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Does Alberta have an employment problem that’s brewing?

New labour data from Statistics Canada raises the troubling question after it showed two distinct trends unfolding in the province: more jobs, yet a rising jobless rate.

The province saw 12,800 new jobs created in August.

It’s a hopeful sign as more positions popped up in the services sectors — such as wholesale and retail trade, real estate, finance, food services and accommodation — dominated by part-time positions.

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Yet, the unemployment rate bounced higher — much higher — to 7.7 per cent, up from 7.1 per cent in July.

The jobless measure is now at its highest point — not including the dark days of the COVID-19 pandemic — since 2017. Only two provinces had a higher unemployment rate last month: Prince Edward Island and Newfoundland and Labrador.

This apparent contradiction — more jobs and a growing economy, yet more people hunting for work — can be partly explained by another phenomenon: Alberta’s persistent population boom.

Companies are growing their workforce, but can’t create enough new positions to keep up with the sheer number of people moving here now looking for a paycheque.

“We’re just bringing in more people than the economy can absorb,” Business Council of Alberta vice-president Mike Holden said Friday.

“There’s a slowing economy factor here that’s also contributing to this rising unemployment.”

Over the past year, the province has created about 50,000 new jobs, although the momentum has been “anemic” in recent months because of the effect of higher interest rates and a sluggish Canadian economy, said Charles St-Arnaud, Alberta Central chief economist.

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“We don’t have an economic contraction. We are still growing,” he noted.

“It’s just that we’re not growing fast enough or creating jobs fast enough to absorb the increase in the labour force.”

It’s not just an Alberta phenomenon, as the national jobless rate ticked up to 6.6 per cent, while 22,000 new jobs were created in August.

The trend is more pronounced in Alberta because the population growth here is the highest in the country, with thousands of newcomers arriving from outside of Canada and other provinces, particularly Ontario and British Columbia.

There’s also no sign it’s going to significantly slow down.

During the first three months of this year, Alberta’s population increased by 204,000 residents from the same period a year ago, the strongest year-over-year growth rate since the early 1980s.

“National drivers such as high interest rates and high national immigration are contributing to temporarily higher unemployment,” Alberta Jobs Minister Matt Jones said in a statement.

“These figures are temporary . . . despite this record-high migration, unemployed Albertans tend to find jobs more quickly than their provincial counterparts.”

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In last week’s provincial fiscal update, the government projected Alberta’s population will jump this year by a sizzling 4.6 per cent, eclipsing its spring budget forecast.

Growth is projected to cool to 3.2 per cent next year, but well above the budget’s expectations.

Alberta’s new economic statement also forecasts the province’s GDP will expand by 3.3 per cent this year.

But the unemployment rate is now expected to average seven per cent this year, before easing slightly in 2025 as population growth decelerates and job growth continues.

“The slack in the labour market has been uneven, with unemployment rising disproportionately among new entrants such as youth and newcomers,” the fiscal update states.

It has also become harder for workers to quickly land jobs in Alberta as competition has increased with more people applying for fewer positions, said Jackie Rafter, president of career-counselling service Higher Landing, which has offices in Calgary and Toronto.

The days of newcomers expecting to easily find work in Calgary are also changing, particularly for some professional occupations that are facing the effect of technological disruptions, such as from AI.

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“There’s a lot of attractiveness to moving to Alberta,” Rafter said.

“You’ve got people that are moving there for economic reasons and quality of life reasons, and then they land there. And then, of course, the competition goes up because you’ve got more people vying for the same number of jobs.”

The latest jobless rate in the Calgary region increased to 7.5 per cent (based on a three-month moving average) and 8.6 per cent in the Edmonton region.

While a growing population puts some strain on the province’s housing, education and health-care systems, it is also helping to fuel the very growth in Alberta that is keeping overall sales and economic activity up, preventing jobs from disappearing, noted St-Arnaud.

“If it was not for the strong population growth, the unemployment rate might actually be increasing because people are losing their jobs,” he said.

“It has in some ways insulated the economy from a recession.”

The federal government has announced changes this year to limit study permits for international students. Ottawa also recently unveiled plans to restrict the number of applications for lower-wage temporary foreign workers in areas of the country that have a jobless rate of six per cent or higher, such as Alberta.

“We do want to see the population grow. We have lots of room. We have lots of opportunity,” added Holden.

“It’s a better problem to have than a decrease in population, that’s for sure. But, you know, it’s a struggle to be able to absorb that kind of population growth.”

Chris Varcoe is a Calgary Herald columnist.

[email protected]

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