.

One piece of bad news in September was a decline in the share of homes sold to first-time buyers, which slipped to 29 per cent from 32 per cent in August (unchanged year-over-year). In a healthy market, these buyers will typically account for more than 40 per cent of sales.110

Forecasters generally expect the U.S. housing market to post continued growth, reaching 1.5 million new starts by the end of 2017, encouraged by a strong upward trend in household formation.

“According to the Census Bureau, there were over 1.5 million households created between the second quarter of this year and the same quarter a year ago – the strongest growth since 2006. … Construction continues to run behind the rate of household formation, especially within the rental segment, where the vacancy rate has fallen to a 30 year low. This gap should begin to close through the forecast.” 111


107 TD Economics, Data Release: Housing starts remain near the 1.2 million post-recession peak, October 20, 2015.

108 RBC Economics, US housing starts beat expectations in September, October 20, 2015.

109 TD Economics, Data Release: After a quiet August, U.S. homebuyers step up their game in September, October 22, 2015.

110 BMO Economics, Repeat Homebuyers Snap Up U.S. Existing Homes, October 22, 2015.


45 THE ECONOMY

Labour MarketDuring the first seven months of 2015, monthly job growth in the U.S. averaged an impressive 214,000, slightly slower than 2014’s average pace of 260,000.112 Later in the third quarter, job creation slowed with increases of just 136,000 and 142,000 in August and September respectively. Despite this moderation, persistent hiring strength brought the unemployment rate to 5.1 per cent in August, its lowest level since April 2008 and within the estimated long-run “full employment” or structural range of 4.9 to 5.2 per cent. Nonetheless, there is likely a significant amount of joblessness and underemployment not captured by the headline unemployment rate; and it may be possible for the unemployment rate to decline further.

“In normal circumstances, unemployment hitting the structural rate would imply that there was no longer any excess slack left in the labor market. In all likelihood, “shadow” slack still remains in the form of discouraged workers that are currently considered outside of the labor force. And, the lack of significant wage pressures suggests that the unemployment rate can continue to drift lower.” 113

Another reason the unemployment rate may continue to drop is a historically low rate of labour force growth projected over the next fifteen years. The labour force contracted by a substantial 350,000 workers in September following a 41,000 decline in August; and the participation rate reached a new 38-year low of 62.4 per cent.114 Given a very low rate of labour force expansion, even moderate job growth should continue to lower the unemployment rate, which is expected to move below 5.0 per cent late in 2015.

The slow growth in labour supply should eventually place upward pressure on wages, which have been stuck at around 2.0 per cent annual growth for the past five years.115 In October, firms reported a greater frequency of skilled labour shortages in some regions of the U.S, indicating that higher wages should be forthcoming.

!2%$

0%$

2%$

4%$

6%$

8%$

10%$

Q1$2008$

Q1$2009$

Q1$2010$

Q1$2011$

Q1$2012$

Q1$2013$

Q1$2014$

Q1$2015$

Q1$2016$

Q1$2017$

Actual'and'Forecasted'U.S.'Unemployment'Rate,'Year8Over8Year'%'Change'in'Labour'Force'and'Average'Wages,'Q1'2008'to'Q4'2017'

Labour$Force$ Unemployment$Rate$ Wages$

Source: Bureau of Labor Statistics, TD Economics, Conference Board of Canada


112 RBC Economics, Economic and Financial Market Outlook, September 2015.


114 Bureau of Labor Statistics, Employment Situation, October 2, 2015.

115 BMO Economics, A September Not to Remember, October 2, 2015.

46 THE ECONOMY

Labour Market Review

Calgary Census Metropolitan Area (CMA)

EmploymentEmployment in the Calgary CMA rose slightly by 2,400 in September 2015, following three months of decline. Overall, employment declined by 8,200 or 1.0 per cent on a quarterly basis in the third quarter of the year, following a gain of 8,500 in the second quarter of 2015.

“If you needed any more proof that the job market in Calgary has cooled off, a survey by a U.S.-based hiring firm [Express Employment Professionals - Top 50 Hot Job Markets in Canada] has dropped the city from 10th to 19th place among the hottest job markets in the country.” 116

On a year-over-year basis, however, employment in the Calgary CMA was up 18,700 or 2.3 per cent in the third quarter of 2015.

Labour Force Survey Statistics - Calgary CMA

Calgary CMA Jul-15 Aug-15 Sep-15

Population 1,180,300 1,183,300 1,185,800Labour Force 876,000 875,000 878,900

Employed 818,400 816,900 819,300Unemployed 57,600 58,100 59,600

Participation Rate 74.2% 73.9% 74.1%Employment Rate 69.3% 69.0% 69.1%Unemployment Rate 6.6% 6.6% 6.8%Source: Statistics Canada, CANSIM Table 282-0135, Labour Force Survey, 3-month moving average, seasonally adjusted

Q3 2015 Q2 2015Quarterly Change Q3 2014

Annual Change

1,183,100 1,174,000 9,100 1,149,600 33,500876,600 875,100 1,500 842,200 34,400818,200 826,400 -8,200 799,500 18,70058,400 48,700 9,700 42,800 15,60074.1% 74.5% -0.4% 73.3% 0.8%69.2% 70.4% -1.2% 69.5% -0.3%6.7% 5.6% 1.1% 5.1% 1.6%

Source: Statistics Canada, CANSIM Table 282-0135, Labour Force Survey, 3-month moving average, seasonally adjusted

!700,000!!

!720,000!!

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!840,000!!

Sep,11!

Dec,11

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Mar,12!

Jun,12!

Sep,12!

Dec,12

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Mar,13!

Jun,13!

Sep,13!

Dec,13

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Mar,14!

Jun,14!

Sep,14!

Dec,14

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116 CBC News Calgary, Calgary slides down list of hot job markets to #19, survey says, September 3, 2015.

LABOUR MARKET REVIEWThis section examines labour market information for the Calgary Region, Alberta and Canada.

47

The most significant year-over-year employment gains were in services that are driven by the size of the population,117 including health care and social assistance (+23,100), trade (+9,100), accommodation and food services (+8,800) and information, culture and recreation (+7,900). Employment declined in seven industries year-over-year, with the most notable decreases in construction (-16,800) and professional, scientific and technical services (-13,100), two industries closely tied to the oil and gas industry.

Overall, the Conference Board of Canada is forecasting employment in the Calgary CMA to increase by 2.3 per cent in 2015, translating into approximately 18,000 net new jobs. In 2016, employment is projected to decline by 0.9 per cent.118

Calgary’s services-producing sector is forecast to lead employment growth in 2015 (+4.0 per cent). Significant growth in transportation and warehousing (+19 per cent) public administration (+11 per cent) and non-commercial services (+7.7 per cent) is projected to be partially offset by employment losses in business services (-4.1 per cent) and finance, insurance and real estate (-3.7 per cent).

Employment in Calgary’s goods-producing sector is projected to decline by 2.5 per cent this year. Construction employment is forecast to decrease by almost 5.0 per cent, while employment in the manufacturing industry and primary and utilities industry is expected to decline by 1.0 per cent and 0.6 per cent respectively.119

UnemploymentThird quarter 2015 net job losses combined with an increase in the labour force resulted in Calgary’s unemployment rate jumping to an average of 6.7 per cent. This is up significantly from 5.6 per cent in the second quarter of 2015 and up from 5.1 per cent year-over-year.

!16,800'

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!5,900'

!4,700'

!3,500'

!2,400'

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1,700'

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6,600'

7,900'

8,800'

9,100'

23,100'

!25,000' !15,000' !5,000' 5,000' 15,000' 25,000'

Construc6on'Prof.,'scien6fic'&'tech.'services'

Bus.,'bldg.'&'other'support'services'Forestry,'fishing,'mining,'oil'&'gas'

Manufacturing'Other'services'

Educa6onal'services'Fin.,'insurance,'real'est.'&'leasing'

Public'administra6on'U6li6es'

Transporta6on'&'warehousing'Informa6on,'culture'&'recrea6on'Accommoda6on'&'food'services'

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Annual&Change&in&Employment&by&Industry&Calgary&CMA&8&Q3&2015&



117 The City of Calgary, September 2015 Labour Market Review, October 9, 2015.

118 The Conference Board of Canada, Metropolitan Outlook1, Autumn 2015.

119 Ibid.

48 LABOUR MARKET REVIEW

The number of unemployed people in the Calgary CMA continued to climb throughout the third quarter to an average of 58,400, up 9,700 from the previous quarter and up 15,600 year-over-year. Calgary’s unemployment rate is forecast to average around 6.0 per cent over the next two years.120 According to the City of Calgary Corporate Economics Department, “Sustained periods with an above 6 per cent unemployment rate, will put the CER [Calgary Economic Region] labour force participation rate at risk of decline.”121

Calgary had the third highest unemployment rate among major metropolitan areas in the third quarter of 2015, tied with Toronto. Regina and Quebec posted the lowest unemployment rates in the third quarter at 4.4 and 4.6 per cent respectively, while Montreal had the highest unemployment rate at 8.8 per cent.

Alberta

EmploymentEmployment in Alberta surged in September 2015 (+12,300), following a modest gain of 4,700 net new jobs in August and a loss of 4,300 positions in July. Overall in the third quarter of 2015, employment in the province was down by 2,600 or -0.1 per cent compared to the previous quarter.

“July’s weak results were widely expected as conditions facing the oil and gas sector have not improved. Global production of crude oil continues to outpace consumption as OPEC (Organization of Petroleum Exporting Countries) reaffirmed its commitment to maintaining existing output levels. Industry representatives are now talking about “lower for longer”, as hopes for a recovery of oil prices in 2015 fade. The benchmark price for North American crude (West Texas Intermediate or WTI) trended lower on the month, triggering another round of job and spending cuts by producing firms. With far less money flowing into the province than in previous years, the negative effects continue to spread throughout the broader economy.” 122

Year-over-year, employment in Alberta increased by 31,000 or 1.4 per cent in the third quarter of 2015, representing about 18 per cent of the new jobs created nationally.

4.3$4.6$

5.4$5.7$ 5.8$ 5.8$ 5.8$ 5.9$

6.4$ 6.4$6.7$ 6.7$

8.5$8.8$

0.0$

1.0$

2.0$

3.0$

4.0$

5.0$

6.0$

7.0$

8.0$

9.0$

10.0$

Regina$

Québec$

Victoria$

Edmonton$

Saskatoon$

Winnipeg$

Vancouver$

Halifax$

St.$John's$

OMawaOGaQneau$

Calgary$

Toronto$

Saint$John$

Montréal$

Une

mploymen

t*Rate*(%

)*

Unemployment*Rates*of*Canadian*CMAs,*Q3*2015*



120 The Conference Board of Canada, Metropolitan Outlook1, Autumn 2015.

121 City of Calgary, Corporate Economics, July 2015 Labour Market Review, August 7, 2015.

122 Employment and Social Development Canada, Labour Market Bulletin - Alberta: July 2015.


Labour Force Statistics - Alberta

Among Alberta’s seven major economic regions, Lethbridge-Medicine Hat had the highest rate of annual employment growth at 4.9 per cent, with 7,000 more people working this quarter. Calgary and Edmonton had the next highest rates of employment growth (around 2.0 per cent) while growth was minimal in the Wood Buffalo-Cold Lake region (+0.8 per cent). On the other hand, employment declined year-over-year in Camrose-Drumheller (-5.2 per cent), Red Deer (-4.8 per cent) and the Banff-Jasper-Rocky Mountain House-Athabasca-Grande Prairie-Peace River regions (-0.6 per cent).

Full-time employment in Alberta rose by 4,400 or 0.2 per cent quarter-over-quarter in the third quarter of 2015, but was offset by a larger decline in part-time employment (-6,600 or -1.7 per cent). On a year-over-year basis, part-time employment grew at a slightly faster pace (1.5 per cent) than full-time employment (1.3 per cent) in the third quarter of 2015.

Virtually all the job losses in the third quarter of 2015 were among men, with employment declining by 2,900 compared to the previous quarter. Employment for women was relatively unchanged quarter-over-quarter. On an annual basis, employment for women rose by 27,200 or 2.7 per cent, a much stronger increase than for men (+3,800 or +0.3 per cent).

Employment for youth aged 15 - 24 years in Alberta declined on both a quarterly (-8,700) and a yearly basis (-2,200) in the third quarter of 2015. Albertans aged 55 years and older also posted quarterly job losses (-300), however employment for this age cohort increased by 21,700 year-over-year.

Alberta Jul-15 Aug-15 Sep-15Population 3,360,400 3,365,100 3,369,700Labour Force 2,446,100 2,449,500 2,475,800

Employed 2,298,200 2,302,900 2,315,200Unemployed 147,800 146,700 160,600

Participation Rate 72.8% 72.8% 73.5%Employment Rate 68.4% 68.4% 68.7%Unemployment Rate 6.0% 6.0% 6.5%Source: Statistics Canada, CANSIM Table 2820087, Labour Force Survey, seasonally adjusted


Annual Change

3,365,100 3,346,000 19,100 3,295,500 69,6002,457,100 2,446,100 11,000 2,388,400 68,7002,305,400 2,308,000 -2,600 2,274,400 31,000

151,700 138,200 13,500 114,100 37,60073.0% 73.1% -0.1% 72.5% 0.5%68.5% 69.0% -0.5% 69.0% -0.5%6.2% 5.6% 0.6% 4.8% 1.4%

Source: Statistics Canada, CANSIM Table 2820087, Labour Force Survey, seasonally adjusted

!5.2%&

!4.8%&

!0.6%&

0.8%&

1.8%&

2.2%&

4.9%&

!8.0%& !6.0%& !4.0%& !2.0%& 0.0%& 2.0%& 4.0%& 6.0%&

Camrose&!&Drumheller&

Red&Deer&

Banff!Athabasca&

Wood&Buffalo!Cold&Lake&

Edmonton&

Calgary&

Lethbridge&!&Medicine&Hat&

Change'in'Employment'by'Economic'Region'in''Alberta'Q3'2014'to'Q3'2015'(year=over=year'per'cent'change)'

Source: Statistics Canada, CANSIM table 282-0122, 3-month moving average, seasonally unadjusted



In September 2015, the unemployment rate for Alberta youth was 11.8 per cent, significantly higher than the rate of 7.5 per cent posted in January 2015. On the other hand, youth unemployment rates have declined since the beginning of the year in Saskatchewan, Manitoba, Prince Edward Island, Quebec and Ontario.

