Calgary & Area Labour Market Report - Fourth Quarter · Calgary Region Economy ... The supply of homes available for sale at the current sales ratio declined from 7.7 months to 7.0

Alberta Human Services

Calgary & Area Labour Market Report Fourth Quarter 2011

Calgary & Area Labour Market Report – Fourth Quarter 2011


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TABLE OF CONTENTS Introduction ........................................................................................................................ 3

Organization of the Report ............................................................................................... 3 Executive Summary ........................................................................................................... 4 The Economy ................................................................................................................... 12

Global Economy ............................................................................................................. 12 U.S. Economy ................................................................................................................. 19 Canadian Economy ........................................................................................................ 28 Alberta Economy ............................................................................................................ 40 Calgary Region Economy ............................................................................................... 57

Trends in the Labour Market .......................................................................................... 69 Canada ........................................................................................................................... 69 Alberta ............................................................................................................................ 74 Calgary Census Metropolitan Area (CMA) ..................................................................... 78

Calgary & Area Employer Survey ................................................................................... 81 Q4 2011 Survey Results: Micro-Sized Companies (<10 Employees) ............................ 81

Job Bank Analysis ......................................................................................................... 102 Calgary (city) ................................................................................................................ 102 Communities Surrounding Calgary ............................................................................... 105 Banff/Canmore Area ..................................................................................................... 107

Appendix A ..................................................................................................................... 110 Survey Methodology ..................................................................................................... 110



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INTRODUCTION Alberta Human Services provides career and labour market information products and resources, with both a provincial and local/regional focus, in order that Albertans have the skills, supports and information they need to succeed in the labour market.

This report provides labour market information and analysis for use by Albertans in learning about the labour market and career planning; by employers and industry for use in understanding and addressing labour market issues; and by the Alberta Human Services Calgary Region for use in strategic planning for programs and services.

ORGANIZATION OF THE REPORT This report contains the following information:

Economic Overview – The Calgary regionʼs economy is influenced by global economic conditions, and by economic drivers in the Canadian economy and elsewhere in Alberta. This section provides information on economic activity in the fourth quarter of 2011, as well as outlooks (where available) for the global, U.S., Canada, Alberta and Calgary region economies.

Trends in the Labour Market – This section examines labour market information for Canada, Alberta and the Calgary Census Metropolitan Area (CMA). The information provided in this section is based upon Statistics Canadaʼs Labour Force Survey.

Calgary and Area Employer Survey – This section highlights findings from a survey conducted in the fourth quarter of 2011 of Calgary and area companies with <10 employees. Results of this survey are compared to the results of a survey conducted in the fourth quarter of 2010 (companies with <10 employees).

Job Bank Analysis – This section provides a summary of jobs posted to the Job Bank in the fourth quarter of 2011.

Disclaimer

Alberta Human Services has made every effort to ensure that the information contained in this report is reliable, but makes no guarantee of its accuracy or completeness. The user of any information in this report accepts full responsibility and risk of loss resulting from decisions made by the user.



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EXECUTIVE SUMMARY The Economy Global Economy

The economic momentum of the global economy has slowed down considerably during the second half of 2011, mostly due to increased financial volatility. The main risk to a sustainable economic recovery remains the sovereign debt crisis affecting several European Union economies.

• Global gross domestic product (GDP) increased 3.8 per cent in 2011, following a 5.2 per cent growth in 2010.

• Despite the better than anticipated performance of 2011, output growth in advanced economies is forecast to slow to 1.3 per cent in 2012. Given that production in advanced economies accounts for half of the total global output, it is estimated that this slowdown will deduct about 0.15 percentage points from the world economic growth in 2012. Output in emerging and developing countries is expected to increase 5.1 per cent in 2012, which will translate into a 0.55 percentage point deduction from total world output growth.

• From 2013 forward, economic growth in the advanced economies is expected to return to pre-recession levels, with an annual average growth of two per cent. While growth in emerging economies will slow down compared to historical rates, it is still expected to be double that of advanced economies.

• All in all, global output is expected to increase on average 3.5 per cent per year from 2013 to 2016. World GDP growth is then expected to slow down and average 2.7 per cent annually from 2017 to 2025.

• While Asia-Pacific economies are generally insulated from the impacts of debt crisis in the European Union, economic growth in the region is also expected to slow down. The International Monetary Fund (IMF) expects economic growth in the developing Asia economies to be 7.9 per cent in 2011 as a whole, compared with the 9.5 per cent growth recorded in 2010. Over the next two years, growth is expected to average 7.5 per cent annually in the region. China and India continue to be the main powerhouses in the region.

U.S. Economy

The economic performance of the U.S. economy has been very sluggish for the first part of 2011, which makes the possibility of a second dip a very likely scenario. The underperformance of the U.S. economy combined with the risks related to Europeʼs continued sovereign debt crisis almost pushed all the major forecasting agencies to downgrade their outlook for the U.S. economy, suggesting once again that the road to recovery for the U.S. will be a long and slow one.

• Real GDP in the U.S. increased at an annual rate of 1.8 per cent in the third quarter of 2011. This followed an increase of 1.3 per cent in the second quarter and 0.4 per cent in the first quarter of the year. The main driver of the third quarter growth was the gains recorded in household spending.

• In the face of the ongoing weakness in the U.S. economy during the first half of the year, the Federal Reserve (Fed) announced in August 2011 that it was committed to keep the federal funds rate close to zero until at least mid-2013. A month later in September 2011, the Fed announced another bond program dubbed “Operation Twist” that could be used as a tool to lower the long-term interest rates. The Fed expects to stimulate housing demand through lower mortgage rates without injecting more money into the system.



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• The most recent forecasts for real GDP growth in the U.S. range between 1.5 per cent and 1.8 per cent for 2011 as a whole. TD Economics and the International Monetary Fund (IMF) expect real GDP in the U.S. to expand by 1.9 per cent in 2012. In contrast, the Conference Board of Canada and RBC Economics are more optimistic and forecast a growth of 2.5 per cent for the U.S. economy in 2012.

• TD Economics expects consumer spending to expand an average of 2.2 per cent annually between 2011 and 2013. Business investment is expected to increase 8.8 per cent in 2011 and slow down to 5.9 per cent in 2012.

• The U.S. economy is forecast to add 1.3 million jobs in 2011 as a whole, which should bring the unemployment rate from 9.6 per cent in 2010 down to 8.9 per cent in 2011. Employment is then projected to increase 1.1 per cent in 2012 and 1.5 per cent in 2013.

• Three years after the economic recession, the U.S. housing market is still trying to get back on its feet. Prices for new and existing homes continued to trend downwards during the summer and the number of underwater mortgages, those where the value of the home is less than the mortgage, remained on an upward trend. According to the Conference Board, out of the 51 million mortgaged homes in the U.S., close to 15 million are underwater and 3.7 million are seriously delinquent.

• Privately-owned housing starts in the U.S. stood at 685,000 units in November 2011. This represented an increase of 9.3 per cent from a month earlier and an increase of 24 per cent year-over-year. Novemberʼs gain in total housing starts was mainly driven by a significant gain in multi-family starts.

• Existing home sales in the U.S. increased 4.0 per cent month-over-month to 4.42 million in November 2011. Single-family sales accounted for approximately 90 per cent of total sales in November. At the regional level, the largest gain was recorded in the Northeast (+9.8 per cent), which was followed by the Mid West (+4.3 per cent), West (+3.6 per cent) and South (+2.4 per cent). The supply of homes available for sale at the current sales ratio declined from 7.7 months to 7.0 months in November 2011, which was the lowest mark over the last two years.

