Varcoe: Stellar jobs report puts wind in finance minister’s sails

Joe Ceci was in a chipper mood Friday, and why shouldn’t he be?

After the pummelling the finance minister and NDP government have taken in recent months over the size of the provincial deficit, high unemployment rate and constant trickle of credit rating downgrades, Friday’s job numbers were something to celebrate.

Alberta created 26,000 full- and part-time jobs in December, with many new positions appearing in the natural resources sector, accommodations and food services, according to Statistics Canada’s latest report.

Throughout all of last year, employment grew by 54,900 jobs, the province’s best performance since oil prices tanked in 2014. New jobs were reported in the manufacturing industry, wholesale and retail trade, as well as the natural resources area.

“This is a third consecutive month of full-time job growth, which is a really good news. It points to a trend that I hope continues in the future,” Ceci told reporters in Calgary.

For the thousands of Albertans who’ve lost their job during the recession, it is a promising sign.

As economist Trevor Tombe at the University of Calgary points out, December saw the single-biggest monthly increase in jobs for Alberta since June 2011 — when oil traded at about US$80 a barrel — although he cautions about reading too much into a single monthly report.

Instead, focus on the trend lines, which are also moving in the right direction on the jobs front.

Alberta’s unemployment rate, which sat at 8.5 per cent a year earlier, dropped to 6.9 per cent last month, its lowest point in more than two years.

According to a report by economist Robert Kavcic of BMO Capital Markets, Alberta had the “single-best quarter for jobs gains ever in the province” from a statistical standpoint, and “that has lifted employment back above pre-oil shock levels.”

But the employment figures aren’t the only reason the finance minister was in an ebullient mood.

Oil prices, which remain the lifeblood of Alberta’s energy sector, have been rising recently, topping US$62 a barrel this week for West Texas Intermediate crude, before dipping back to $61.44 on Friday.

Higher oil prices are critical to triggering future capital investment decisions from petroleum producers — creating more jobs across the sector — and they’re also integral to the future finances of the provincial government.

Every $1-a-barrel increase over the course of the year pumps another $310 million into Alberta’s coffers.

The growing differential between Canadian heavy oil and U.S. benchmark crude threatens to take away some of the shine, however. With oilsands production rising in Alberta and pipelines essentially full, the differential has widened in the past month, sitting at US$25.05 a barrel on Friday.

“There’s no secret we need to see pipelines to tidewater,” Ceci said. “We need to see that happen so that we can get world oil prices and not get a discount for every barrel that goes to the states.”

In his last fiscal update, the finance minister estimated crude oil prices will average US$49 a barrel this budget year, but said Friday the strengthening of “this new base” around $55 is a positive indicator.

But it’s the employment news that was most encouraging for the Calgary-Fort MLA.

In Edmonton and Calgary, the unemployment rate now sits at 7.5 per cent — Calgary’s figure was above 10 per cent a year ago — although among major Canadian cities, only St. John’s, N.L., and Saskatoon had higher figures.

If you dig deeper into the Alberta data, the unemployment rate in December sat at 5.5 per cent in Red Deer, 6.2 per cent in the Wood Buffalo-Cold Lake area, and 5.9 per cent in Lethbridge-Medicine Hat.

“Albertans should take away that the recovery is well underway, that 2017 was a year in which we emerged from recession, but it’s not all rosy,” Tombe added.

“There are still pockets of pain in Alberta’s labour market … Young men, particularly those with lower levels of education, are not experiencing the recovery.”

It’s also worth remembering more than 165,000 Albertans were unemployed last month.

And for the 48,000 Albertans who’ve been out of work for six months or longer, like Jilczy Nelson-Mamani of Calgary, talk of a recovery remains elusive.

She lost her job as a project manager at TransCanada in the fall of 2016 and is still looking for a full-time position.

After a frustrating hunt for work last year, she stopped searching in September and began to put together plans to start her own business.

But over the Christmas holidays, she noticed a few vacant positions in the oilpatch and sent out her resume to apply for 10 open jobs.

“I thought what the heck, I’ll just apply and see what happens. And I got called for two interviews, so I don’t know — is that a good sign, not a good sign? I’ll just take it (as) it comes,” she said.

“It seems encouraging, but I’ve gone through these encouraging times before, so I don’t get overly excited about it.”

Maybe that’s the best approach for all Albertans to take.

Encouraging signs are emerging for the provincial economy, but after the battering of a difficult recession, Alberta’s employment recovery still has a ways to go.

Chris Varcoe is a Calgary Herald columnist.

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