“The tougher job market in Alberta this year has made it more difficult for young people entering the work force. In September, the rate of unemployment for workers aged 15 to 24 was 11.8 per cent, adjusted for seasonality. That’s close to the highest level seen over the last five years. Traditionally, young job seekers in Alberta have had it better than their peers in other provinces. The national rate has generally been closer to 13 or 14 per cent. And since 2010, the youth unemployment rate here has been approximately four-and-a-half percentage points lower than the Canadian average. But lately this gap has narrowed dramatically. [In September] it was a mere 1.7 percentage points below the national rate, which has remained mostly unchanged at about 13.5 per cent. The economic downturn in our province is clearly to blame for the rising rates of youth unemployment.” 123

Employment by Type of Work, Gender and Age - Alberta

0.0%$2.0%$4.0%$6.0%$8.0%$10.0%$12.0%$14.0%$16.0%$18.0%$20.0%$22.0%$

SK$

MB$

AB$

PE$

QC$

Canada$

BC$

ON$

NS$

NB$

NL$

Une

mploymen

t*Rate*

Unemployment*Rates*for*Youth*(aged*15*8*24),*Canada*and*Provinces,*January*and*September*2015*

Jan:15$ Sep:15$

Source: Statistics Canada, CANSIM table 282-0087, seasonally adjusted

AlbertaEmploymentFull-timePart-timeMenWomen15 - 24 years25 - 54 years55 years +Source: Statistics Canada, CANSIM Table 282-0087, Labour Force Survey, seasonally adjusted


Annual Change

2,305,400 2,308,000 -2,600 2,274,400 31,0001,918,100 1,914,000 4,100 1,893,000 25,100

387,300 393,900 -6,600 381,400 5,9001,266,400 1,269,300 -2,900 1,262,600 3,8001,039,000 1,038,700 300 1,011,800 27,200

319,600 328,300 -8,700 321,800 -2,2001,553,600 1,547,100 6,500 1,542,100 11,500

432,300 432,600 -300 410,600 21,700Source: Statistics Canada, CANSIM Table 282-0087, Labour Force Survey, seasonally adjusted


123 ATB Financial, The Owl, Jobless rate rising for young people. Todd Hirsch, October 27, 2015.


Employment in Alberta’s goods-producing sector declined by 7,400 net jobs in the third quarter of 2015, compared to the previous quarter, led by losses in forestry, fishing, mining and oil and gas (-4,300 or -2.7 per cent) and agriculture (-2,200 or -3.4 per cent). Utilities was the only industry in the goods-producing sector to post a slight increase in employment on a quarterly basis (+200 or +1.0 per cent).

Year-over-year, employment in the goods-producing sector was down by 25,600 (or -3.9 per cent) in the third quarter, led by a 13.6 per cent decrease (-24,700 net jobs) in the forestry, finishing, mining and oil and gas industry.

“Oil prices continued to slide for most of the month [Aug 2015], briefly hitting a six-year low of less than $38 US per barrel. Overall, the industry is expecting prices to remain lower for longer. As a result of this weaker outlook, a number of Alberta-based energy producers have announced a further round of layoffs. [For example, in early September Penn West Petroleum announced it would reduce staffing by approximately 400 positions, while ConocoPhillips plans to cut 500 jobs.]” 124

Employment in Alberta’s services-producing sector rose by 4,800 or 0.3 per cent in the third quarter of 2015 relative to the previous quarter. The most notable employment gains were in trade (+7,500), information, culture and recreation (+4,400), professional, scientific and technical services (+3,600) and public administration (+3,500). Only three services-producing industries posted employment losses on a quarterly basis: transportation and warehousing (-8,300 or -1.9 per cent), other services (-5,900 or -4.9 per cent) and accommodation and food services (-2,600 or -1.7 per cent).

Year-over-year, the services-producing sector in Alberta added 56,7000 net jobs, an increase of 3.5 per cent. Eight of eleven industries in the sector posted annual gains, led by health care and social assistance (+22,700), educational services (+11,800), accommodation and food services (+9,500) and public administration (+9,000). Employment in the professional, scientific and technical services industry declined by 13,700 or -7.3 per cent year-over-year in the third quarter of 2015.

!24,700'!13,700'!10,400'

!7,300'!100'

1,000'4,000'4,500'4,900'5,800'6,200'7,900'9,000'9,500'11,800'

22,700'

!40,000' !20,000' 0' 20,000' 40,000'

Forestry,'fishing,'mining,'oil'&'gas'Prof.,'scienBfic'&'tech.'services'

Manufacturing'Other'services'

Fin.,'insurance,'real'estate'&'leasing'ConstrucBon'Agriculture'

UBliBes'Bus.,'bldg.'&'other'support'services'InformaBon,'culture'&'recreaBon'

Trade'TransportaBon'&'warehousing'

Public'administraBon'AccommodaBon'&'food'services'

EducaBonal'services'Health'care'&'social'assistance'

Annual&Change&in&Employment&by&Industry&Alberta&7&Q3&2015&

Source: Statistics Canada, CANSIM table 282-0088, seasonally adjusted


124 Government of Canada Job Bank, Labour Market Bulletin Alberta: August 2015.


Employment by Industry - Alberta

AlbertaAll IndustriesAgricultureForestry, fishing, mining, oil & gasUtilitiesConstructionManufacturingTradeTransportation & warehousingFinance, insurance, real estate & leasingProfessional, scientific & technical servicesBusiness, building & other support servicesEducational servicesHealth care & social assistanceInformation, culture & recreationAccommodation & food servicesOther servicesPublic administrationSource: Statistics Canada, CANSIM Table 2820088, Labour Force Survey, seasonally adjusted


Annual Change

2,305,400 2,308,000 -2,600 2,274,400 31,00062,300 64,500 -2,200 58,300 4,000

156,900 161,200 -4,300 181,600 -24,70021,000 20,800 200 16,500 4,500

259,400 259,600 -200 258,400 1,000138,300 139,200 -900 148,700 -10,400323,700 316,200 7,500 317,500 6,200136,700 145,000 -8,300 128,800 7,900105,300 105,000 300 105,400 -100173,900 170,300 3,600 187,600 -13,70082,500 81,100 1,400 77,600 4,900

137,500 137,100 400 125,700 11,800265,400 264,900 500 242,700 22,70077,200 72,800 4,400 71,400 5,800

153,300 155,900 -2,600 143,800 9,500115,400 121,300 -5,900 122,700 -7,300

96,700 93,200 3,500 87,700 9,000Source: Statistics Canada, CANSIM Table 2820088, Labour Force Survey, seasonally adjusted

Looking ahead, employment growth in Alberta is forecast to average between 1.0 per cent (RBC, Scotiabank) and 1.4 per cent (BMO) in 2015 and between -0.7 per cent (TD) and 0.3 per cent (BMO) in 2016.125

“Job creation has held up well in Alberta, with employment up 1.7% Y/Y, YTD through August. That said, we are projecting a steep decline in employment over the next few quarters. Public sector employment has propped up the Alberta jobs market so far this year. Given the fiscal challenges facing the province, this is not expected to continue.” 126

UnemploymentAlberta had an average of 151,700 unemployed people in the third quarter of 2015, up 13,500 from the previous quarter and up 37,600 compared to the third quarter of 2014. The province’s unemployment rate jumped to an average of 6.2 per cent this quarter, up from 5.6 per cent in the second quarter of 2015 and 4.8 per cent year-over-year.

Among economic regions in Alberta, the Wood Buffalo-Cold Lake region had the highest average unemployment rate in the third quarter of 2015 at 7.7 per cent, up from 5.0 per cent the previous year. Red Deer’s unemployment rate reached 7.4 per cent this quarter, up from 3.6 per cent in the third


125 RBC Economics, Provincial Outlook, September 2015, TD Economics, Provincial Economic Forecast October 2015, BMO Economics, Provincial Economic Outlook, November 2015, Scotia Economics, Global Forecast Update, November 2015.

126 TD Economics, Provincial Economic Forecast, October 8, 2015, p.5.


quarter of 2014. The Camrose-Drumheller region had the lowest unemployment rate among Alberta’s economic regions at 3.6 per cent, up slightly from 3.3 per cent a year earlier.

Alberta’s unemployment rate is forecast to average around 5.9 per cent in 2015 and between 6.1 per cent (RBC) and 6.8 per cent (BMO) in 2016.127

The average duration of unemployment in Alberta increased to 15.9 weeks in September 2015, from 15.4 weeks the previous month and 15.8 weeks year-over-year. For Alberta men, the average duration of unemployment was 19.3 weeks in September 2015, compared to 11.7 weeks for women. At the national level, the average length of unemployment declined to 19.5 weeks in September, from 20.5 weeks in both August 2015 and September 2014. Saskatchewan had the lowest average duration of unemployment in September 2015 at 13 weeks, followed by Manitoba (15.2 weeks) and Alberta (15.9 weeks). Quebec recorded the highest figure at 21.5 weeks.

The number of long-term unemployed in Alberta (those jobless for 27 weeks or more) almost doubled to 22,500 in September 2015, from 11,700 in September 2014, and accounted for 15 per cent of the total unemployed in the province. Nationally, the number of long-term unemployed (232,400) made up 19 per cent of the total unemployed in September 2015.128

Canada

EmploymentThe Canadian economy continued to add jobs this quarter, albeit the gains were modest. Employment in Canada rose by 6,600 in July and by 12,000 in both August and September 2015. Overall, an average of 34,000 net new jobs were created in the third quarter of 2015 compared to the previous quarter.

“Canada added 12k jobs in September, suggesting ongoing resilience in the labor market. However, the headline is the net of a large loss in full-time jobs combined with a significant increase in part-time workers. Other details of the report are also weak: hours worked

0"

5"

10"

15"

20"

25"

Jan)09"

Jul)0

9"

Jan)10"

Jul)1

0"

Jan)11"

Jul)1

1"

Jan)12"

Jul)1

2"

Jan)13"

Jul)1

3"

Jan)14"

Jul)1

4"

Jan)15"

Jul)1

5"Average'weeks'of'u

nemploymen

t'

Dura5on'of'Unemployment,'Canada'and'Alberta'

Canada" Alberta"

Source: Statistics Canada, CANSIM table 282-0047, seasonally unadjusted


127 RBC Economics, Provincial Outlook, September 2015, TD Economics, Provincial Economic Forecast October 2015, BMO Economics, Provincial Economic Outlook, November 2015, Scotia Economics, Global Forecast Update, November 2015.



dropped and the headline is bolstered mainly by gains in self-employed workers. We also note a substantial 51k drop in education jobs in September which may be distorting some of this month’s figures.” 129

On a year-over-year basis, employment in Canada increased by 171,900 or 1.0 per cent in the third quarter of 2015.

Labour Force Survey Statistics - Canada

The majority of forecasters project moderate employment growth of 1.0 per cent or less for Canada over the next few years. TD Economics is forecasting employment in Canada to increase by 0.6 per cent in 2016, led by growth in Ontario (1.0 per cent), British Columbia (1.0 per cent) and Quebec (0.8 per cent). Employment is projected to decline in Alberta and Newfoundland and Labrador in 2016. In 2017, however, Alberta is again projected to lead employment growth (+1.4 per cent), while employment in Newfoundland and Labrador is forecast to contract for a fourth consecutive year.

“Employment in Newfoundland and Labrador is expected to record the sharpest decline (-1.5%) among the provinces this year, partially reflecting weakness in the public sector. Over the 2016-17 period, we assume that employment continues to move lower. Reduced capital spending will continue to have ripple effects in the labour market over the near term while an era of fiscal restraint will cap job creation in the public sector.” 130

Canada Jul-15 Aug-15 Sep-15Population 29,296,100 29,321,500 29,352,300Labour Force 19,260,000 19,312,000 19,342,600

Employed 17,954,000 17,966,000 17,978,100Unemployed 1,306,000 1,346,100 1,364,500

Participation Rate 65.7% 65.9% 65.9%Employment Rate 61.3% 61.3% 61.2%Unemployment Rate 6.8% 7.0% 7.1%Source: Statistics Canada, CANSIM Table 2820087, Labour Force Survey, seasonally adjusted


Annual Change

29,323,300 29,235,600 87,700 29,029,300 294,00019,304,900 19,239,200 65,700 19,131,200 173,70017,966,000 17,932,000 34,000 17,794,100 171,9001,338,900 1,307,200 31,700 1,337,100 1,800

65.8% 65.8% 0.0% 65.9% -0.1%61.3% 61.3% -0.1% 61.3% 0.0%6.9% 6.8% 0.1% 7.0% -0.1%



129 Scotiabank, Global Economics, ScotiaFlash, Canadian Jobs Resilient, But Distorted, October 9, 2015.

130 TD Economics, Provincial Economic Forecast, October 8, 2015, p.13.


Full-time employment in Canada rose by 51,800 net new positions on a quarterly basis in the third quarter of 2015, offset by losses of 17,900 in part-time positions. Year-over year, full-time employment increased by 258,200, while part-time employment declined by 86,300.

Men accounted for the majority of the job gains on a quarterly basis this quarter, as the number of men employed in Canada increased by 31,400 or 0.3 per cent. Year-over-year, employment growth for men (+1.3 per cent) outpaced employment growth for women (+0.6 per cent) in the third quarter of 2015.