Canadian Economy

Following a contraction of 0.5 per cent in the second quarter of 2011, the Canadian economy advanced by a healthy 3.5 per cent in the third quarter of 2011. This level of economic growth was similar to the first quarter of 2011. By comparison, real gross domestic product (GDP) in the U.S. increased by 1.8 per cent in the third quarter of 2011.

• The Bank of Canada expects the Canadian economy to continue to grow slowly over the medium term. On average, real GDP in Canada is expected to expand 2.1 per cent in 2011 and 1.9 per cent in 2012. The Bank expects economic growth to pick up to 2.9 per cent in 2013. This rate of growth will be above the potential output growth rate and will also imply a return to full capacity by the end of 2013.

• A lower optimism among Canadian businesses was echoed in the Bank of Canadaʼs Autumn 2011 Business Outlook Survey. While on balance, 30 per cent of the firms surveyed reported an increased sales volume over the past 12 months, they did not expect this rebound in sales to continue. The balance of opinion on future sales growth over the next 12 months fell to six per cent due to weaker expectations regarding the U.S. and the world economic outlook. The majority of respondents expecting an increase in sales growth indicated that they plan to achieve this through new products rather than an increase in demand.

• The Canadian dollar averaged 99 cents U.S. in the fourth quarter of 2011, down from an average of 102 cents U.S. the previous quarter, but unchanged year over year. The commodity sensitive currency has been trading above parity against the U.S. dollar since the beginning of 2011, reaching a high of 106 cents U.S. near the end of July 2011.



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• Consumer price increases in Canada slowed to 2.9 per cent in the 12 months leading to October 2011, following a 3.2 per cent annual increase the previous month. Lower energy prices in October 2011, relative to the previous month, was the main reason for the slowdown. Inflation in Canada is forecast to ease over the next couple of years, with the majority of forecasting agencies expecting inflation to be below 2.0 per cent in 2012 and just slightly above 2.0 per cent in 2013.

• As was widely anticipated, the Bank of Canada kept the target for the overnight rate at 1.0 per cent in its December 6, 2011 interest rate announcement. The Bankʼs key lending rate has been at 1.0 per cent since September 2010. The Bank meets every six weeks to make a decision on its interest rate policy. The next scheduled date for the overnight rate target announcement is Jan 17, 2012. The majority of forecasting agencies are expecting the Bank of Canada to remain on hold in 2012.

• Canadaʼs population increased by122,600 or 0.4 per cent from the previous quarter to an estimated 34,605,300 as of October 1, 2011. All provinces posted population increases in the third quarter of 2011, with Alberta and Saskatchewan posting the highest growth rate among provinces at 0.5 per cent.

Alberta Economy

Although uncertainties surrounding the sovereign debt crisis in the European Union and the slowdown in economic momentum for both the U.S. and world economies have put Canadian economic growth on a softer path, the Alberta economy is expected to weather these uncertainties relatively well and lead the nation in terms of economic growth over the medium term.

• Robust employment and wage gains are expected to lift consumer spending in the province. Consumer spending in Alberta is forecast to increase 5.1 per cent in 2011 and 5.9 per cent in 2012. Consumer spending is then expected to gradually slow and average 4.8 per cent growth annually from 2013 to 2016.

• Forecasts for real GDP growth in Alberta range between 3.1 per cent and 4.0 per cent in 2011. This pace of growth is also expected to continue through the next two years with real GDP expected to increase between 3.6 per cent and 3.9 per cent in 2012, and between 3.8 per cent and 4.5 per cent in 2013.

• The price of West Texas Intermediate (WTI) crude oil averaged $94 U.S. per barrel in the fourth quarter of 2011, up 4.8 per cent from the previous quarter, and up over 10 per cent year-over-year. The U.S. Energy Information Administration (EIA) is forecasting WTI crude oil will average $100 U.S. per barrel in 2012, and reach $106 U.S. per barrel by the end of 2013.

• Natural gas prices averaged $3.33 CAD per gigajoule (GJ) in the third quarter of 2011. This was down 2.2 per cent from the previous quarter, but up 1.7 per cent from an average of $3.27 CAD per GJ in the third quarter of 2010.

• As of November 2011, there were a total of 897 major construction projects in Alberta worth $193.5 billion that were either planned, underway or recently completed. Oil sands projects accounted for over 60 per cent of the total value of projects in the province.

• Consumer prices in Alberta increased 3.4 per cent year-over-year in October 2011, a rate not seen in the province since August 2008. This was also the first time in two and half years that Albertaʼs inflation rate was higher than the national average (2.9 per cent). The inflation rate in Alberta is expected to average 2.3 per cent in 2011, the lowest among provinces.



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• Housing starts in Alberta totaled 7,589 units in the third quarter of 2011, an increase of 2.0 per cent from the third quarter of 2010. Multi-family starts in rose 6.0 per cent year-over-year to 2,968 units, while single-detached starts declined less than 1.0 per cent to 4,621 units. Overall, housing starts in Alberta are forecast to total 25,325 units in 2011, a 6.5 per cent decline from the previous year. As the economic recovery solidifies, Canada Mortgage and Housing Corporation (CMHC) is expecting total housing starts in Alberta to increase 15 per cent year-over-year to 29,200 units in 2012.

• Increased employment and positive net migration pushed the average apartment vacancy rate in Alberta down to 3.4 per cent in October 2011, from 4.6 per cent the previous year. The average rent for a two-bedroom apartment in Alberta rose slightly to $1,044 per month in October 2011, from $1,036 per month the previous year.

• Retail sales in Alberta totaled $16.0 billion in the third quarter of 2011, reflecting an increase of 1.4 per cent from the previous quarter and an increase of 5.3 per cent year-over-year. Wholesale sales totaled $18.1 billion in the third quarter of 2011, up 7.4 per cent from the previous quarter and up 14 per cent year-over-year.

• In October 2011, average weekly earnings of Alberta payroll employees were relatively unchanged from the previous month at $1,049, but were up 4.5 per cent year-over-year. Nationally, average weekly earnings rose to $885 in October 2011, a 1.4 per cent increase from the previous month and a 2.7 per cent increase year-over-year.

• A total of 1,718 Albertans and Alberta businesses filed for bankruptcy in the third quarter of 2011, down 12 per cent from the previous quarter and down 17 per cent year-over-year. Consumer bankruptcies in Alberta declined 16 per cent year-over-year to 1,654 in the third quarter of 2011, while business bankruptcies fell 30 per cent to 64 during the same period.

• Continuing the downward trend started in late 2009, the average number of Albertans receiving regular Employment Insurance (EI) benefits declined 11 per cent from the previous quarter and 33 per cent year-over-year to 31,477 in the third quarter of 2011.

• Alberta once again posted the highest quarterly population growth rate among provinces in the third quarter of 2011, along with Saskatchewan. Albertaʼs population grew by 19,400 or 0.5 per cent to an estimated 3,798,800 as of October 1, 2011.

Calgary Region Economy

An increase in energy prices and energy related investments have been supporting the Calgary economy over the last two years as it continued to rebound from the adverse impacts of the economic recession. While there may be some revisions when the final numbers come in, the Calgary economy is forecast to post an overall real GDP growth of 2.5 per cent in 2011, following a 2.9 per cent growth in 2010.

• Overall, economic growth in the Calgary CMA is expected to accelerate to 3.6 per cent in 2012 and 4.9 per cent in 2013. Calgaryʼs economic growth in 2012 will only be second to Saskatoon (+4.0 per cent), which is benefiting from increased investment in the natural resources sector. Real GDP growth in the Calgary CMA is expected to average 4.3 per cent annually between 2013 and 2016, putting it back to first place in terms of real GDP growth among all CMAs included in the Conference Board of Canadaʼs Metropolitan Outlook.

• Prices for goods and services included in the all-items Consumer Price Index (CPI) increased 3.3 per cent year-over-year in October 2011 in the Calgary CMA. Provincially prices were up 3.4 per cent while national prices advanced 2.9 per cent over the same period. According to the City of Calgary, October was the first month in which local price increases outpaced the national average in two years.



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• Recent data on housing starts signal that a recovery might well be underway in Calgaryʼs housing market. Calgary builders broke ground on a total of 1,106 units in November 2011, almost double the 555 units started in November 2010. While the year-over-year gain was supported by increases in both single-detached and multi-family markets, the main driver was the rise in multi-family production.

• Calgaryʼs residential sales market also improved over 2011. Residential sales increased eight per cent year-over-year to 18,568 sales for 2011. Single-family home sales totaled 13,186 units in 2011, posting a nine per cent increase over the 2010 level. On the condominium side, sales totaled 5,382 units in 2011, representing an increase of four per cent from the previous year.

• Calgaryʼs apartment vacancy rate declined to 1.9 per cent in October 2011. This was the second consecutive annual decline in vacancy rates and also the lowest level since October 2007. The decline was due to increased demand for rental accommodations supported by increased employment and net migration to the region. The average rent for a two-bedroom apartment in the Calgary CMA increased 1.8 per cent year-over-year to $1,084 per month in October 2011.

• Calgary builders took out $1.3 billion in building permits in the third quarter of 2011, up 12 per cent from the previous quarter and up 54 per cent year-over-year. More than half of the building permits issued in the third quarter of 2011 were residential permits, worth $841.7 million.

• There were a total of 165 major projects worth $18.1 billion that were either proposed, announced or under construction in the city of Calgary as of November 2011. The project sectors with the greatest values in November 2011 were Commercial/Retail ($6.1 billion), Infrastructure ($5.0 billion) and Institutional ($3.3 billion).

• The office vacancy rate in Downtown Calgary fell to 6.2 per cent in the third quarter of 2011, a significant decline from the nearly 9.0 per cent vacancy rate recorded in the third quarter of 2010. With no new major supply of downtown office space planned until late 2015, Avison Young is forecasting the downtown vacancy rate will drop below 5.0 per cent within the next 12 months.

• In April each year, an official count of population and dwelling units is collected by the City of Calgary through the Civic Census. According to the results of the 2011 Civic Census, Calgaryʼs population reached an estimated 1,090,936 in April 2011. This represented a growth rate of 1.8 per cent from the previous year, a rate that is similar to that experienced in 2001 and 2003.

Trends in the Labour Market Canada

Employment in Canada fell by 21,800 in the fourth quarter of 2011 compared to the previous quarter. In December 2011, employment in Canada increased by a modest 17,500, after declining by 73,000 over the previous two months. Year-over-year, employment in Canada increased by 216,000 or 1.3 per cent in the fourth quarter of 2011.

• The unemployment rate in Canada averaged 7.4 per cent in the fourth quarter of 2011, up from 7.2 per cent the previous quarter but down from 7.7 per cent year-over-year. RBC Economics is forecasting the unemployment rate will gradually decline to below 7.0 per cent, but not until mid 2013.

• On a quarterly basis, almost three quarters of the job losses in Canada during the fourth quarter of 2011 were in part-time employment. Year-over-year, full-time employment in Canada rose by 1.7 per cent while part-time employment declined by 0.6 per cent.



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• Year-over-year, employment was up by 1.3 per cent for both men and women in the fourth quarter of 2011.

• On a year-over-year basis, employment increased in all of the age categories in the fourth quarter of 2011, with the most significant growth seen in the 55+ age category (+2.7 per cent).

• On an annual basis, employment increased in 10 industries in the fourth quarter of 2011, with the natural resources and accommodation and food services sectors posting the highest growth rate of 7.0 per cent. Employment in the utilities sector in Canada declined 7.7 per cent year-over-year in the fourth quarter of 2011, while employment in the manufacturing sector was down by 2.1 per cent.

Alberta

Employment in Alberta increased by 18,700 or 0.9 per cent on a quarterly basis in the fourth quarter of 2011. Year-over-year, employment was up by 94,600 or 4.7 per cent in Alberta in the fourth quarter of 2011, more than triple the national growth rate of 1.3 per cent.

• Among the economic regions in Alberta, Edmonton had the highest rate of employment growth in the fourth quarter of 2011 on a year-over-year basis (6.7 per cent), followed by Wood Buffalo (6.4 per cent), Red Deer (4.7 per cent), Athabasca-Grand Prairie-Peace River (3.6 per cent), and Calgary (3.1 per cent).

• Albertaʼs unemployment rate averaged 5.0 per cent in the fourth quarter of 2011, down from 5.5 per cent the previous quarter and down from 5.7 per cent year-over-year.

• The average length of unemployment in Alberta rose to 18.1 weeks in December 2011, quickly approaching the national average of 19.6 weeks. In comparison, the average duration of unemployment in the U.S. reached 40.9 weeks in December – the highest level ever recorded.

• Year-over-year, full-time employment in Alberta increased 6.1 per cent, accounting for all of the employment gains in the fourth quarter of 2011. Part-time employment declined 1.3 per cent in the fourth quarter of 2011.

• Employment increased in all of the age categories in the fourth quarter of 2011. While employment growth was in the 4.0 per cent range for Alberta workers under 65 years of age, employment in the 65+ age category grew by an impressive 20 per cent year-over-year in the fourth quarter of 2011.

• Employment increased in two-thirds of the industries in Alberta year-over-year in the fourth quarter of 2011, with the most notable increases (in numbers) seen in retail trade (+14,100), mining and oil and gas (+13,300), manufacturing (+11,500), professional, scientific and technical services (+10,700), agriculture (+10,400) and health care and social assistance (+9,500).

Calgary CMA

Employment in the Calgary CMA averaged 731,900 in the fourth quarter of 2011. This represented an increase of 0.5 per cent from the previous quarter and an increase of 4.1 per cent year-over-year.

• The most significant year-over-year employment gains in the Calgary CMA in the fourth quarter of 2011 were in oil and gas (+10,000), professional, scientific and technical services (+9,600) and trade (+8,300).

• Calgaryʼs unemployment rate averaged 5.5 per cent in the fourth quarter of 2011, down from 5.9 per cent the previous quarter. The Calgary CMAʼs labour force was virtually unchanged quarter over quarter. Calgaryʼs unemployment rate was also down from 6.2 per cent in the final quarter of 2010.

• Calgary continued to have the highest participation rate among metropolitan areas in Canada in December 2011 at 74.6 per cent, followed closely by Edmonton (73.8 per cent) and Regina (73.2 per cent).



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Calgary and Area Employer Survey For each quarter of 2011, a survey was conducted of Calgary and area companies. The purpose of the survey was to gather information from employers on their recruitment and retention practices and various other employment issues they were facing. In the first quarter of 2011, large-sized companies with 100 or more employees were surveyed, in the second quarter, medium-sized companies with 50 – 99 employees were surveyed, in the third quarter, small-sized companies with 10 – 49 were surveyed, and in the fourth quarter, micro-sized companies with less than 10 employees were surveyed and reported on.