Employment for Canadian youth (aged 15 - 24 years) declined on both a quarterly and an annual basis in the third quarter of 2015. Year-over-year, youth employment was down by 21,200 or 0.9 per cent, led by declines is Manitoba (-4.2 per cent), Saskatchewan (-2.8 per cent), New Brunswick (-2.0 per cent) and Ontario (-1.2 per cent). In September 2015, Ontario’s Ministry of Training, Colleges and Universities announced the launch of the Youth Job Connection Program. This program will provide support and training to Ontario youth with multiple barriers to employment.

“The province will invest more than $160 million over two years to help over 27,000 young people get the skills and training they need to build a better future.” 131

The Youth Job Connection Program is part of the province’s renewed Youth Jobs Strategy to invest $250 million over the next two years to serve up to 150,000 more youth.132

From May to August each year, Statistics Canada’s Labour Force Survey also collects additional information on employment conditions for youth aged 15 - 24 years with intentions of returning to school in the fall. Year-over-year comparisons can only be made since the data is not seasonally adjusted.

The average unemployment rate for Canadian students aged 15 - 24 over the summer was 16.8 per cent, little changed compared to the previous summer. Students aged 20 - 24 had an average unemployment rate of 10.1 per cent from May to August 2015, down from 10.6 per cent in the summer of 2014. In addition, students aged 15 - 24 worked an average of 24.1 hours per week at all jobs over

!4.2%&

!2.8%&!2.0%&

!1.2%&!0.9%&!0.9%&!0.7%&!0.6%&

0.8%&1.4%&

3.2%&

!5.0%&!4.0%&!3.0%&!2.0%&!1.0%&0.0%&1.0%&2.0%&3.0%&4.0%&

MB&

SK&

NB&

ON&

QC&

Canada&

AB&

PE&

BC&

NL&

NS&

Year%over%year)%)cha

nge)

Annual)Change)in)Employment)for)Youth)(aged)15)%)24))Canada)and)Provinces,)Q3)2015)

Source: Statistics Canada, CANSIM table 282-0087


131 Ontario Ministry of Training, Colleges and Universities, News Release, Ontario Launches New Youth Employment Program, September 2, 2015.

132 Ibid.


the summer of 2015, up from 23.5 hours per week the previous summer and 23.7 hours per week in the summer of 2013.133

Sixty per cent of the net new job created in the third quarter of 2015 were among Canadians aged 55 years and older, with employment for this group up nearly 3.0 per cent year-over-year. Employment also increased by 90,500 or 0.8 per cent year-over-year for Canadians aged 25 - 54 years.

Employment by Type of Work, Gender and Age - Canada

Canada’s services-producing sector added 46,400 net jobs on a quarterly basis in the third quarter of 2015, led by gains in public administration (+20,800 or +2.3 per cent) and professional, scientific and technical services (+18,300 or +1.4 per cent). In contrast, employment in Canada’s goods-producing sector declined by 12,300, led by losses of over 4,000 jobs in each of the agriculture, construction and manufacturing industries.

Year-over-year, employment increased by 74,500 (+3.4 per cent) in health care and social assistance, accounting for almost 45 per cent of the net new jobs in Canada in the third quarter of 2015. Employment gains were also significant in transportation and warehousing (+38,500 or +4.4 per cent), business, building and other support services (+37,300 or +5.2 per cent), professional, scientific and technical services (+33,500 or +2.5 per cent), finance, insurance, real estate and leasing (+29,400 or +2.7 per cent) and educational services (+25,700 or +2.0 per cent). Six industries recorded annual employment losses this quarter. Other services experienced the greatest

CanadaEmploymentFull-timePart-timeMenWomen15 - 24 years25 - 54 years55 years +Source: Statistics Canada, CANSIM Table 2820087, Labour Force Survey, seasonally adjusted


Annual Change

17,966,000 17,932,000 34,000 17,794,100 171,90014,600,900 14,549,100 51,800 14,342,700 258,2003,365,100 3,383,000 -17,900 3,451,400 -86,3009,449,100 9,417,700 31,400 9,326,300 122,8008,516,900 8,514,400 2,500 8,467,800 49,1002,461,400 2,485,200 -23,800 2,482,600 -21,200

11,894,700 11,882,400 12,300 11,804,200 90,5003,610,000 3,564,400 45,600 3,507,300 102,700


!37,900'!14,600'!11,800'!11,200'

!6,500'!900'

200'2,400'6,000'7,500'

25,700'29,400'33,500'37,300'38,500'

74,500'

!60,000' !30,000' 0' 30,000' 60,000' 90,000'

Other'services'Public'administra?on'

Agriculture'Forestry,'fishing,'mining,'oil'&'gas'

Construc?on'Accommoda?on'&'food'services'

Trade'Manufacturing'

Informa?on,'culture'&'recrea?on'U?li?es'

Educa?onal'services'Fin.,'insurance,'real'est.'&'leasing'Professional,'scien?fic'&'technical'

Bus.,'bldg.'&'other'support'services'Transporta?on'&'warehousing'Health'care'&'social'assistance'

Annual&Change&in&Employment&by&Industry&Canada&7&Q3&2015&



133 Statistics Canada, The Daily, Labour Force Survey, August 2015, September 4, 2015.


loss (-37,900), followed by public administration (-14,600), agriculture (-11,800) and forestry, fishing, mining and oil and gas (-11,200).

Employment by Industry - Canada

Looking ahead, the Conference Board of Canada is forecasting employment in Canada to increase by 151,000 in 2015 and by 192,000 in 2016.

“All in all, employment growth is expected to be modest this year at only 0.8 per cent, before accelerating to 1.1 per cent next year. In 2017, investment in nonresidential structures is expected to start growing again, spurring job growth in the construction sector and supporting hiring in the business service segments of the economy. This will help push the unemployment rate down from 6.9 per cent in 2016 to 6.7 per cent in 2017.” 134

UnemploymentCanada’s unemployment rate averaged 6.9 per cent in the third quarter of 2015, up from 6.8 per cent the previous quarter but down from 7.0 per cent in the third quarter of 2014.

Saskatchewan had the lowest average unemployment rate among provinces in the third quarter of 2015 at 5.0 per cent, followed by Manitoba (5.5 per cent), British Columbia (6.1 per cent) and Alberta (6.2 per cent).

CanadaAll IndustriesAgricultureForestry, fishing, mining, oil & gasUtilitiesConstructionManufacturingTradeTransportation & warehousingFinance, insurance, real estate & leasingProfessional, scientific & technical servicesBusiness, building & other support servicesEducational servicesHealth care & social assistanceInformation, culture & recreationAccommodation & food servicesOther servicesPublic administrationSource: Statistics Canada, CANSIM Table 2820088, Labour Force Survey, seasonally adjusted


Annual Change

17,966,000 17,932,000 34,000 17,794,100 171,900288,400 293,200 -4,800 300,200 -11,800357,000 356,800 200 368,200 -11,200140,000 139,000 1,000 132,500 7,500

1,363,100 1,367,700 -4,600 1,369,600 -6,5001,706,500 1,710,600 -4,100 1,704,100 2,4002,735,900 2,735,100 800 2,735,700 200

923,200 926,400 -3,200 884,700 38,5001,106,700 1,109,200 -2,500 1,077,300 29,4001,373,100 1,354,800 18,300 1,339,600 33,500

761,200 760,700 500 723,900 37,3001,283,300 1,284,900 -1,600 1,257,600 25,7002,298,300 2,284,600 13,700 2,223,800 74,500

753,500 741,500 12,000 747,500 6,0001,204,000 1,220,100 -16,100 1,204,900 -900

762,000 758,300 3,700 799,900 -37,900909,900 889,100 20,800 924,500 -14,600



134 Conference Board of Canada, Canadian Outlook, Economic Forecast, Summer 2015, p.34.


The Atlantic provinces had the highest unemployment rates this quarter, ranging from 8.5 per cent in Nova Scotia to 12.3 per cent in Newfoundland and Labrador.

In line with the Conference Board of Canada’s forecast, Scotiabank projects the national unemployment rate to average 6.9 per cent in 2016. Saskatchewan (5.1 per cent) and Manitoba (5.2 per cent) are forecast to post the lowest unemployment rates next year, while the unemployment rates in the Atlantic provinces are expected to be in the range of 8.5 to 13 per cent.135

Job VacanciesEmployers in Canada had an estimated 241,600 job vacancies in July 2015. With approximately 1.35 million unemployed in the same month, Canada had 5.6 unemployed people for every job vacancy, down from 6.2 in July 2014.136

The western provinces had the lowest ratios of unemployment to job vacancies in July 2015. British Columbia had the lowest ratio at 3.3 unemployed for every job vacancy, while Newfoundland and Labrador had the highest ratio at 10.5 unemployed for every job vacancy.

With 32,100 vacancies and 150,100 unemployed in July 2015, Alberta’s ratio was 4.7, up from 2.3 the previous year.

Looking at the industry sectors in Canada shows the unemployment to job vacancies ratios in July 2015 ranged from about one unemployed person for every job vacancy in health care and social assistance, finance and insurance and public administration to approximately 11 unemployed people for every vacant job in mining and oil and gas. The administrative and support services industry had a notable decline in the unemployment to job vacancy ratio, with about three unemployed people for every vacant job in July 2015, down from seven the previous year.

0.0%$

2.0%$

4.0%$

6.0%$

8.0%$

10.0%$

12.0%$

14.0%$

Canada$

NL$

PE$

NS$

NB$

QC$

ON$

MB$

SK$

AB$

BC$

Unemployment*Rates,*Canada*and*Provinces*

Q3$2014$ Q3$2015$


10.5%

7.0% 6.4% 6.2% 5.6% 5.3% 4.8% 4.7% 4.7%3.3%

0.0%

3.0%

6.0%

9.0%

12.0%

15.0%

NL%

NB%

NS%

QC%

ON%

Canada%

MB%

PE%

SK%

AB%

BC%

Ra#o

%

Unemployment.to.Job%Vacancies%Ra#o,%Canada%and%Provinces,%three%month%average%July%2014%and%2015%

Jul?14% Jul?15%

Source: Statistics Canada, CANSIM table 284-0003. The ratio for NB in July 2015 is too unreliable to be published.


135 Scotiabank, Global Economics, Global Forecast Update, November 2, 2015, p.6.



Unemployment-to-Job Vacancies Ratio, Select IndustriesThree-Month Average, July 2014 and 2015

Industry Jul-14 Jul-15Mining & oil & gas 5.8 10.9Construction 7.0 8.9Educational services 8.8 8.7Arts, entertainment & recreation 5.6 6.6Retail trade 4.3 4.6Manufacturing 4.5 4.1Transportation & warehousing 2.4 3.4Other services 2.1 3.2Information & culture 2.2 2.9Administrative & support services 7.0 2.8Professional, scientific & technical 3.1 2.6Accommodation & food services 2.4 2.5Wholesale trade 2.3 2.4Public administration 1.1 1.2Finance & insurance 2.0 1.2Health care & social assistance 1.9 0.8Source: Statistics Canada CANSIM Table 284-0003



Employer Survey

The purpose of the quarterly survey is to gather information from Calgary and area employers on their recruitment and retention practices and various other employment issues they are facing. Over the course of the year, employers will be divided into four categories based on the number of employees in the company and results of the survey will be reported on as follows:

✓ Q1 2015: Large-sized companies with 100+ employees

✓ Q2 2015: Medium-sized companies with 50 – 99 employees

✓ Q3 2015: Small-sized companies with 10 – 49 employees

✓ Q4 2015: Micro-sized companies with <10 employees

Survey ProfileThe 200 small-sized employers surveyed employ approximately 4,795 people. Of this total, 86 per cent are full-time employees, 8 per cent are part-time employees, and 6 per cent are either contract, seasonal, casual, temporary or relief staff.

How many people does your company employ in the Calgary region?

”Other” represents companies in any of the following industries: agriculture, utilities, information & culture,management of companies, administrative & support services, educational services, other services or public administration.

Industry Total Employees

Number of Companies

Mining & Oil & Gas 493 20Construction 603 20Manufacturing 474 20Wholesale & Retail Trade 446 20Transportation & Warehousing 417 20Professional, Scientific & Technical Services 386 20Health Care & Social Assistance 568 20Accommodation & Food Services/Arts & Entertainment 430 20Finance, Insurance, Real Estate & Leasing 534 20Other 444 20Total 4,795 200


EMPLOYER SURVEYQ3 2015 Survey Results: Small-sized employers with 10 - 49 employees

61

Business ActivityOn balance, 10 per cent of the employers said their company downsized in the past 12 months.Eighteen per cent of the employers surveyed in Q3 2015 said their company expanded in the 12 months prior to their survey and 28 per cent reported their company downsized, resulting in a negative balance of 10 per cent.137 In Q3 2014, 18 per cent of the employers reported they expanded and 6 per cent said they downsized, for a positive balance of 12 per cent.

On balance, 35 per cent of the professional, scientific and technical services employers and 30 per cent of the mining and oil and gas and construction employers downsized in the last year. In addition, one-quarter of the manufacturing employers and 20 per cent of the wholesale and retail trade and transportation and warehousing employers reported they downsized. On the positive side, 25 per cent of the health care and social assistance employers, 20 per cent of the ‘other’ employers and 15 per cent of the finance, insurance, real estate and leasing employers on balance said their companies expanded in the last 12 months. Accommodation and food services/arts and entertainment employers were neutral on balance, with 20 per cent reporting they expanded and 20 per cent reporting they downsized.Past Business ActivityPercentage of companies that expanded or downsized in the 12 months prior to their survey

Expanded Downsized Balance Expanded Downsized BalanceOverall Results 18% 6% 12% 18% 28% -10%

Results by IndustryMining & Oil & Gas 20% 0% 20% 10% 40% -30%Construction 15% 5% 10% 10% 40% -30%Manufacturing 15% 15% 0% 10% 35% -25%Wholesale & Retail Trade 5% 20% -15% 15% 35% -20%Transportation & Warehousing 20% 10% 10% 20% 40% -20%Professional, Scientific & Technical Services 25% 5% 20% 15% 50% -35%Health Care & Social Assistance 15% 0% 15% 30% 5% 25%Accommodation & Food Services/Arts & Entertainment 19% 5% 14% 20% 20% 0%Finance, Insurance, Real Estate & Leasing 35% 5% 30% 25% 10% 15%Other 10% 0% 10% 25% 5% 20%

Q3 2014 Q3 2015

12%$

%10%$

%30%$

%20%$

%10%$

0%$

10%$

20%$

Q3$2014$ Q3$2015$

Has$your$company$expanded$or$downsized$$in$the$last$12$months?$

Expanded$ Downsized$ Balance$


137 Percentage of companies reporting an expansion minus percentage of companies reporting a downsize.

62 EMPLOYER SURVEY

On balance, only 4 per cent of the employers anticipate a business expansion in the next 12 months, down significantly from 24 per cent in Q3 2014.Eighteen per cent of the employers anticipate their company will expand in the 12 months following their survey and 14 per cent anticipate their company will downsize, for a positive balance of 4 per cent.138 In Q3 2014, 25 per cent anticipated an expansion and only 1 per cent anticipated a downsize, for a positive balance of 24 per cent.