Q4 2011 Survey Results: Micro-sized Companies (<10 Employees)

• The 205 companies surveyed employ approximately 909 people.

• Has your company expanded or downsized in the last 12 months? For companies surveyed in Q4 2011, the same percentage of companies expanded as downsized in the year prior to their survey, unchanged from the Q4 2010 results.

• Do you anticipate a business expansion or downsize in the next 12 months? Twenty per cent of the companies surveyed in Q4 2011 on balance anticipate a business expansion in the 12 months following their survey, similar to the results obtained in Q4 2010.

• Has your company laid off any employees in the last three months? Five per cent of the companies surveyed in Q4 2011 reported they laid off approximately 14 workers in the three months prior to their survey.

• Does your company currently have any vacant positions that need to be filled? In Q4 2011, 21 per cent of the companies had vacant positions that needed to be filled, up from 15 per cent the previous year. The companies reporting vacancies reported 90 positions needed to be filled, up from the 55 vacancies reported by micro-sized companies the previous year. Overall, this equates to a vacancy rate of 9.9 per cent for Q4 2011.

• Once any current vacant positions are filled, do you anticipate total employment at your location will increase, decrease, or stay the same in the next 3 months? In Q4 2011, nine per cent of the companies on balance anticipate employment will increase over the next three months, roughly unchanged from the Q4 2010 results.

• Does your company currently employ any temporary foreign workers? Four per cent of the companies surveyed in Q4 2011 reported they employ approximately 12 temporary foreign workers. These results were similar to the Q4 2010 results.

• Do you anticipate applying for or hiring any temporary foreign workers in the next 12 months? Four per cent of the companies surveyed in Q4 2011 anticipate applying for or hiring approximately 19 temporary foreign workers in the 12 months following their survey.

• What resources does your company use to find applicants? Overall, the most commonly used recruitment method was word of mouth/employee referrals, followed by walk-ins/unsolicited resumes, the Internet, newspapers, and company website/internal postings.

• Has your company had difficulty recruiting qualified employees in the last 12 months? Overall, 26 per cent of the companies surveyed in Q4 2011 reported having difficulty recruiting qualified employees in the 12 months prior to their survey, an increase from Q4 2010 when 17 per cent reported having difficulty.



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• Do you anticipate having more, less, or the same amount of difficulty recruiting qualified employees in the next 12 months? On balance, two per cent of the companies surveyed in Q4 2011 anticipate having more difficulty recruiting qualified employees over the next 12 months.

• Have any employees left your company in the past 12 months as a result of voluntary turnover? Thirty-five per cent of the companies surveyed in Q4 2011 reported employees had voluntarily left their companies in the prior year. Overall, the turnover rate was 16 per cent, unchanged from the previous year.

• Do you anticipate employee turnover will be higher, lower or about the same in the next 12 months? On balance, four per cent the companies surveyed in Q4 2011 anticipate employee turnover will be lower over the next 12 months.

• What strategies is your company currently using to retain employees? Overall, the most commonly used retention strategy for micro-sized companies was a positive work environment, followed by competitive salary, interesting/ challenging work, excellent management/supervision, and learning/growth opportunities.

• Overall, do you anticipate your company will be focusing more, less or the same on employee retention in the next 12 months? Nine per cent of the companies surveyed in Q4 2011 anticipate they will be focusing more on employee retention over the next year.

• What is the top human resource issue or challenge your company is currently facing? Recruitment and availability of qualified labour was the top response, followed by employee retention, organizational effectiveness, employee attitudes/work ethic, employee skill development/ training, and employee satisfaction/ morale.

Job Bank Analysis • For Calgary (city), there were 13,067 job postings on the Job Bank in the fourth quarter of 2011,

advertising for a total of 36,148 positions. Thirty-five per cent (12,651 positions) were sales and service occupations, and 28 per cent (10,242 positions) were trades, transport and equipment operator occupations.

• For the communities surrounding Calgary, there were 2,635 job postings on the Job Bank in the fourth quarter of 2011, advertising for a total of 6,189 positions. Thirty-nine per cent (2,392 positions) were sales and service occupations and 30 per cent (1,880 positions) were trades, transport and equipment operator occupations.

• For the Banff/Canmore area, there were 708 job postings on the Job Bank in the fourth quarter of 2011, advertising for a total of 1,963 positions. Sales and service occupations dominated the Job Bank in the fourth quarter of 2011 accounting for 86 per cent of the total positions. Trades, transport and equipment operator positions accounted for 5.0 per cent of the total positions.

• Since July 21 2009, job postings for Calgary and surrounding area varied from a low of 1,240 postings the week of January 5, 2010 to a high of 3,511 postings the week of September 27, 2011. Job postings for Banff/Canmore area varied from a low of 71 postings the week of December 1, 2009 to a high of 272 postings the week of August 31, 2011.



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THE ECONOMY The Calgary regionʼs economy is affected by global economic activity, economic conditions in the U.S., and economic drivers in the Canadian economy and elsewhere in Alberta.

GLOBAL ECONOMY The economic momentum of the global economy has slowed down considerably during the second half of 2011, mostly due to increased financial volatility. The main risk to a sustainable economic recovery remains the sovereign debt crisis affecting several European Union economies. Growth in Asian economies, which has been the driving force of the economic recovery so far, has also slowed down. Japan has been in a recession for most of 2011 due to unanticipated natural disasters that affected not only Japanʼs production activity, but also the economic performance of Japanʼs trade partners through supply chain disruptions.

“Until at least the middle of the next decade, global growth is likely to slow to around three per cent per year on average – a rate somewhat below the average of the last two decades. A recovery in advanced economies will be more than offset by a gradual slowdown in emerging ones as they mature, with the net result that global growth will slow. But the biggest risk ahead for the global economy is not this slower overall growth in output but a slowdown in average output per capita, which determines how fast living standards can be supported.”1

Global gross domestic product (GDP) increased 3.8 per cent in 2011, following a 5.2 per cent growth in 2010. This level of activity was 0.6 percentage points lower than the 4.4 per cent growth forecasted for this year by the International Monetary Fund (IMF) in its January 2012 World Economic Outlook (WEO) Report. Advanced economies posted growth rates higher than anticipated while growth in emerging and developing economies slowed more than what was forecasted at the beginning of the year (2011).

1 The Conference Board, StraightTalk, Is slow growth too slow? – Special Issue Global Economic Outlook 2012,

November 2011, p.1.



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Figure 1: World Gross Domestic Product (GDP) Growth Forecast

5.2%

3.2%

7.3%

3.8%

1.6%

6.2%

3.3%

1.2%

5.4%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

World Advanced Economies Emerging and DevelopingEconomies

Per

cen

t C

han

ge

2010 2011 2012

Source: International Monetary Fund, World Economic Outlook Report January 2012 Update

Global Growth Trend

Despite the better than anticipated performance of 2011, the Conference Board expects output growth in advanced economies to slow to 1.3 per cent in 2012. Given that production in advanced economies accounts for half of the total global output, it is estimated that this slowdown will deduct about 0.15 percentage points from the world economic growth in 2012.2

The slowdown in advanced economies will also lower the export demand from emerging and developing countries. According to the Conference Board, other factors that could dampen economic growth in these economies include rising commodity prices and inflation, currency appreciation and real estate bubbles in several countries. Reflecting on these factors, output in emerging and developing countries is expected to increase 5.1 per cent in 2012, which will translate into a 0.55 percentage point deduction from total world output growth.