On balance, one-quarter of the wholesale and retail trade employers, 15 per cent of the construction employers and 10 per cent of the manufacturing and finance, insurance, real estate and leasing employers anticipate a business downsize over the next year. On the other hand, several industries are optimistic about the next 12 months, with 35 per cent of the ‘other’ employers, one-quarter of the health care and social assistance and accommodation and food services/arts and entertainment and 10 per cent of the transportation and warehousing employers anticipating a business expansion.Future Business ActivityPercentage of companies that anticipate an expansion or downsize in the 12 months following their survey

Expansion Downsize Balance Expansion Downsize BalanceOverall Results 25% 1% 24% 18% 14% 4%

Results by IndustryMining & Oil & Gas 40% 0% 40% 10% 10% 0%Construction 35% 0% 35% 10% 25% -15%Manufacturing 15% 5% 10% 15% 25% -10%Wholesale & Retail Trade 5% 5% 0% 15% 40% -25%Transportation & Warehousing 40% 0% 40% 20% 10% 10%Professional, Scientific & Technical Services 40% 0% 40% 10% 10% 0%Health Care & Social Assistance 15% 0% 15% 25% 0% 25%Accommodation & Food Services/Arts & Entertainment 14% 0% 14% 25% 0% 25%Finance, Insurance, Real Estate & Leasing 30% 0% 30% 10% 20% -10%Other 15% 0% 15% 35% 0% 35%

Q3 2014 Q3 2015

Comments‣ “It's very tough to say right now. I'm being optimistic when I say that we won't downsize.” -

Accommodation & Food Services/Arts & Entertainment

‣ “If we can find more people to employ, we will expand our hours.” - Accommodation & Food Services/Arts & Entertainment

‣ “We will be opening a new property in 2016.” - Finance, Insurance, Real Estate & Leasing

24%$

4%$

%20%$

%10%$

0%$

10%$

20%$

30%$

Q3$2014$ Q3$2015$

Do#you#an(cipate#a#business#expansion#or#downsize#in#the#next#12#months?#

Expansion$ Downsize$ Balance$


138 Percentage of companies anticipating a business expansion minus percentage of companies anticipating a business downsize.

63 EMPLOYER SURVEY

‣ “We were going to expand, but we're going to hold up until next year.” - Finance, Insurance, Real Estate & Leasing

‣ “The way that oil and gas is going, I expect we will downsize. It probably takes about eight months for the downturn to catch up to us.” - Manufacturing

‣ “We won't be expanding as long as there is an NDP government in this province.” - Manufacturing

Employment: Past Layoffs, Vacant Positions and Future EmploymentTwenty-two per cent of the employers laid off workers in the three months prior to their survey.Twenty-two per cent of the employers reported they laid off workers in the three months prior to their survey (for reasons other than seasonality). This was up significantly from 11 per cent of the employers in the third quarter of 2014, and was led by professional, scientific and technical services and wholesale and retail trade (40 per cent each) and construction and mining and oil and gas (35 per cent each).

Overall, employers reported about 121 people were laid off, representing a layoff rate of 2.5 per cent. The construction industry had the highest layoff rate at 6.7 per cent, followed by mining and oil and gas (3.7 per cent) and professional, scientific and technical services (3.3 per cent). Additional details on layoffs can be found in Appendix B.

Number of Layoffs and Layoff Rates (in the three months prior to survey)

0%#10%#10%#

15%#15%#

20%#35%#35%#

40%#40%#

22%#

0%# 10%# 20%# 30%# 40%# 50%#

Fin.,#Insur.,#Real#Est.#&#Leasing#Transporta>on#&#Warehousing#

Other#Accomm.#&#Food/Arts#&#Ent.#

Health#Care#&#Social#Assistance#Manufacturing#

Mining#&#Oil#&#Gas#Construc>on#

Wholesale#&#Retail#Trade#Professional,#Scien>fic#&#Tech.#

Overall#

Percentage)of)companies)that)laid)off)employees)in)the)three)months)prior)to)survey)

Q3#2015# Q3#2014#

IndustryTotal

LayoffsConstruction 7Mining & Oil & Gas 6Professional, Scientific & Technical Services 10Health Care & Social Assistance 5Accommodation & Food Services/Arts & Entertainment 3Wholesale & Retail Trade 4Manufacturing 6Other 2Transportation & Warehousing 1Finance, Insurance, Real Estate & Leasing 3Total 47Layoff rate is the number of layoffs as a percent of total employment.

Q3 2014

Layoff Rate

Total Layoffs

1.5% 301.0% 182.3% 201.0% 120.5% 120.9% 101.2% 70.5% 70.2% 50.7% 01.0% 121

Q3 2015Q3 2014

Layoff Rate

6.7%3.7%3.3%2.8%2.7%1.8%1.5%1.3%1.2%0.0%2.5%

Q3 2015


64 EMPLOYER SURVEY

Comments‣ “Yes, we've laid of at least 10-15 people in the field.” - Construction

‣ “No, our Calgary layoffs were in March and April.” - Mining & Oil & Gas

‣ “We have laid off one consultant. We have cut our remaining consultant hours down as well.” - Mining & Oil & Gas

‣ “We've lost about a third of our staff.” - Other

Twenty-seven per cent of the employers had a total of 110 vacant positions that needed to be filled.Overall, 27 per cent of the employers reported they had vacant positions that needed to be filled at the time of their survey, down from 54 per cent in the third quarter of 2014. Sixty-five per cent of the health care and social assistance employers and 60 per cent of the accommodation and food services/arts and entertainment employers had vacant positions, compared to only 5 per cent of the mining and oil and gas employers and none of the construction employers.

Employers reported they had 110 vacancies that need to be filled. Vacancy rates ranged from a high of 6.3 per cent in the accommodation and food services/arts and entertainment industry to a low of less than 1.0 per cent in the mining and oil and gas and construction industries. Additional details on vacant positions can be found in Appendix B.

Number of Vacant Positions and Vacancy Rates

0%#5%#

15%#15%#

20%#25%#25%#

35%#60%#

65%#27%#

0%# 20%# 40%# 60%# 80%#

Construc4on#Mining#&#Oil#&#Gas#

Professional,#Scien4fic#&#Tech.#Wholesale#&#Retail#Trade#

Manufacturing#Fin.,#Insur.,#Real#Est.#&#Leasing#Transporta4on#&#Warehousing#

Other#Accomm.#&#Food/Arts#&#Ent.#

Health#Care#&#Social#Assistance#Overall#

Percentage)of)companies)with)vacant)posi3ons)that)needed)to)be)filled)at)3me)of)survey)

Q3#2015# Q3#2014#

Industry# of Vacant Positions

Accommodation & Food Services/Arts & Entertainment 41Health Care & Social Assistance 16Finance, Insurance, Real Estate & Leasing 23Other 25Transportation & Warehousing 35Manufacturing 33Wholesale & Retail Trade 15Professional, Scientific & Technical Services 18Mining & Oil & Gas 21Construction 31Total 258Vacancy rate is the number of vacant positions divided by all positions (vacant plus occupied)

Q3 2014

Vacancy Rate

# of Vacant Positions

6.0% 293.1% 234.8% 155.9% 126.8% 116.2% 93.3% 53.9% 43.4% 26.2% 05.0% 110

Vacancy rate is the number of vacant positions divided by all positions (vacant plus occupied)

Q3 2014 Q3 2015

Vacancy Rate

6.3%3.9%2.7%2.6%2.6%1.9%1.1%1.0%0.4%0.0%2.2%

Q3 2015


65 EMPLOYER SURVEY

Comments

‣ “We employ a lot of kids. The positions that take longer to fill are permanent full time positions.” - Accommodation & Food Services/Arts & Entertainment

‣ “We are always looking for chefs and restaurant managers.” - Accommodation & Food Services/Arts & Entertainment

‣ “Yes we have vacant positions, but no we're not filling them.” - Manufacturing

‣ “Yes, but we’re not filling them.” - Other

‣ “We are always recruiting for drivers as needed.” - Transportation & Warehousing

‣ “Right now we're still short staffed. We could use at least another five drivers.” - Transportation & Warehousing

‣ “We are always looking for salespeople and journeymen technicians.” - Wholesale & Retail Trade

‣ “We are always looking for cashiers.” - Wholesale & Retail Trade

On balance, 3 per cent of the employers anticipate employment in their company will increase over the next three months.Once any current vacant positions are filled, 13 per cent of the employers anticipate employment in their company will increase over the next three months, 10 per cent anticipate employment will decrease, and 77 per cent anticipate employment will stay the same, for a positive balance of 3 per cent.139 This is down significantly from the Q3 2014 results when 19 per cent of the employers on balance anticipated employment would increase.

Employers from the ‘other’ industry140 are the most positive about future employment levels. On balance, 20 per cent of the employers in this industry anticipate an increase in employment in the next three months. In addition, 15 per cent of the health care and social assistance and accommodation and food services/arts and entertainment employers on balance anticipate an increase in employment. In contrast, 20 per cent of the construction employers on balance anticipate employment will decrease over the next three months, significantly more pessimistic when compared to the previous year’s

19%$

3%$

&15%$

&5%$

5%$

15%$

25%$

Q3$2014$ Q3$2015$

Do#you#an(cipate#employment#will#increase,##decrease#or#stay#the#same#in#the#next#3#months?#

Increase$ Decrease$ Balance$


139 Percentage of employers that anticipate employment in their company will increase in the next three months minus the percentage of employers that anticipate employment will decrease.

140 ‘Other’ represents companies in any of the following industries: agriculture, utilities, information & culture,management of companies, administrative & support services, educational services, other services or public administration.

66 EMPLOYER SURVEY

results. Professional, scientific and technical services employers were neutral on balance, with 10 per cent anticipating an employment increase and 10 per cent anticipating an employment decrease.Future EmploymentPercentage of companies that anticipated an increase or decrease in total employment in the 3 months following their survey

Increase Decrease Balance Increase Decrease BalanceOverall Results 23% 4% 19% 13% 10% 3%

Results by IndustryMining & Oil & Gas 15% 10% 5% 0% 10% -10%Construction 45% 0% 45% 5% 25% -20%Manufacturing 20% 0% 20% 20% 10% 10%Wholesale & Retail Trade 10% 10% 0% 15% 20% -5%Transportation & Warehousing 40% 0% 40% 20% 10% 10%Professional, Scientific & Technical Services 20% 5% 15% 10% 10% 0%Health Care & Social Assistance 10% 0% 10% 15% 0% 15%Accommodation & Food Services/Arts & Entertainment 14% 19% -5% 25% 10% 15%Finance, Insurance, Real Estate & Leasing 20% 0% 20% 0% 5% -5%Other 40% 0% 40% 20% 0% 20%

Q3 2014 Q3 2015

Overall, employers anticipate employment will decrease by a net 36 people in the three months following their survey. Accommodation and food services/arts and entertainment employers anticipate a net increase of 18 people and health care and social assistance and transportation and warehousing employers anticipate a net increase of 12 people. Employers in the construction industry anticipate a net decrease of about 70 people in the three months following their survey.

Comments‣ “We will increase in the middle of September when our busy season starts up again.” -

Accommodation & Food Services/Arts & Entertainment

‣ “We are choosing not to fill some positions.” - Accommodation & Food Services/Arts & Entertainment

‣ “We usually get rid of 30 people in fall, but depending on winter contracts some of those people may stay on a part-time basis.” - Construction

Industry Increase #

Decrease # Net #

Accommodation & Food Services/Arts & Entertainment 34 16 18Health Care & Social Assistance 12 0 12Transportation & Warehousing 24 12 12Other 7 0 7Manufacturing 8 2 6Finance, Insurance, Real Estate & Leasing 0 2 -2Wholesale & Retail Trade 6 8 -2Mining & Oil & Gas 0 3 -3Professional, Scientific & Technical Services 3 18 -15Construction 20 89 -69Total 114 150 -36

Anticipated change in employment over the next three months


67 EMPLOYER SURVEY

‣ “We will be laying the majority of our people off once the snow flies.” - Construction

‣ “That will depend. We're applying for work share and if we can't get on that we will be laying off some people.” - Manufacturing

‣ “We will be increasing the number of kids at our day care centre, so we will need to hire a few more staff.” - Other

‣ “We will decrease by around 30%.” - Professional, Scientific & Technical Services

‣ “We don't have much scheduled permanent work coming up, so we won't be hiring.” - Transportation & Warehousing

‣ “We're at a lull so we're not hiring anybody per se, unless they can fill a new capacity and have the proper licensing to operate our equipment.” - Transportation & Warehousing

‣ “We will increase for the winter by at least 15 to 20 seasonal staff.” - Transportation & Warehousing

‣ “We will be laying off 10% of our staff.” - Wholesale & Retail Trade

Recruitment ResourcesEighty-six per cent of the employers use word of mouth/employee referrals to find applicants. Employers were asked to identify all of the resources they use to find applicants. The top resources employers use are word of mouth/employee referrals (86 per cent), career and classified websites (67 per cent), company website/internal postings (60 per cent) and walk-ins/unsolicited resumes (58 per cent). About one-third of the employers said they use social media as a resource, up from 26 per cent in the third quarter of 2014. Nine per cent of the employers mentioned they use Alberta Works/employment resource centres.