From 2013 forward, economic growth in the advanced economies is expected to return to pre-recession levels, with an annual average growth of two per cent. While growth in emerging economies will slow down compared to historical rates, it is still expected to be double that of advanced economies. All in all, global output is expected to increase on average 3.5 per cent per year from 2013 to 2016. World GDP growth is then expected to slow down and average 2.7 per cent annually from 2017 to 2025.


November 2011, p.2.



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Figure 2: Contribution to Annual Average World GDP Growth by Region

The long-term average growth rate of an economy plays an important role in determining the economic growth capacity of that economy. The long-term growth trend in turn depends on the economyʼs labour force, capital capacity and technology base. According to the Conference Board, most countries grow around their long-term trend line and occasionally deviate from it as a result of business cycles.

A recent study by the Conference Board that looks at countriesʼ long term growth trends estimates that the long-term trend in the United States has been approximately three per cent growth annually over the last four decades. Of this growth, around one per cent was due to population growth while the remaining two per cent was due to increased output per capita. Due to downward pressure put on the U.S. economy as a result of the economic recession, economic growth in the U.S. has been lower than the potential growth. According to the Conference Board, this resulted in the, “U.S. economy producing about a trillion dollars less than it could have had it stayed on the pre-recession trend line.”3 Assuming economic growth in the U.S. averages 3.6 per cent over the next four years, this output gap is estimated to reduce by half by 2016. This level of economic growth is also expected to bring the unemployment level down to between 5 and 6 per cent.

“The bigger risk in the United States is that the growth will slow permanently below trend. Due to a weak recovery, businesses and government may fail to bring back into production the human and physical capital that still stands idle, thereby eroding the production base of the economy and its 2.4 per cent trend line.”4


November 2011, p.5. 4 lbid, p.6.



15

However, the most significant change is expected to happen for emerging economies. Economic growth in emerging and developing countries is forecast to average 5.1 per cent by 2012 and slow down to 3.4 per cent from 2017 to 2025, which is significantly lower when compared to historical growth rates. According to the Conference Board, one of the main reasons for the decline in growth rates in emerging countries will be a decline in productivity growth due to an aging population. The Conference Board expects China and Russia to record the largest productivity decreases, as they are the countries with the fastest population declines.

According to the International Monetary Fund (IMF), given the current fragile state of financial systems, high public debts and close to zero interest rates, the three main requirements for policy makers across the world to reestablish confidence and stabilize economic recovery include: fiscal adjustment, liquidity, and financial adjustment. While the basis of these adjustments is the same for all countries, the timing and the extent will depend on the fiscal position of each country as well as the factors affecting economic growth in each country.

• Fiscal adjustment: Particularly advanced economies should have policies in place for a sustained but gradual fiscal consolidation while maintaining adequate stimulus in the economy.

• Liquidity: Monetary policies should be able to support economic growth throughout the fiscal consolidation process as long as inflation expectations are within the target rates set out by the central banks. The IMF states that additional monetary stimulus policies such as quantitative easing might be necessary if the downside risks to economic recovery were to be materialized.

• Financial adjustment: Policymakers should work on financial sector policies that will repair and reform financial systems while maintaining easy access to funding and normalized credit conditions in the short term.

The biggest policy challenge would be for the European government to find policies that will help the region navigate through the financial and sovereign debt crisis. However, given the policy steps already taken at the regional level and in a number of member countries, any room for effective fiscal and monetary policies is becoming more limited, which in turn impacts the consumer and business confidence in the region regarding the state of economic recovery. In a response to the debt crisis in Europe, Standard and Poor (S&P) cut the credit rating of nine European countries, including one of the regionsʼ biggest economies - France. The credit ratings for France and Austria were reduced from AAA, the highest grade, which S&P gives to sovereign debt, to AA+. Germany had the highest rate at AAA among the countries in the region. A reading of AAA means the country has a lower default risk on its debt. The credit ratings for Spain and Portugal were also lowered by two notches to A- and BB-, respectively.

“The European sovereign debt crisis remains the dominant risk to the global outlook. If European leaders and the European Central Bank (ECB) do not act effectively to contain it, the crisis could very well unleash a financial chain reaction that would rapidly spread globally. The final outcome could be as bad, if not worse, than late-2008. To be clear, we are heading for this outcome unless euro-zone leaders change their current approach and their resistance to bold decisive action.”5

At the recent December 9, 2011 summit, the European Council agreed to draft a new treaty for more strict economic integration policies, but the United Kingdom, the regionʼs third largest economy, opted out of the treaty. Member countries in favor of the new treaty agreed that, all major economic policy reforms planned by euro-area Members will be jointly discussed and coordinated so as to establish benchmarks for best practice. However, it might take some time to negotiate and finalize the treaty.

5 TD Economics, Quarterly Economic Forecast, Global Economic Outlook Walking in a Minefield, December 14, 2011,

p.1.



16

The ECB also conducted a 489 billion euro three-year long-term refinancing operation (LTRO) to decrease the risk of a credit crunch among the banks in Europe. A second LTRO is scheduled for February 2012 that will accept a wider range of collateral. LTRO offers banks three-year loans at a discounted rate but asks for a wider than normally accepted range of collateral.

“Even with the support of cheap money from the ECB, the economic outlook for the Eurozone remains uncertain. Growth in southern nations is expected to be weighed down by fiscal austerity, private-sector deleveraging, and severe structural unemployment. Portugal and Greece are expected to remain in recession until mid-2012 and early- 2013. In Italy and Spain, fiscal adjustment and increased tensions surrounding banks will likely act as a drag on already-soft activity.”6

The International Monetary Fund expects total growth in the Euro Area to be 1.6 per cent in 2011. Economic growth for 2012 is expected to fall into negative territory, with an anticipated GDP decline of 0.5 per cent. The unemployment rate in the region reached 10.4 per cent in December 2011, hitting the highest rate since the euro was launched in 1999. Across the region, the highest unemployment rate was recorded in Spain (22.9 per cent) while Austria posted the lowest rate (4.1 per cent).

Asia Pacific Region

While Asia-Pacific economies are generally insulated from the impacts of debt crisis in the European Union, economic growth in the region is also expected to slow down. The IMF expects economic growth in the developing Asia economies7 to be 7.9 per cent in 2011 as a whole, compared with the 9.5 per cent growth recorded in 2010. Over the next two years, growth is expected to average 7.5 per cent annually in the region. China and India continue to be the main powerhouses in the region.

Real GDP growth in China came in at two per cent in the final quarter of 2011 and the pace of growth is expected to moderate over the near term. The IMF estimates total GDP growth for 2011 to be 9.2 per cent in China, compared with a 10.4 per cent growth recorded in 2010. The main priorities for the policy makers in China remain keeping inflation and the housing market under control.

According to Deloitte Research, developments in Chinaʼs housing market are putting stress on local governments and consequently banks. The main channel through which a decline in housing prices impacts local governments would be a decline in government revenues. Estimates show that almost half of local government revenues in China come from the sale of land. With house prices on the decline, demand for land will also decline and there will be a surplus of land that will push government revenues down and will make it harder for governments to service their debt. This in turn will also impact the banks that hold local government debt.

Second, activity in the residential construction sector in China accounts for approximately seven per cent of total GDP in the country. Moreover, activity in this sector creates a demand for home-related products and financial services. Any decline in the housing market will have negative spillovers on other sectors of the economy and on total GDP as well.

6 Deloitte Research, Global Economic Outlook – Q1 2012, January 24, 2012, p.14. 7 Developing Asia region includes China, India, Indonesia, Malaysia, Philippines, Thailand and Vietnam.



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“Meanwhile, flaws in China's growth model are becoming obvious. Falling property prices are starting a chain reaction that will have a negative effect on developers, investment, and government revenue. The construction boom is starting to stall, just as net exports have become a drag on growth, owing to weakening US and especially Eurozone demand. Having sought to cool the property market by reining in runaway prices, Chinese leaders will be hard put to restart growth.”8

After hitting a high of 6.5 per cent in July 2011, price increases in the all-items Consumer Price Index (CPI) in China declined to 4.2 per cent in November 2011. Over the same period, producer prices were up 2.7 per cent. According to Deloitte Research, recent data on CPI suggests that inflation remains within the target control range and monetary policy can be loosened to stimulate economic activity without causing inflation at this point. Against this backdrop, the Chinese economy is expected to grow 8.2 per cent in 2012 and by a further 8.8 per cent in 2013.

“Chinaʼs economy is likely to grow at less than 9 percent in 2012 — a relatively slow rate of growth compared to recent history. Inflation is likely to be lower in 2012 than in 2011, and policy is likely to be a bit more accommodating than in 2011. The biggest challenge for policy makers is likely to be a sharper-than-expected decline in property market investment as well as a sharp increase in defaults by property developers and local governments. If these problems rear their heads, it is possible that the government will decide to engage in more aggressive policy. This could include faster money supply growth as well as fiscal stimulus. It could also involve bailouts of banks faced with large loan losses.” 9

Inflationary pressures are also a concern for the Indian economy. The Reserve Bank of India has been stressing that the monetary policyʼs main goal is to maintain a stable inflation even at the cost of economic slowdown. Fortunately, inflation has been moderating over the last few months and the downward trend is expected to continue throughout 2012. According to the Reserve Bank of India, the slowdown in inflation was mainly a result of a decline in vegetable prices and pricing power of the manufacturers.

“After battling high inflation for months, there seems to be some respite. The central bankʼs policy to trade growth for lower inflation seems to be paying off. Although a slowdown in growth was a planned outcome of the 13 interest rate increases since March 2010, the magnitude and causes of the slowdown are reasons for concern. A slump in manufacturing and negative growth in capital expenditure are understandable in an environment of high interest rates. However, the compounding effects of a weak global economic milieu will make it harder for the central bank to balance the conflicting demands of controlling inflation and maintaining adequate economic growth.”10

Indiaʼs economy grew 6.4 per cent in the second quarter of 2011, the lowest rate of growth in the last nine quarters. This slowdown was mainly driven by a sharp contraction in the manufacturing sector, uncertainty around investment, and high interest rates. This rate of GDP growth was also below the historical trend, which is estimated to be around 8.5 per cent on average during 2005-06 and 2007-08. According to the Reserve Bank of India, the trend growth rate is currently about 8.0 per cent and indicates a structural decline in growth rate of the Indian economy compared to the 2005-2008 period.11

8 The Guardian, Economics Blog, The Global Economic Outlook for 1012 isnʼt Pretty, December 15, 2011,

http://www.guardian.co.uk/business/economics-blog/2011/dec/15/global-economic-outlook-2012-roubini 9 Deloitte Research, Global Economic Outlook – Q1 2012, January 24, 2012, p.23. 10 Ibid, p.30. 11 Reserve Bank of India, Publications, Macroeconomic and Monetary Developments, January 23, 2012.



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Although this slowdown in Indiaʼs economic growth was previously anticipated, recent data shows a deeper than anticipated moderation, mostly due to a weakened global growth. Most forecasting agencies have revised their outlook for the Indian economy, reflecting on slower than anticipated growth and a moderation in business confidence as measured by the Reserve Bank of Indiaʼs industrial outlook survey. The IMF expects real GDP in India to grow by 7.0 per cent in 2012 and 7.3 per cent in 2013.

“In the final quarter of 2011-12 and going forward into 2012-13, the Indian economy has to deal with several persistent challenges as well as some new ones. While inflation is showing welcome signs of moderation, which creates some space for monetary policy to address growth concerns, it is important to remember that demand-supply mismatches are never very far from the surface in a variety of commodities and services, not to mention human capital. A sharp inflationary response to even a modest recovery in growth is a persistent risk, which materialised in late 2009, and against which monetary policy has to be constantly on guard. Beyond this, adverse global conditions, both in terms of trade and capital flows amidst a hostile oil price environment have clouded growth and stability prospects for the past three years.”12

12 Reserve Bank of India, Publications, Macroeconomic and Monetary Developments, January 23, 2012.



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U.S. ECONOMY The economic performance of the U.S. economy has been very sluggish for the first part of 2011, which makes the possibility of a second dip a very likely scenario. The underperformance of the U.S. economy combined with the risks related to Europeʼs continued sovereign debt crisis almost pushed all the major forecasting agencies to downgrade their outlook for the U.S. economy, suggesting once again that the road to recovery for the U.S. will be a long and slow one.

However, economic data over the last few months continued to surprise on the good side. What was more encouraging was the increased momentum was widespread across many indicators. Real gross domestic product (GDP) in the U.S. increased at an annual rate of 1.8 per cent in the third quarter of 2011. This followed an increase of 1.3 per cent in the second quarter and 0.4 per cent in the first quarter of the year.

“The US economic data switched from consistently disappointing expectations to beating market forecasts. To be sure, forecasters clearly ratcheted down their expectations for US growth during the summer months; however, increasingly, there is evidence that the economy has regained its momentum. The outperformance in the data reported in November was broad based including industrial production, retail sales, housing starts, and sales.”13

The acceleration in real GDP during the third quarter of 2011 mainly reflected positive contributions from personal consumption expenditures, nonresidential fixed investment, exports and federal government spending. While declines in private inventory investment combined with deductions in state and local government spending subtracted from the third quarter growth, these negative contributions were mainly offset by the improvements in other sectors.

Real investment spending on equipment and software increased by 16.2 per cent in the third quarter of 2011 after posting a gain of 6.2 per cent in the previous quarter. Investment in equipment and software has been on an upward trend since the second quarter of 2009. According to the Conference Board of Canada, one of the reasons why business investment spending has been increasing at a quicker pace compared to the previous recoveries was the already low levels of investment spending prior to the recession.

“This pent-up demand explains why investment spending has been expanding at such a brisk pace over the past two years. Even as firms gradually address their equipment needs, strong underlying fundamentals will ensure that spending on both equipment and structures remains strong over the near term. The solid fundamentals include the low cost of capital and healthy balance sheets.”14

However, the main driver of the third quarter growth was the gains recorded in household spending. Real personal consumption expenditures increased 1.7 per cent in the third quarter of 2011, following a 0.7 per cent increase recorded in the previous quarter. In other words, this means consumer spending contributed 1.24 percentage points to the third quarter real GDP growth, providing the largest contribution across all factors. This is particularly good news for the U.S. economy because it shows that households might finally be starting to spend again which could push economic momentum even higher. A number of factors including weak labour and housing markets, and low confidence have been restraining consumer spending so far. The fact that consumer spending continued to increase over the last few months shows that consumers are regaining their confidence and will continue to support economic growth through spending over the medium term.

13 RBC Economics, Economic and Financial Market Outlook, December 2011, p.2. 14 The Conference Board of Canada, Economic Forecast, U.S. Outlook – Autumn 2011, p.4.