2%#3%#3%#6%#9%#11%#11%#13%#16%#

24%#34%#35%#36%#

58%#60%#

67%#86%#

0%# 20%# 40%# 60%# 80%# 100%#

Other#Radio#

Magazines#High#schools#

Alberta#Works/emp.#resource#centres#Technical/trade#insItutes#

Job#fairs#Signage#

Colleges/universiIes#Newspapers#Social#media#

Employment#agencies#Industry#associaIons#

WalkTins/unsolicited#resumes#Company#website/internal#posIngs#

Career#and#classified#websites#Word#of#mouth/employee#referrals#

Resources(used(to(find(applicants(


68 EMPLOYER SURVEY

However, word of mouth/employee referrals were the most successful resources over the last 12 months.Employers were then asked to specify the resource that was the most successful over the last 12 months. Of all the resources mentioned, word of mouth/employee referrals were the most successful, reported by 35 per cent of the employers, followed by career and classified websites (27 per cent). While 60 per cent of the employers reported they use company website/internals postings as a resource to find applicants, only 8 per cent said it was the most successful over the last year.Comments‣ “We also post at the local library and supermarkets.” - Accommodation & Food Services/Arts &

Entertainment

‣ “The Calgary Sun ads bring in the most applicants.” - Accommodation & Food Services/Arts & Entertainment

‣ “Job Bank is the most effective for housekeeping positions.” - Accommodation & Food Services/Arts & Entertainment

‣ “We recruit at student groups in Vancouver and Montreal. We try to hire locally for what we can get. We hire temporary foreign workers and that was the most successful resource for us, but that might be a thing of the past.” - Accommodation & Food Services/Arts & Entertainment

‣ “I'm a member of the Alberta Outfitters Association and I go to high schools to promote their scholarship. I have advertisements for our horseback holidays on the website and in magazines and brochures. People tend to find me through those resources and apply to work here. We get stacks of resumes starting in February from people wanting to be wranglers because there aren't that many of us.” - Accommodation & Food Services/Arts & Entertainment

‣ “The Cochrane job fair is the best.” - Construction

‣ “We use social media more than anything else. We don’t even go to job fairs anymore.” - Finance, Insurance, Real Estate & Leasing

‣ “Placement agencies within the dental colleges are the most effective.” - Health Care & Social Assistance

‣ “It’s probably Charity Village that works best for us.” - Health Care & Social Assistance

‣ “We will post jobs with Native Networks and Calgary Urban Aboriginal Initiative.” - Health Care & Social Assistance

1%#1%#1%#1%#1%#2%#2%#3%#3%#3%#4%#5%#

8%#9%#

27%#35%#

0%# 10%# 20%# 30%# 40%#

Unsure#None#Radio#

Magazines#Job#fairs#

Colleges/universiBes#Technical/trade#insBtutes#

Social#media#Signage#

Industry#associaBons#WalkMins/unsolicited#resumes#

Newspapers#Company#website/internal#posBngs#

Employment#agencies#Career#and#classified#websites#

Word#of#mouth/employee#referrals#

Most%successful%resource%over%last%12%months%


69 EMPLOYER SURVEY

‣ “We're always letting the students know that we're here and letting them tour our company because they're our future.” - Professional, Scientific & Technical Services

‣ “Honestly, word of mouth is the best. The thing is that you can't find anybody anymore that is qualified because nobody wants to work. It's not a very positive situation. Employment agencies, I haven't heard good things about them when it comes to recruiting truck drivers.” - Transportation & Warehousing

Recruiting DifficultiesThirty-five per cent the employers reported having difficulty recruiting qualified employees.Overall, 35 per cent of the employers said they had difficulty recruiting qualified employees in the 12 months prior to their survey, down from 48 per cent in the third quarter of 2014. Seventy per cent of the accommodation and food services/arts and entertainment employers had difficulty recruiting qualified employees, compared to only 10 per cent of the finance, insurance, real estate and leasing and mining and oil and gas employers.

The 70 employers that reported having difficulty recruiting were also asked to specify the occupations that were the most difficult to fill. Truck drivers was the top occupation, reported by 10 per cent of the employers, followed by community and social service workers, food counter attendants and kitchen helpers, early childhood educators and assistants, technical sales specialists - wholesale trade and hotel front desk clerks (4 per cent each).

10%$10%$

20%$25%$

35%$40%$

45%$45%$

50%$70%$

35%$

0%$ 20%$ 40%$ 60%$ 80%$

Mining$&$Oil$&$Gas$Fin.,$Insur.,$Real$Est.$&$Leasing$

ConstrucDon$Manufacturing$

Other$Professional,$ScienDfic$&$Tech.$TransportaDon$&$Warehousing$Health$Care$&$Social$Assistance$

Wholesale$&$Retail$Trade$Accomm.$&$Food/Arts$&$Ent.$

Overall$

Percentage)of)companies)that)had)difficulty)recrui6ng)in)the)12)months)prior)to)survey)

Q3$2015$ Q3$2014$

NOC Code Occupation Employers %

7511 Truck drivers 10%4212 Community and social service workers 4%6711 Food counter attendants, kitchen helpers and related occupations 4%4214 Early childhood educators and assistants 4%6221 Technical sales specialists - wholesale trade 4%6525 Hotel front desk clerks 4%6322 Cooks 3%6411 Sales representatives - wholesale trade (non-technical) 3%6733 Janitors, caretakers and building superintendents 3%7312 Heavy-duty equipment mechanics 3%6722 Operators and attendants in amusement, recreation and sport 3%6311 Food service supervisors 3%1414 Receptionists and switchboard operators 3%

Note: 70 employers reported having difficulty recruiting qualified employees.

What occupations have been the most difficult to fill?

Only occupations with a response of 3 per cent or more are shown in the table.


70 EMPLOYER SURVEY

Comments‣ “We're in a small town, so that makes recruiting difficult.” - Accommodation & Food Services/Arts

& Entertainment

‣ “Recruiting has been difficult for the past 20 years. It's an industry where it's hard to get qualified, good workers.” - Accommodation & Food Services/Arts & Entertainment

‣ “I've had the same staff for the last 4 years.” - Accommodation & Food Services/Arts & Entertainment

‣ “This is the first year in I don't know how long that it hasn't been complicated to recruit. The slowdown in the oil industry has been helping us out.” - Construction

‣ “You're talking about a province that's currently in a recession. There’s no shortage of people looking for a job. We have engineers coming here to do grunt work. We have so many people applying, most of whom are overqualified but have never done what we do here.” - Construction

‣ “We have difficulty because we're manufacturing footwear and we need people with those types of skills.” - Manufacturing

‣ “We've had trouble finding qualified experienced people for the last 36 months.” - Transportation & Warehousing

‣ “People come to me and ask to work here.” - Wholesale & Retail Trade

Employers have responded to the difficulty finding qualified employees in a variety of ways. Of the 70 employers that reported having difficulty recruiting qualified employees, 71 per cent increased recruiting efforts and 43 per cent either increased the workload for current workers or did not fill the job opening. Fourteen per cent of the 70 employers applied for or hired temporary foreign workers.

Response to hiring difficulties Employers %

Increased recruiting efforts 71%Increased workload for current workers 43%Did not fill the job opening 43%Hired contingent workers, including temps, contractors and freelancers 21%Increased investment in training provided by in-house staff 21%Hired a less qualified applicant 20%Targeted underutilized or new talent pools * 19%Applied for/hired temporary foreign workers 14%Redeployed employees to new roles where their skills were more needed 9%Increased investment in training provided by a third-party 6%Redesigned the job to change the required skills 4%Started actively hiring out of province/country 3%Inceased networking opportunities 3%Outsourced the work 3%Started recruiting in other industry sectors 1%Applied for a Canada-Alberta Job Grant 1%Partnered with educational institutions to ensure programs develop candidates with the right skills 1%Increased wages/benefits to attract more applicants 1%Nothing 9%Note: 70 employers reported having difficulty recruiting qualified employees.* Mature workers, stay at home parents, persons with disabilities, Aboriginal peoples, etc.

How has your company responded to the difficulty recruiting qualified employees?


71 EMPLOYER SURVEY

Comments‣ “We have had to go to middle range candidates if we don't have high range candidates. We train and

groom them to where we would like to see them.” - Accommodation & Food Services/Arts & Entertainment

‣ “I just keep hiring and try them out to see if they show up. It's easy to get people in the door, but as we're hiring we find out they don't want to be accountable or present. The lack of interest and commitment is actually highest not with young kids but with people between the ages of 20 and 30 years old. I have received three positive LMIAs but not work permits yet for two of them. The only way to get qualified full time employees is through the program.” - Accommodation & Food Services/Arts & Entertainment

‣ “Our difficulties finding qualified candidates has resulted in a significant amount of training.” - Accommodation & Food Services/Arts & Entertainment

‣ “We ask our employees to work more overtime to make up for the shortage of workers.” - Accommodation & Food Services/Arts & Entertainment

‣ “We've utilized internal promotions.” - Finance, Insurance, Real Estate & Leasing

‣ “We would take people without dental experience and train them or move people from other areas of our office to those areas.” - Health Care & Social Assistance

‣ “We focus more on finding people with a recreation background now.” - Health Care & Social Assistance

‣ “We train them from within.” - Manufacturing

‣ “We had to go find our Senior Business Analyst in the US. We're still having difficulty finding a part time person because many people don't want the reduced hours and the candidates we are getting have a language barrier unfortunately.” - Other

‣ “We advertised around the world. We have people who go overseas to recruit and who work overseas on assignment.” - Other

‣ “We have a novice program to train drivers with 0 to 24 months commercial driving experience.” - Transportation & Warehousing

‣ “We are thinking about recruiting from other sectors and making use of new people.” - Transportation & Warehousing

‣ “We just raise our ETAs (estimated time of arrival) and have longer service hours.” - Transportation & Warehousing


72 EMPLOYER SURVEY

On balance, 20 per cent of the employers anticipate they will have less difficulty recruiting qualified employees over the next 12 months.Seven per cent of the employers anticipate they will have more difficulty recruiting qualified employees in the 12 months following their survey, 27 per cent anticipate they will have less difficulty and 66 per cent anticipate they will have about the same difficulty, for a balance of -20 per cent.141

In Q3 2014, 11 per cent of the employers on balance anticipated they would have more difficulty recruiting qualified employees.

Employers in all of the industries, with the exception of professional, scientific and technical services and accommodation and food services/arts and entertainment, anticipate they will have less difficulty recruiting in the next 12 months, led by construction (-40 per cent) and health care and social assistance (-35 per cent). Ten per cent of the accommodation and food services/arts and entertainment employers on balance anticipate they will have more difficulty recruiting qualified employees in the next year, while professional, scientific and technical services employers are neutral on balance.Future Recruiting DifficultiesPercentage of companies that anticipated having more or less difficulty recruiting qualified employees in the 12 months following their survey

More Less Balance More Less BalanceOverall Results 15% 4% 11% 7% 27% -20%

Results by IndustryMining & Oil & Gas 0% 5% -5% 5% 20% -15%Construction 5% 5% 0% 0% 40% -40%Manufacturing 25% 0% 25% 5% 35% -30%Wholesale & Retail Trade 10% 5% 5% 5% 30% -25%Transportation & Warehousing 20% 0% 20% 10% 30% -20%Professional, Scientific & Technical Services 15% 5% 10% 10% 10% 0%Health Care & Social Assistance 10% 15% -5% 5% 40% -35%Accommodation & Food Services/Arts & Entertainment 24% 0% 24% 20% 10% 10%Finance, Insurance, Real Estate & Leasing 15% 0% 15% 0% 30% -30%Other 25% 5% 20% 10% 25% -15%

Q3 2014 Q3 2015

Comments‣ “I've had absolutely wonderful staff every season. There's always someone who doesn't work out, but

I've had some people with me for over 20 years.” - Accommodation & Food Services/Arts & Entertainment

11%#

$20%#

$30%#

$20%#

$10%#

0%#

10%#

20%#

Q3#2014# Q3#2015#

Do#you#an(cipate#having#more,#less#or#the#same#difficulty#recrui(ng#qualified#employees#in#the#

next#12#months?#More# Less# Balance#


141 Percentage of employers that anticipate having more difficulty recruiting qualified employees in the 12 months following their survey minus the percentage of employers that anticipate having less difficulty.

73 EMPLOYER SURVEY

‣ “We are hoping it will be easier with the economy and more people are looking for jobs, but so far that hasn't really improved our recruitment especially our ability to find qualified people.” - Health Care & Social Assistance

‣ “We won't be hiring in the foreseeable future.” - Manufacturing

‣ “We're in a tourist town, so hiring has always been challenge with a lot more people moving in and out. In addition, housing in Banff is becoming a problem so there are less people coming here permanently.” - Other

‣ “It could be difficult because of our own situation. Our company is going through hardship, so it's difficult for a designer to consider our company because it doesn't immediately add to their portfolio. However, for a student who applies it would be a great opportunity.” - Professional, Scientific & Technical Services

Employee TurnoverSixty-two per cent of the employers reported employees had voluntarily left their company in the prior year.Overall, 62 per cent of the employers reported employees had left their company in the 12 months prior to their survey as a result of voluntary turnover,142 relatively unchanged from Q3 2014.

Three-quarters of the construction employers and 70 per cent of the health care and social assistance and finance, insurance, real estate and leasing employers said employees had voluntarily left in the prior year, compared to half of the ‘other’ employers and 55 per cent of the mining and oil and gas employers.

Overall, the turnover rate was 10 per cent.Employers reported approximately 490 employees left their companies in the 12 months prior to their survey as a result of voluntary turnover. This equates to a turnover rate143 of 10 per cent, unchanged from the third quarter of 2014.