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“The bounce back in sales was due in part to the alleviation of supply constraints that has slowed growth in the first half of the year. Vehicle sales in particular, were hit hard by the Japanese earthquake and tsunami and some rebound was expected. Still, the fact that overall spending increased so robustly amidst the heightened political and financial turmoil of the summer reveals an economy that has proved to be more resilient to the crisis of confidence than many had expected.”15

Supporting the recent gains in consumer spending, the Conference Board Consumer Confidence Index16 increased to 64.517 in December 2011, up from 55.2 the previous month. Consumersʼ assessment of current conditions was also up in December. The proportion of respondents indicating that conditions are “good” increased to 16.6 per cent from 13.9 per cent in the previous month, while those indicating conditions are “bad” declined to 33.9 per cent in December from 38.0 per cent in November 2011.

Consumers are more optimistic about the state of the economy going forward. The share of consumers expecting business conditions to improve over the next six months increased from 13.7 per cent in the previous month to 16.7 per cent in December 2011, while those expecting conditions to worsen declined from 16.1 per cent to 13.4 per cent over the same period. Consumers also expect more jobs to be available over the next six months, with 13.3 per cent in December anticipating more jobs in the months ahead, up from 12.4 per cent recorded in November. Consequently, the share of consumers expecting an increase in their income was also up from 14.1 per cent in November to 17.1 per cent in December 2011.

“After two months of considerable gains, the Consumer Confidence Index is now back to levels seen last spring (April 2011, 66.0). Consumersʼ assessment of current business and labor market conditions improved again. Looking ahead, consumers are more optimistic that business conditions, employment prospects, and their financial situations will continue to get better. While consumers are ending the year in a somewhat more upbeat mood, it is too soon to tell if this is a rebound from earlier declines or a sustainable shift in attitudes.”18

The Conference Board Leading Economic Index (LEI) increased 0.5 per cent month-over-month to 118.019 in November 2011, following a 0.9 per cent increase in October. The LEI is an index of ten major economic indicators that are used to signal turning points in the business cycle and hence are treated as an indicator of future economic activity. Novemberʼs increase in the LEI was mainly supported by positive contributions from financial indicators, building permits and consumer expectations, which offset the negative contributions from the average workweek for production workers and the index of supplier deliveries.

“Novemberʼs increase in the LEI for the U.S. was widespread among the leading indicators and continues to suggest that the risk of an economic downturn in the near term has receded. Interest rate spread and housing permits made the largest contributions to the LEI this month, overcoming a falling average workweek in manufacturing, which reversed its October gain. The CEI also rose on improving employment and personal income although industrial production fell in November.”20

15 TD Economics, Quarterly Economic Forecast, U.S. Outlook – Progress Amid Pitfalls, December 14, 2011, p.1. 16 The Conference Board Consumer Confidence Index is based on a representative sample of 5,000 U.S. households. 17 1985 = 100 18 The Conference Board, The Conference Board Consumer Confidence Index Improves Again, December 27, 2011.s 19 2004 = 100 20 The Conference Board, News Release, The Conference Board Leading Economic Index (LEI) for the U.S. Increases,

December 22, 2010.



21

While the LEI for the U.S. increased through November 2011, the pace of growth was slower compared to a year ago. In the six-month period ending November 2011, the LEI increased 2.8 per cent, compared to a 3.1 per cent growth rate recorded during the previous six months.

The Conference Board Coincident Economic Index (CEI), a measure of the current economic activity, was essentially unchanged in November 2011. Between May and November 2011, the CEI increased 0.8 per cent, a slower rate compared to the 1.2 per cent growth recorded for the previous six months. However, according to the Conference Board, “the strengths among the coincident indicators have remained widespread, with all components advancing over the past six months.”21

However, the short-term outlook for the U.S. economy cannot be based solely on the recent pick up in economic activity. It has to be considered in the context of recent developments in the world economy, particularly the state of the European economies and the anticipated demand from developing economies. According to TD Economics, two major risks to the U.S. economic outlook include the expanding financial crisis in Europe and the fiscal restraint.

“The economic outlook is clouded by the political landscape, both in the U.S. and in Europe. While we remain hopeful that policymakers in Europe will avoid a catastrophic breakup of the euro and that U.S. policymakers will come up with a deal to avoid raising taxes in January, the dependence of these outcomes on political decisions makes this an even more uncertain outlook than usual.”22

In the face of the ongoing weakness in the U.S. economy during the first half of the year, the Federal Reserve (Fed) announced in August 2011 that it was committed to keep the federal funds rate close to zero until at least mid-2013. A month later in September 2011, the Fed announced another bond program dubbed “Operation Twist” that could be used as a tool to lower the long-term interest rates. Under this program, the Fed plans to sell short-term bonds and buy longer-term (up to 30 years) bonds, which will push the price of long-term bonds up and lower the interest rate on them. The Fed expects to stimulate housing demand through lower mortgage rates without injecting more money into the system.

“If the Fed trades in some of its shorter-dated bonds for more of the longer-dated alternatives, demand for the longer-dated variety will exceed supply. This in turn will drive up the price of those bonds, which depresses the "yield" – the effective rate of return the holder of the bond gets on their investment. The yield determines the interest rate. Lower long-term interest rates will lead to lower 25-year mortgage rates, car loans and other bank lending rates.”23

Against this backdrop, most recent forecasts for real GDP in the U.S. range between 1.5 per cent and 1.8 per cent for 2011 as a whole. Unfortunately, the recent pick up in the economy is not expected to last over the next year, putting a drag on the economic growth for 2012. TD Economics and the International Monetary Fund (IMF) expect real GDP in the U.S. to expand by 1.9 per cent in 2012. In contrast, the Conference Board of Canada and RBC Economics are more optimistic and forecast a growth of 2.5 per cent for the U.S. economy in 2012. It should be noted that even at a 2.5 per cent growth rate, the Conference Board of Canada states that this level of growth would be, “well below the rate that would normally occur at this stage of the business cycle.”24

21 The Conference Board, News Release, The Conference Board Leading Economic Index (LEI) for the U.S. Increases,

December 22, 2010. 22 TD Economics, Quarterly Economic Forecast, U.S. Outlook – Progress Amid Pitfalls, December 14, 2011, p.4. 23 Phillip Inman, The Guardian, What is Operation Twist?, September 21, 2011.

http://www.guardian.co.uk/business/2011/sep/21/operation-twist-federal-resrve-gamble-us-economic-stimulus 24 The Conference Board of Canada, Economic Forecast, U.S. Outlook – Autumn 2011, p.1.



22

“While ending on a high note is always a good thing, the fact remains the US economy is having a very hard time recovering from the great recession of 2008-09. All in all, there is reason to be optimistic about the US in the New Year, although with the European financial crisis still percolating and the Chinese economy showing signs of cooling, a lot of uncertainty remains as well.”25

TD Economics expects consumer spending to expand an average of 2.2 per cent annually between 2011 and 2013. Business investment is expected to increase 8.8 per cent this year (2011) and slow down to 5.9 per cent in 2012. The U.S. economy is expected to add 1.3 million jobs in 2011 as a whole, which should bring the unemployment rate from 9.6 per cent in 2010 down to 8.9 per cent this year (2011). Employment is then projected to increase 1.1 per cent in 2012 and 1.5 per cent in 2013.