50%$55%$60%$60%$60%$60%$60%$

70%$70%$75%$

62%$

0%$ 20%$ 40%$ 60%$ 80%$ 100%$

Other$Mining$&$Oil$&$Gas$

Professional,$Scien?fic$&$Tech.$Accomm.$&$Food/Arts$&$Ent.$

Manufacturing$Wholesale$&$Retail$Trade$

Transporta?on$&$Warehousing$Fin.,$Insur.,$Real$Est.$&$Leasing$Health$Care$&$Social$Assistance$

Construc?on$Overall$

Percentage)of)companies)with)voluntary)turnover)in)the)12)months)prior)to)survey)

Q3$2015$ Q3$2014$


142 Initiated by the employee, not including retirement or maternity leave.

143 Total turnover divided by total employees.

74 EMPLOYER SURVEY

The accommodation and food services/arts and entertainment industry had the highest turnover rate on average at 23 per cent, up from 12 per cent the previous year. In contrast, the ‘other’, finance, insurance, real estate and leasing and manufacturing (7 per cent each) and mining and oil and gas industries (5 per cent) had the lowest employee turnover rates in the third quarter of 2015.

Employers were also asked to specify the occupations that experienced the most voluntary turnover. Truck drivers and community and social service workers were the top occupations mentioned by 7 per cent and 6 per cent of the employers respectively.

5%#7%#7%#7%#

9%#10%#

11%#12%#

13%#23%#

10%#

0%# 5%# 10%# 15%# 20%# 25%#

Mining#&#Oil#&#Gas#Manufacturing#

Fin.,#Insur.,#Real#Est.#&#Leasing#Other#

Professional,#ScienEfic#&#Tech.#ConstrucEon#

TransportaEon#&#Warehousing#Wholesale#&#Retail#Trade#

Health#Care#&#Social#Assistance#Accomm.#&#Food/Arts#&#Ent.#

Overall#

Employee(turnover(rates(Q3#2015# Q3#2014#

NOC Code Occupation Employers %

7511 Truck drivers 7%4212 Community and social service workers 6%6231 Insurance agents and brokers 3%6411 Sales representatives - wholesale trade (non-technical) 3%6421 Retail salespersons 3%7611 Construction trades helpers and labourers 3%1111 Financial auditors and accountants 2%1224 Property administrators 2%6711 Food counter attendants, kitchen helpers and related occupations 2%6731 Light duty cleaners 2%8612 Landscaping and grounds maintenance labourers 2%8222 Supervisors, oil and gas drilling and service 2%1414 Receptionists and switchboard operators 2%1221 Administrative officers 2%1241 Secretaries (except legal and medical) 2%2171 Information systems analysts and consultants 2%4214 Early childhood educators and assistants 2%6513 Food and beverage servers 2%9612 Labourers in metal fabrication 2%6221 Technical sales specialists - wholesale trade 2%2271 Air pilots, flight engineers and flying instructors 2%7441 Residential and commercial installers and servicers 2%4152 Social workers 2%1411 General office support workers 2%7237 Welders and related machine operators 2%

Only occupations with a response of 2 per cent or more are shown in the table.

What occupations have experienced the most voluntary turnover?

Note: 124 employers reported employees had left their company in the previous 12 months as a result of voluntary turnover.


75 EMPLOYER SURVEY

Comments‣ “We have a lot of housekeepers who turnover. I would say 15 to 20 a year.” - Accommodation &

Food Services/Arts & Entertainment

‣ “We experience turnover mainly with our entry level support worker positions.” - Health Care & Social Assistance

‣ “Since January 1, we have lost 16 employees to voluntary turnover. The turnover is all over, from managers right down to admin staff.” - Health Care & Social Assistance

‣ “Many people use us as a stepping stone to move on to EMS or different paramedicine professions or go back to school to become nurses.” - Health Care & Social Assistance

‣ “We have had 20 employees resign from their positions over the duration of one year from June 30, 2014 to June 30, 2015.” - Transportation & Warehousing

‣ “Three people quit before being fired last fall.” - Transportation & Warehousing

‣ “We have lost 25 people at least.” - Wholesale & Retail Trade

‣ “We employ a lot of young people, so there's always turnover.” - Wholesale & Retail Trade

On balance, 14 per cent of the employers anticipate employee turnover will be lower over the next year.Four per cent of the employers anticipate voluntary employee turnover will be higher in the 12 months following their survey and 18 per cent anticipate it will be lower, for a balance of 14 per cent anticipating turnover will be lower.144 In Q3 2014, 7 per cent of the employers on balance anticipated turnover would be lower in the year following their survey.

Thirty-five per cent of the health care and social assistance employers and 20 per cent of the construction, manufacturing and professional, scientific and technical services employers on balance anticipate employee turnover in their company will be lower in the next year. Five per cent of the accommodation and food services/arts and entertainment employers anticipate turnover will be higher.

!7%$

!14%$

!20%$

!15%$

!10%$

!5%$

0%$

5%$

10%$

Q3$2014$ Q3$2015$

Do#you#an(cipate#employee#turnover#will#be#higher#or#lower#in#the#next#12#months?#

Higher$ Lower$ Balance$


144 Percentage of employers that anticipated voluntary turnover would be higher in the 12 months following their survey minus the percentage of employers that anticipated voluntary turnover would be lower.

76 EMPLOYER SURVEY

Future TurnoverPercentage of companies that anticipated employee turnover would be higher or lower in the 12 months following their survey

Higher Lower Balance Higher Lower BalanceOverall Results 6% 13% -7% 4% 18% -14%

Results by IndustryMining & Oil & Gas 0% 0% 0% 0% 15% -15%Construction 10% 5% 5% 0% 20% -20%Manufacturing 5% 15% -10% 0% 20% -20%Wholesale & Retail Trade 5% 10% -5% 10% 20% -10%Transportation & Warehousing 5% 15% -10% 10% 15% -5%Professional, Scientific & Technical Services 0% 30% -30% 0% 20% -20%Health Care & Social Assistance 15% 10% 5% 0% 35% -35%Accommodation & Food Services/Arts & Entertainment 14% 0% 14% 10% 5% 5%Finance, Insurance, Real Estate & Leasing 0% 15% -15% 10% 15% -5%Other 5% 30% -25% 0% 15% -15%

Q3 2014 Q3 2015

Comments‣ “We do hire a lot of high school and university students. They use this as gas and book and party

money, and then move on to their careers related to their degrees and diplomas. We're not victimized by economic cycle, but the nature of the recreation business is often younger workers.” - Accommodation & Food Services/Arts & Entertainment

‣ “No one is quitting because they're worried about their jobs. If there is turnover it will be due to layoffs, the economy and royalty reviews.” - Mining & Oil & Gas

‣ “Lower because we're going into one of our busier seasons.” - Wholesale & Retail Trade

RetentionThe top successful retention strategy over the last 12 months was providing a competitive salary.Employers were asked to indicate an employee retention strategy that was the most successful over the last 12 months. The top successful strategies were providing a competitive salary (15 per cent) and a positive work environment (14 per cent).Two per cent of the employers said nothing was successful in retaining employees and 13 per cent were unsure.

13%$1%$1%$1%$1%$2%$2%$2%$2%$2%$2%$3%$

5%$5%$6%$

7%$8%$8%$8%$

14%$15%$

0%$ 5%$ 10%$ 15%$ 20%$

Unsure$Onboarding/recruitment$process$Reward$and$recogni@on$programs$

Excellent$communica@on$Cash$Bonuses$

Longevity$of$employees$Work$loca@on$

Other$Nothing$

Employee$engagement$Work/life$balance$

Learning/growth$opportuni@es$Perks$

Interes@ng/challenging$work$Company$culture$

Job$security$Flexible$work$measures$

Excellent$management/supervision$Compe@@ve$benefits$

Posi@ve$work$environment$Compe@@ve$salary$

Most%successful%employee%reten0on%strategy%


77 EMPLOYER SURVEY

Comments‣ “One of the best things about working here is that we are in a small town. The place is not that big so

the people who live here and want to work here don't need transportation to get here.” - Accommodation & Food Services/Arts & Entertainment

‣ “The temporary foreign worker program.” - Accommodation & Food Services/Arts & Entertainment

‣ “We have a one of a kind owner here. He's all about integrity.” - Construction

‣ “We have a pretty flexible culture here. We're very much of the belief that as long as you get your work done you can do so on your own terms.” - Construction

‣ “We have an excellent training program so that's a big part of it. As well, flexibility around parenting support is a huge retention piece.” - Health Care & Social Assistance

‣ “Most of the people who work here have been here for 15 to 20 years. They like their job.” - Manufacturing

‣ “Before, I would say it was the level of pay. Now, it's just about having a job.” - Mining & Oil & Gas

‣ “We have quarterly checkins where the manager and employer keep people on track with their future goals.” - Mining & Oil & Gas

‣ “People are able to volunteer for unpaid time off.” - Professional, Scientific & Technical Services

‣ “Our retention strategy is tied to employee engagement and enablement. New employee check ins, annual reviews and regular feedback and coaching from employee's supervisor are some of the focuses of our strategy. We conducted surveys in 2012 and 2014 to benchmark the progress we've made and overall have seen improvement.” - Transportation & Warehousing

‣ “Probably access to use the demo products like our snowmobiles, sea-doos and bikes.” - Wholesale & Retail Trade

‣ “That we work Monday to Friday and have work everyday.” - Wholesale & Retail Trade

‣ “Most of our employees are here on working holiday visas. They're willing to spend their own money to stay in Banff. Without that program, this business won't run. Frankly, the changes being made to the program are terrifying for all of us employers here.” - Wholesale & Retail Trade


78 EMPLOYER SURVEY

Fourteen per cent of the employers anticipate they will be focusing more on employee retention over the next year.Seventeen per cent of the employers anticipate they will be focusing more on employee retention over the next year, 3 per cent anticipate they will be focusing less and 80 per cent anticipate they will be focusing about the same, for a positive balance of 14 per cent.145 This is down from the third quarter of 2014 when 23 per cent of the employers said they would be focusing more on employee retention. Thirty per cent of the ‘other’ employers and one quarter of the accommodation and food services/arts and entertainment employers anticipate they will be focusing more on employee retention over the next year. Five per cent of the mining and oil and gas employers on balance anticipate they will be focusing less on employee retention.Future RetentionPercentage of companies that anticipated they would be focusing more or less on employee retentionin the 12 months following their survey

More Less Balance More Less BalanceOverall Results 23% 0% 23% 17% 3% 14%

Results by IndustryMining & Oil & Gas 10% 0% 10% 5% 10% -5%Construction 25% 0% 25% 5% 5% 0%Manufacturing 30% 0% 30% 15% 0% 15%Wholesale & Retail Trade 25% 0% 25% 10% 0% 10%Transportation & Warehousing 15% 0% 15% 20% 5% 15%Professional, Scientific & Technical Services 15% 0% 15% 20% 0% 20%Health Care & Social Assistance 50% 0% 50% 25% 5% 20%Accommodation & Food Services/Arts & Entertainment 19% 0% 19% 25% 0% 25%Finance, Insurance, Real Estate & Leasing 10% 0% 10% 10% 0% 10%Other 35% 0% 35% 30% 0% 30%

Q3 2014 Q3 2015

Comments‣ “We will be upgrading our benefits plan.” - Accommodation & Food Services/Arts & Entertainment

‣ “We will offer more employee engagement options.” - Health Care & Social Assistance

‣ “We don't really see any changes in terms of increasing business or retention. That focus has kind of plateaued or even decreased in the last few years.” - Health Care & Social Assistance

‣ “We haven't had to worry about retention honestly. Once they come, they stay.” - Transportation & Warehousing

23%$

14%$

'5%$

0%$

5%$

10%$

15%$

20%$

25%$

Q3$2014$ Q3$2015$

Do#you#an(cipate#focusing#more,#less#or#the#same#on#employee#reten(on#in#the#next#12#months?#

More$ Less$ Balance$


145 Percentage of employers that anticipate they will be focusing more on employee retention in the 12 months following their survey minus the percentage of employers that anticipate they will be focusing less.

79 EMPLOYER SURVEY

Supplemental Questions - Focus on Employee Training and DevelopmentIn addition to the general questions about recruitment and retention practices, employers were asked the following specific questions about their training and development practices:

‣ On a scale of 1 to 5 with 1 being strongly disagree and 5 being strongly agree, please evaluate the following statement: Employee training and development is a top priority in our company.

‣ Does your company currently have a budget specifically for employee training and development? If yes, do you anticipate you will be spending more, less or the same on employee training and development in your next budget.

‣ What is the biggest challenge your company faces in terms of training employees?

‣ In terms of learning content, which of the following areas does your company either provide training or pay for training? (Employers were given a list).

Seventy-two per cent of the employers agree that employee training and development is a top priority in their company.Thirty-two per cent of the employers strongly agree that employee training and development is a top priority in their company, while 40 per cent of the employers agree. Only 7 per cent of the employers disagree.

Employee training and development is a top priority in our company

Strongly)Disagree)

2%)

Disagree)5%)

Neutral)21%)

Agree)40%)

Strongly)Agree)32%)

72%)


80 EMPLOYER SURVEY

All of the accommodation and food services/arts and entertainment employers and 90 per cent of the health care and social assistance employers agree that employee training and development is a top priority in their company. In contrast, only 55 per cent of the manufacturing employers and half of the wholesale and retail trade employers agree.

Just under half of the employers have a budget specifically for employee training and development.Forty-five per cent of the employers said they currently have a budget specifically for employee training and development, 53 per cent said they do not, and 2 per cent were unsure. Three-quarters of the finance, insurance, real estate and leasing and accommodation and food services/arts and entertainment employers reported they have a budget specifically for training and development. In contrast, only 20 per cent of the manufacturing employers and 15 per cent of the professional, scientific and technical services employers said they have a specific training and development budget.

Does your company currently have a budget specifically foremployee training and development?

30%$30%$

5%$35%$

25%$25%$35%$40%$50%$

40%$

20%$25%$

55%$30%$

40%$50%$40%$35%$

40%$60%$

0%$ 20%$ 40%$ 60%$ 80%$ 100%$

Wholesale$&$Retail$Trade$Manufacturing$Construc@on$

Transporta@on$&$Warehousing$Professional,$Scien@fic$&$Tech.$

Mining$&$Oil$&$Gas$Other$

Fin.,$Insur.,$Real$Est.$&$Leasing$Health$Care$&$Social$Assistance$Accomm.$&$Food/Arts$&$Ent.$

Employee(training(and(development(is((a(top(priority(in(our(company(

Strongly$Agree$ Agree$

15%$20%$30%$30%$

45%$45%$55%$60%$

75%$75%$

45%$

0%$ 10%$20%$30%$40%$50%$60%$70%$80%$90%$100%$

Professional,$Scien:fic$&$Tech.$Manufacturing$Construc:on$

Wholesale$&$Retail$Trade$Mining$&$Oil$&$Gas$

Other$Transporta:on$&$Warehousing$Health$Care$&$Social$Assistance$Accomm.$&$Food/Arts$&$Ent.$

Fin.,$Insur.,$Real$Est.$&$Leasing$Total$

Yes$ No$ Unsure$


81 EMPLOYER SURVEY

Comments‣ “It's important. I'm constantly training people on the safest way to tie and saddle a horse. Everyday

includes on the job training here.” - Accommodation & Food Services/Arts & Entertainment

‣ “We have a training schedule. Staff know when training is being offered and have the opportunity to access it.” - Health Care & Social Assistance

‣ “Each department has its own training budget.” - Health Care & Social Assistance

‣ “It's a major priority, but I wouldn't say top priority. There is a budget, but it has been cut significantly. Actually, all of our budgets took some cutbacks in 2015. We're hoping to re-establish our training budget in 2016.” - Other

‣ “We've always had a strong belief in training, but it costs money. There's no money for that right now.” - Professional, Scientific & Technical Services

‣ “The size of our training budget going forward depends on oil prices.” - Wholesale & Retail Trade

Six per cent of the employers on balance anticipate they will be spending more on employee training and development in their next budget.Of the 90 employers that have a budget specifically for training, 19 per cent anticipate they will be spending more on employee training and development in their next budget, 13 per cent anticipate they will be spending less, and 68 per cent anticipate they will be spending about the same, for positive balance of 6 per cent. About two-thirds of the professional, scientific and technical services employers anticipate they will be spending more. In contrast, 22 per cent of the mining and oil and gas employers, 18 per cent of the transportation and warehousing employers and 13 per cent of the finance, insurance, real estate and leasing employers anticipate they will be spending less on balance.Future Spending on Employee Training and DevelopmentPercentage of companies that anticipated they would be spending more or less on employee training and development in their next budget

More Less BalanceOverall Results 19% 13% 6%

Results by IndustryMining & Oil & Gas 22% 44% -22%Construction 33% 17% 17%Manufacturing 0% 0% 0%Wholesale & Retail Trade 17% 17% 0%Transportation & Warehousing 9% 27% -18%Professional, Scientific & Technical Services 67% 0% 67%Health Care & Social Assistance 17% 0% 17%Accommodation & Food Services/Arts & Entertainment 20% 0% 20%Finance, Insurance, Real Estate & Leasing 0% 13% -13%Other 44% 11% 33%

Q3 2015

Note: 90 employers currently have a budget specifically for employee training and development.


82 EMPLOYER SURVEY

Time constraints is the top challenge employers face in terms of training employees.Nineteen per cent of the employers said time constraints (too busy) is the biggest challenge they face when training employees. Too costly/not in budget and turnover (employees leave once trained) are the next biggest challenges, mentioned by 11 per cent of the employers. Another 9 per cent of the employers said employees aren’t interested in training.

Comments‣ “The resources that we have are lacking. We don't have the training materials such as video or online

that we would like. Our physical training and on the job training is fine, but the corporate training is lacking because we're a small location.” - Accommodation & Food Services/Arts & Entertainment

‣ “I think the biggest challenge is balancing the time employees are training versus their actual project work.” - Construction

‣ “We allocate a budget every year for employees and we leave it for most part up to each employee to determine how and when to spend it. We encourage them to go to training, but the majority never do spend their allotted yearly training amount.” - Construction

‣ “We use an accounting software system that is not well known in Canada. It's hard to find recruits that know it. The software company itself has a poor manual and the online training is haphazard.” - Finance, Insurance, Real Estate & Leasing

‣ “I would say time to get up to speed. We are training people at least 6 months until they know enough to be useful and we have to pay them while they’re training.” - Finance, Insurance, Real Estate & Leasing

‣ “Having enough opportunities for staff to attend training. Because we have a limited number of staff, we can only allow 1 or 2 to be freed up at a time to attend training sessions. That means it takes a lot

Biggest Challenge Employers %

Time constraints - too busy 19%Too costly/not in budget 11%Turnover - employees leave once trained 11%Employees aren't interested in training 9%Managing employees' diverse learning needs - knowing what training is relevant and available 8%The labour force is uneducated/unskilled 4%Employees don't need training - they are fully trained 4%The locations where employees work are not near the training 2%Lack of internal trainers to administer the training 2%Finding employees to train 2%English is a second language for many of our employees - language barrier 2%The length of training that is required 2%Administrative burden 1%Management is not interested in training 1%Unsure 10%None 16%

What is the biggest challenge your company faces in terms of training employees?


83 EMPLOYER SURVEY

longer to get everyone through training because we need our staff for the daily work schedule. We don't have extra people to fill their slots when they're away at training.” - Health Care & Social Assistance

‣ “Just getting programs that are relevant to what we do. Most of what we do is on the job training, but sometimes there are specific things we would like to access externally and it's hard to find those.” - Manufacturing

‣ “Finding courses or resources that are specific to the areas where we need the training. We're in a bit of a unique industry and sometimes we can't get the training we would like on a cost effective basis.” - Mining & Oil & Gas

‣ “Probably keeping up with technology.” - Professional, Scientific & Technical Services

‣ “Finding training that's fit for our purposes because one size doesn't fit all. We can't have one program for everybody. Our training needs to be individualized.” - Professional, Scientific & Technical Services

‣ “The biggest challenge is finding employees that are willing to work and learn. People think they know everything.” - Transportation & Warehousing

‣ “Actually having them do the training. We encourage it, but not everyone wants to do it. I would say those aged 50+ are less willing to undertake new training.” - Transportation & Warehousing

‣ “It's to get the experienced people to train the new people. Some of them have a hard time with it so it's getting them to show them what it's about, for example, how to lift properly and handle goods properly. In the warehouse that's the things I try to do first before putting them in the field. Then they get the more hands on training in the controlled warehouse environment and that's easier for them to learn than out in the field and on the street right away.” - Transportation & Warehousing

‣ “Access to appropriate training in this field. The only motorcycle school is in Fairview, Alberta, but for automotive there's a local program at SAIT. The cost of going for an eight week program out of the city means that our employees can't go.” - Wholesale & Retail Trade

Employers indicated they provide training or pay for training in a variety of areas.The top areas in which employers either provide training or pay for training are new employee orientation (65 per cent), occupational health and safety (54 per cent), professional and technical (53 per cent) and customer service/relations (51 per cent). About one-third of the employers either provide or pay for training in basic skills (numeracy/literacy).

32%$35%$35%$36%$37%$39%$40%$40%$44%$46%$

51%$53%$54%$

65%$

0%$ 20%$ 40%$ 60%$ 80%$

Basic$skills$4$numeracy/literacy$Execu?ve$development$

Interpersonal$skills$Product$knowledge$

Sales$Team$building$skills$

IT/computer$Quality$

Management$and$supervisory$skills$Equipment$

Customer$service/rela?ons$Professional$and$technical$

Occupa?onal$health$and$safety$New$employee$orienta?on$

In#which#of#the#following#areas#does#your#company#either#provide#training#or#pay#for#training?#


84 EMPLOYER SURVEY

Comments‣ “We spend a lot of time in our accounting area familiarizing our new hires with the software.” -

Finance, Insurance, Real Estate & Leasing

‣ “We hire people with no experience and train them in-house. They end up being licensed insurance brokers.” - Finance, Insurance, Real Estate & Leasing

‣ “We have a strong focus on training. We recently implemented a tuition policy up to $6,000 per employee that can cover any relevant training.” - Manufacturing

‣ “We have vendor training, partner training and regular training. That's all available and we use it all time.” - Other

‣ “We have leadership training, Safety Management System, TGD, WHMIS, Onboard computer log and trip sheet training, Fatigue Management Program, Road Training, HOS for drivers and payroll training for office.” - Transportation & Warehousing

Employers have responded to the difficulty recruiting qualified employees in the last 12 months by increasing investment in training.As discussed earlier, employers have responded to the difficulty recruiting qualified employees in a variety of ways. In terms of training, 21 per cent of the 70 employers reported they increased investment in in-house training, 6 per cent increased investment in third-party training, and 1 per cent applied for a Canada-Alberta Job Grant. The Canada-Alberta Job Grant offers funding toward the cost of training provided by eligible third-party trainers. The total cost of training is shared between the Government of Canada and employers.

Response to hiring difficulties Employers %

Increased recruiting efforts 71%Increased workload for current workers 43%Did not fill the job opening 43%Hired contingent workers, including temps, contractors and freelancers 21%Increased investment in training provided by in-house staff 21%Hired a less qualified applicant 20%Targeted underutilized or new talent pools * 19%Applied for/hired temporary foreign workers 14%Redeployed employees to new roles where their skills were more needed 9%Increased investment in training provided by a third-party 6%Redesigned the job to change the required skills 4%Started actively hiring out of province/country 3%Inceased networking opportunities 3%Outsourced the work 3%Started recruiting in other industry sectors 1%Applied for a Canada-Alberta Job Grant 1%Partnered with educational institutions to ensure programs develop candidates with the right skills 1%Increased wages/benefits to attract more applicants 1%Nothing 9%Note: 70 employers reported having difficulty recruiting qualified employees.* Mature workers, stay at home parents, persons with disabilities, Aboriginal peoples, etc.

How has your company responded to the difficulty recruiting qualified employees?


85 EMPLOYER SURVEY

Canada-Alberta Job GrantAll 200 employers were asked if they have ever applied for or received or have plans to apply for a Canada-Alberta Job Grant, regardless of whether or not they had difficulty recruiting qualified employees in the last 12 months. Seven per cent of the employers reported they have applied for a grant in the past, or have plans to apply, 91 per cent said they have not applied or have no plans to and 2 per cent were unsure.

Of the 91 per cent (183 employers) that have never applied for or do not have plans to apply for a Canada-Alberta Job Grant, 43 per cent said they have never heard of it and 8 per cent said they don’t know much about it. About one-quarter of the employers said their training needs are already taken care of and 11 per cent said it is not a decision they can make (management/head office decision). In addition, 9 per cent of the employers said they don’t need to train or they believe applying for a Job Grant is too much of an administrative burden.Comments‣ “I dislike the grant. I think it's a bad thing. The government should know that it can't just create jobs.

Jobs have to evolve. If it's needed in the marketplace, that job will emerge.” - Construction

‣ “We don't have the budget to take on more training because we're downsizing.” - Finance, Insurance, Real Estate & Leasing

‣ “I just haven't had chance to research it. I do have information on it.” - Finance, Insurance, Real Estate & Leasing

‣ “We are trying as hard as we can but it's very difficult to apply for that because the criteria is so prohibitive.” - Finance, Insurance, Real Estate & Leasing

‣ “I've heard of it but I'm not familiar with it. We're a small non-profit, so we would be very interested in applying.” - Health Care & Social Assistance

‣ “I don't know anything about it. I wonder if that's something we could apply for.” - Manufacturing

2%#1%#2%#

7%#7%#8%#9%#9%#

11%#23%#

43%#

0%# 10%# 20%# 30%# 40%# 50%#

No#reason/unsure#Not#hiring#at#this#9me#

Other#Don't#have#the#budget#for#training/too#costly#

Don't#think#we#qualify#Don't#know#much#about#it#

Administra9ve#burden#Don't#need#to#train#

Management/head#office#decision#Training#needs#are#already#taken#care#of#

Never#heard#of#it#

Reasons'company'has'never'applied'for'or'has'no'plans'to''apply'for'a'Canada5Alberta'Job'Grant'


86 EMPLOYER SURVEY

Job Bank Analysis

Service Canada’s Job Bank is the country’s largest bi-lingual online listing of job opportunities in Canada. Job seekers are able to view thousands of new job opportunities across Canada every day and access online tools such as Job Match, Job Alert, Resume Builder and Career Navigator free of charge. The site also has a training and careers section, which helps job seekers identify career options, as well as provides information on trends, employment prospects and salary ranges of occupations. Employers have access to a variety of HR management information resources and can advertise and manage their job postings online at their own convenience free of charge.

City of CalgaryFor the City of Calgary, there were 6,833 job postings146 on the Job Bank in the third quarter of 2015, advertising for a total of 16,148 positions. This was down from 18,359 positions the previous quarter and down significantly from 26,318 positions in the third quarter of 2014. Forty-three per cent of the positions were sales and service occupations and 29 per cent were trades, transport and equipment operators occupations. The top five occupations advertised were food counter attendants, kitchen helpers and related occupations (1,242 positions), cooks (1,062 positions), food service supervisors (902 positions), retail salespersons and sales clerks (748 positions) and truck drivers (618 positions).

Number of Positions by OccupationQ3 2014 and 2015, City of Calgary

!95!!

!364!!

!384!!

!469!!

!544!!

!552!!

!845!!

!1,369!!

!4,615!!

!6,911!!

!263!!

!512!!

!498!!

!559!!

!1,182!!

!1,301!!

!1,049!!

!1,869!!

!8,766!!

!10,319!!

!-!!!! !2,000!! !4,000!! !6,000!! !8,000!!!10,000!!!12,000!!

Health!Primary!Industry!

Social!Science,!Educ.,!Gov't!&!Religion!Art,!Culture,!RecreaKon!&!Sport!

Processing,!Manufacturing!&!UKliKes!Natural!&!Applied!Sciences!

Management!Business,!Finance!&!Admin.!

Trades,!Transport!&!Equip.!Operators!Sales!&!Service!

Q3!2014! Q3!2015!


146 Total job postings are all unduplicated postings appearing in the Job Bank each week. This figure includes postings from the previous weeks that have been reposted as well as new job postings.

JOB BANK ANALYSISThis section provides a summary of jobs posted to the Job Bank in the third quarter of 2015.

87

Communities Surrounding CalgaryFor the communities surrounding Calgary,147 there were 1,575 job postings on the Job Bank in the third quarter of 2015, advertising for a total of 4,516 positions. This was down from 5,315 positions the previous quarter and down from 7,235 positions in the third quarter of 2014. Thirty-nine per cent of the positions were sales and service occupations and 35 per cent were trades, transport and equipment operators occupations. The top five occupations advertised were truck drivers (528 positions), industrial butchers and meat cutters, poultry preparers and related workers (282 positions), food service supervisors (257 positions), cooks (253 positions) and food counter attendants, kitchen helpers and related occupations (224 positions).

Banff/Canmore AreaFor the Banff/Canmore area, there were 584 job postings on the Job Bank in the third quarter of 2015, advertising for a total of 1,649 positions. This was down from 2,125 positions the previous quarter and down significantly from 3,712 positions in the third quarter of 2014. Sales and service occupations accounted for 86 per cent of the total positions in the third quarter of 2015.

The top five occupations advertised in the third quarter of 2015 were food counter attendants, kitchen helpers and related occupations (428 positions), food service supervisors (243 positions), light duty cleaners (228 positions), cooks, (113 positions) and retail salespersons and sales clerks (104 positions).

Number of Positions by OccupationQ3 2014 and 2015, Surrounding Communities

!22!!

!28!!

!50!!

!79!!

!79!!

!159!!

!305!!

!450!!

!1,567!!

!1,777!!

!67!!

!55!!

!42!!

!175!!

!159!!

!141!!

!610!!

!994!!

!2,419!!

!2,573!!

!-!!!! !500!! !1,000!!!1,500!!!2,000!!!2,500!!!3,000!!

Art,!Culture,!Recrea8on!&!Sport!Health!

Social!Science,!Educ.,!Gov't!&!Religion!Business,!Finance!&!Admin.!Natural!&!Applied!Sciences!

Management!Primary!Industry!

Processing,!Manufacturing!&!U8li8es!Trades,!Transport!&!Equip.!Operators!

Sales!&!Service!

Q3!2014! Q3!2015!

Number of Positions by OccupationQ3 2014 and 2015, Banff/Canmore Area

!3!!

!3!!

!6!!

!11!!

!17!!

!22!!

!29!!

!59!!

!82!!

!1,417!!

!22!!

!17!!

!12!!

!25!!

!6!!

!15!!

!80!!

!124!!

!81!!

!3,330!!

!-!!!! !500!!!1,000!!!1,500!!!2,000!!!2,500!!!3,000!!!3,500!!

Natural!&!Applied!Sciences!Health!

Processing,!Manufacturing!&!UFliFes!Business,!Finance!&!Admin.!

Social!Science,!Educ.,!Gov't!&!Religion!Primary!Industry!

Management!Trades,!Transport!&!Equip.!Operators!

Art,!Culture,!RecreaFon!&!Sport!Sales!&!Service!

Q3!2014! Q3!2015!


147 Including but not limited to Airdrie, Chestermere, Cochrane, High River and Okotoks.

88 JOB BANK ANALYSIS

Calgary (city) Positions - Q3 2015148

NOC Code Occupation Positions

6641 Food Counter Attendants, Kitchen Helpers and Related Occupations 1,242 6242 Cooks 1,062 6212 Food Service Supervisors 902 6421 Retail Salespersons and Sales Clerks 748 7411 Truck Drivers 618 1453 Customer Service, Information and Related Clerks 601 7271 Carpenters 443 7452 Material Handlers 355 6661 Light Duty Cleaners 352 7322 Motor Vehicle Body Repairers 333 7611 Construction Trades Helpers and Labourers 331 7284 Plasterers, Drywall Installers and Finishers and Lathers 288 8612 Landscaping and Grounds Maintenance Labourers 287 0631 Restaurant and Food Service Managers 263 6474 Babysitters, Nannies and Parents' Helpers 255 6671 Operators and Attendants in Amusement, Recreation and Sport 235 5254 Program leaders and instructors in recreation, sport and fitness 225 6411 Sales Representatives - Wholesale Trade (Non-Technical) 216 6622 Store shelf stockers, clerks and order fillers 207 4212 Social and community service workers 201 7291 Roofers and Shinglers 186 0621 Retail Trade Managers 179 7282 Concrete Finishers 179 6211 Retail Trade Supervisors 178 6651 Security Guards and Related Occupations 172 9619 Other Labourers in Processing, Manufacturing and Utilities 165 7421 Heavy Equipment Operators (Except Crane) 160 6611 Cashiers 149 6453 Food and Beverage Servers 147 7294 Painters and decorators (except interior decorators) 147 1471 Shippers and Receivers 137 7321 Automotive service technicians, truck and bus mechanics and mechanical repairers 131 0611 Sales, Marketing and Advertising Managers 119 6215 Cleaning Supervisors 119 7443 Automotive Mechanical Installers and Servicers 99 7441 Residential and Commercial Installers and Servicers 93 6231 Insurance Agents and Brokers 90 7283 Tilesetters 86 7414 Delivery and Courier Service Drivers 86 5252 Coaches 84 6623 Other sales related occupations 83 6662 Specialized Cleaners 80 9617 Labourers in food, beverage and associated products processing 80 7251 Plumbers 79 7272 Cabinetmakers 78 1122 Professional occupations in business management consulting 75 2171 Information Systems Analysts and Consultants 75


148 Only occupations with 75 or more positions are shown in the table.


Communities Surrounding Calgary Positions - Q3 2015149


7411 Truck Drivers 5289462 Industrial Butchers and Meat Cutters, Poultry Preparers and Related Workers 2826212 Food Service Supervisors 2576242 Cooks 2536641 Food Counter Attendants, Kitchen Helpers and Related Occupations 2246421 Retail Salespersons and Sales Clerks 2066474 Babysitters, Nannies and Parents' Helpers 1717271 Carpenters 1268612 Landscaping and Grounds Maintenance Labourers 1217611 Construction Trades Helpers and Labourers 1066251 Butchers and Meat Cutters - Retail and Wholesale 1009617 Labourers in food, beverage and associated products processing 1006651 Security Guards and Related Occupations 947284 Plasterers, Drywall Installers and Finishers and Lathers 927321 Automotive service technicians, truck and bus mechanics and mechanical repairers 740631 Restaurant and Food Service Managers 678253 Farm Supervisors and Specialized Livestock Workers 677291 Roofers and Shinglers 627443 Automotive Mechanical Installers and Servicers 606453 Food and Beverage Servers 557452 Material Handlers 526211 Retail Trade Supervisors 517421 Heavy Equipment Operators (Except Crane) 500621 Retail Trade Managers 472225 Landscape and horticulture technicians and specialists 467282 Concrete Finishers 467441 Residential and Commercial Installers and Servicers 467283 Tilesetters 456233 Retail and Wholesale Buyers 426622 Store shelf stockers, clerks and order fillers 426623 Other sales related occupations 428432 Nursery and Greenhouse Workers 396611 Cashiers 377322 Motor Vehicle Body Repairers 376215 Cleaning Supervisors 366411 Sales Representatives - Wholesale Trade (Non-Technical) 318611 Harvesting Labourers 309613 Labourers in Chemical Products Processing and Utilities 306661 Light Duty Cleaners 287292 Glaziers 267245 Telecommunications Line and Cable Workers 257219 Contractor s& Supervisors, Other Construction Trades, Installers, Repairers & Servicers 244212 Social and community service workers 224214 Early Childhood Educators and Assistants 21




Banff/Canmore Area Positions - Q3 2015150


6641 Food Counter Attendants, Kitchen Helpers and Related Occupations 4286212 Food Service Supervisors 2436661 Light Duty Cleaners 2286242 Cooks 1136421 Retail Salespersons and Sales Clerks 1045254 Program leaders and instructors in recreation, sport and fitness 826435 Hotel Front Desk Clerks 616441 Tour and Travel Guides 386453 Food and Beverage Servers 366241 Chefs 226681 Dry Cleaning and Laundry Occupations 186216 Other Service Supervisors 170631 Restaurant and Food Service Managers 156663 Janitors, Caretakers and Building Superintendents 156211 Retail Trade Supervisors 146611 Cashiers 136622 Store shelf stockers, clerks and order fillers 127281 Bricklayers 127241 Electricians (Except Industrial and Power System) 116215 Cleaning Supervisors 106671 Operators and Attendants in Amusement, Recreation and Sport 108431 General Farm Workers 104214 Early Childhood Educators and Assistants 97282 Concrete Finishers 96623 Other sales related occupations 88253 Farm Supervisors and Specialized Livestock Workers 86442 Outdoor Sport and Recreational Guides 66682 Ironing, Pressing and Finishing Occupations 67251 Plumbers 69619 Other Labourers in Processing, Manufacturing and Utilities 60621 Retail Trade Managers 51231 Bookkeepers 57312 Heavy-Duty Equipment Mechanics 5




Appendix A: Survey Methodology

The Q3 2015 Calgary and Area Employer Survey is based on responses to a telephone questionnaire conducted in July, August and September 2015 of Calgary and area employers with 10 - 49 employees (small-sized employers). Following are the number of respondents from each industry sector.

Industry Number of Respondents

Mining & Oil & Gas 20Construction 20Manufacturing 20Wholesale & Retail Trade 20Transportation & Warehousing 20Professional, Scientific & Technical Services 20Health Care & Social Assistance 20Accommodation & Food Services/Arts & Entertainment 20Finance, Insurance, Real Estate & Leasing 20Other 20Total 200

The ‘Other’ industry category includes a variety of companies from the remainder of the industry categories: Agriculture, Utilities, Information & Culture, Management of Companies, Administrative & Support Services, Educational Services, Other Services and Public Administration.

It should be noted that the method of sample selection provides a good cross-section of opinion. Nevertheless, given the size of the sample, the statistical reliability of the survey is limited, particularly when the data is reported by industry. The value of this survey, however, goes beyond the data captured by the questionnaire. The telephone interview allows companies to expand on their responses, which provides invaluable information and comments that cannot be measured quantitatively.


APPENDIX ASurvey Methodology

92

Appendix B: Employer Survey Occupation Results

Twenty-two per cent of the employers laid off approximately 121 workers in the three months prior to their survey.

Industry Occupation Number of Layoffs

Accommodation & Food Services/Arts & Entertainment Operation Assistants 6 Food Attendant 3 Servers 3

Subtotal 12 Construction Field 15

Carpenter 5 Senior Project Manager 3 Labourers 2 Drywaller 2 Office 1 Labour 1 Electricians 1

Subtotal 30 Health Care & Social Assistance Front Line 6

Executive 2 Support 2 Reception 1 Outreach Worker 1

Subtotal 12 Manufacturing General Laborer 2

Sales 1 CSR 1 Inside Sales 1 Parts Purchasing 1 Prepress Operator 1

Subtotal 7 Mining & Oil & Gas Operations 10

Contractors 3 Field 2 Driller 1 Consultant 1 Executive Assistant 1

Subtotal 18 Other Analysts 7 Subtotal 7 Professional, Scientific & Technical Services Land Acquisition 8

Geomatics 4 Marketing Analyst 2 Surveyors 2 Business Development 1 Project Manager 1 Clerical 1 Contractor 1

Subtotal 20 Transportation & Warehousing Drivers 4

Contractor 1 Subtotal 5 Wholesale & Retail Trade Sales 5

Equipment Sales 3 Marketing Analyst 1 Greenhouse 1

Subtotal 10 Grand Total 121


APPENDIX BEmployer Survey Occupation Results

93

Twenty-seven per cent of the employers had a total of 110 vacant positions that needed to be filled.

NOC Code Occupation Vacant Positions

4212 Community and social service workers 167511 Truck drivers 116711 Food counter attendants, kitchen helpers and related occupations 96731 Light duty cleaners 66733 Janitors, caretakers and building superintendents 61111 Financial auditors and accountants 54214 Early childhood educators and assistants 5631 Restaurant and food service managers 41434 Banking, insurance and other financial clerks 32233 Industrial engineering and manufacturing technologists and technicians 34152 Social workers 36221 Technical sales specialists - wholesale trade 36311 Food service supervisors 39617 Labourers in food, beverage and tobacco processing 31223 Personnel and recruitment officers 25252 Coaches 26322 Cooks 26525 Hotel front desk clerks 29413 Glass forming and finishing machine operators and glass cutters 29615 Labourers in rubber and plastic products manufacturing 2121 Insurance, real estate and financial brokerage managers 11114 Other financial officers 11431 Accounting and related clerks 12173 Software engineers and designers 12175 Web designers and developers 13012 Registered nurses 14156 Employment counsellors 14165 Health policy researchers, consultants and program officers 14215 Instructors and teachers of persons with disabilities 15241 Graphic designers and illustrators 16315 Cleaning supervisors 16321 Chefs 16411 Sales representatives - wholesale trade (non-technical) 16551 Customer service representatives - financial services 16611 Cashiers 17235 Structural metal and platework fabricators and fitters 17312 Heavy-duty equipment mechanics 17513 Taxi and limousine drivers and chauffeurs 1


94 APPENDIX B

calgary and area labour market 2015 - quarterly …...2015>q3 this calgary and area labour market...

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