Table 1: U.S. Economic Outlook (% change, period-over-period annualized)

Category Q1* Q2* Q3* Q4 Q1 Q2 Q3 Q4 2011 2012 2013

Real GDP 0.4 1.3 2.0 3.2 1.8 0.9 2.0 2.5 1.8 1.9 2.3

Consumer Expenditure 2.1 0.7 2.3 2.7 2.0 1.8 1.9 2.4 2.3 2.1 2.2

Business Investment 2.1 10.3 14.8 5.9 3.6 2.9 3.8 7.6 8.8 5.9 6.9

Personal Disposable Income 5.2 28.0 0.2 2.8 3.9 3.1 3.9 4.6 3.4 3.0 3.6

Housing Starts (million units) 0.58 0.57 0.61 0.62 0.63 0.65 0.66 0.68 0.60 0.65 0.76

Exports 7.9 3.6 4.3 6.5 3.4 1.8 3.8 4.6 6.9 3.9 6.3

Imports 8.3 1.4 0.5 3.9 3.3 3.8 4.0 4.3 4.9 3.2 5.1

Employment 1.3 1.4 0.9 1.3 1.1 0.8 1.4 1.6 1.0 1.1 1.5

Unemployment Rate (%) 8.9 9.1 9.1 8.8 8.7 8.8 8.8 8.8 9.0 8.8 8.6

Personal Saving Rate (%) 5.0 4.8 3.8 3.8 3.8 3.6 3.6 3.7 4.4 3.7 3.2

Consumer Price Index (Y/Y) 2.2 3.3 3.8 3.4 2.4 1.7 1.3 1.4 3.2 1.7 1.7

* Actual or most recent data

Annual2011

Source: TD Economics, Qaurterly Economic Forecast, December 14, 2011

2012

Another encouraging development for the U.S. economy over the last few months has been the continued employment gains. Total non-farm payroll employment in the U.S. increased by 200,000 in December 2011, well above the market expectations of a 155,000 gain. Decemberʼs gain was mainly driven by the new jobs created by the private sector (+212,000), while the government sector continued to shed jobs (-12,000). This also brought the total number of jobs created in the U.S. economy during 2011 as a whole to 1.7 million (December 2010 to December 2011). According to TD Economics, this was the largest increase recorded for annual employment gains since 2006 in the U.S. economy.

“This (Employment Situation Summary December 2011 Report) is a good report on many levels, both beating expectations and providing a number of encouraging details for the state of the economy. Perhaps most encouraging, gains in employment were augmented by increases in average hours, pushing aggregate hours up by a strong 0.5% (6.1% annualized). Moreover, the acceleration in earnings in December in combination with job growth in relatively high paying sectors such as manufacturing should help to give support to spending growth in the early quarters of next year.”26

25 ATB Financial, Daily Economic Comment, US Economy Closes 2011 on a Decent Note, January 3, 2012. 26 TD Economics, Data Commentaries, U.S. Employment, January 6, 2012.



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More than three quarters of the new jobs created in December 2011 were concentrated in the services-producing sector. Within this sector, the largest gains were recorded in the transportation and warehousing (+50,000), education and health services (+29,000) and retail trade (+28,000) industries. However, the majority of the gains in the transportation and warehousing industry occurred in the couriers and messengers industry (+42,000), which the U.S. Bureau of Labour Statistics states could be due to seasonal hiring.

“Nonetheless, before we get too excited, there is also room for caution. A major contributor to the gain in service sector employment was a 42K increase in “couriers and messengers.” For the last three years there has been a strange seasonal jump in this category, which is subsequently unwound in January. It could be that changes in the seasonal pattern of employment over time are leading to an overestimation of payrolls employment in December.”27

On the goods-producing side, manufacturing employment increased by 23,000 in December 2011, following four months of almost no change. All of the gains in the manufacturing sector were in the manufacturing of durable goods. Employment in the construction sector was also up 17,000 from a month earlier in December 2011. Mining employment rose by 7,000 bringing the number of total jobs created in this industry over 2011 to 89,000 jobs.

Equally positive developments recorded in December were the gains in the average workweek and average hourly earnings of private nonfarm payroll employees. The average workweek for all employees increased to 34.4 hours in December 2011, up 0.1 hour from the previous month. Average hourly earnings for all employees on private nonfarm payrolls increased 0.2 per cent, or by four cents, to $23.24 U.S. per hour in December 2011.

In light of the gains in employment, both the number of unemployed persons and the unemployment rate continued their downward trend in December 2011. The seasonally adjusted unemployment rate stood at 8.5 per cent in December 2011, down by about a full one percentage point from December 2010. Among the major worker groups, the unemployment rate for men 20 years and over declined to 8.0 per cent, while there was little change in the unemployment rate for adult women.

Despite the decline in the unemployment rate, long-term unemployed persons (those jobless for 27 weeks or more) still accounted for close to half of the total unemployed in December 2011. The average duration of unemployment declined to 40.8 weeks, while the median duration of unemployment stood at 21.0 weeks in December. As discussed in the Third Quarter 2011 Report, together the average and median duration of unemployment provide information on how long a person has been out of work. An increasing gap between these two measures means that a large proportion of workers experience unemployment that is much longer than the average duration of unemployment.

“It's difficult to convey just how anomalous the current rate of long-term unemployment is by historical standards. Through the end of the 1980s, for the most part, the average length of joblessness hovered between 10 and 15 weeks. Until May 2009--more than 736 months of data--it never exceeded 21.2 weeks, the high mark it hit during the downturn of the early 1980s. Today, after rising more or less steadily since mid 2008, it's nearly twice that.”28

27 TD Economics, Data Commentaries, U.S. Employment, January 6, 2012. 28 The Lookout, Average length of unemployment now at 60-year high, Zachary Roth, October 7, 2011.



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Being without a job for a long period of time has several negative effects, both on a personal level as well as on the economy.

“…workers' skills tend to atrophy as they lose touch with developments in their field. Older workers become increasingly likely to give up searching for work. With rates of long-term unemployment [in the U.S.] as high as they are now, the jobless threaten to become a semi-permanent class, exacerbating growing inequality. And that's leaving aside the psychological and emotional toll of going for so long without work…”29

The gap between the average and median duration of unemployment in the U.S. has been fluctuating between five and ten weeks between 2001 and 2008. However, it has been on an upward trend since the second half of 2009 and hit 19.8 weeks in December 2011, the highest gap recorded over the last ten years. This shows that the number of people who are unemployed for longer than the average duration outnumbers the number of people who are out of work for less than the average duration.

Figure 3: Gap Between Average and Median Duration of Unemployment in the U.S.

(seasonally adjusted)

0

5

10

15

20

25

Jan-01

Jun-01

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Jun-06

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Weeks o

f U

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t

Labour demand in the U.S. as measured by the Conference Board Help Wanted OnLine (HWOL) Data Series increased by 93,800 advertised vacancies in December 2011, following a decline of 76,000 in November and a decline of 14,000 in October. The Conference Board HWOL series provide measures of the levels and rates for online advertised vacancies and serves as an indicator of labour demand at the national, regional, State and metropolitan area levels. With Decemberʼs gain, the average monthly gain for 2011 was estimated to be 22,000.

29 The Lookout, Average length of unemployment now at 60-year high, Zachary Roth, October 7, 2011.



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“The December increase was a welcome lift for labor demand after a lackluster year. Labor demand struggled in 2011. After a promising start in the early months of the year, labor demand had been basically flat since August.”30

The supply/demand ratio (the gap between the number of unemployed persons and the number of online advertised vacancies) for the U.S. stood at 3.4 in November 2011 (the latest month for which unemployment numbers are available), indicating that there were approximately four unemployed workers for every online advertised vacancy. This translates into 9.4 million more unemployed workers than there were advertised vacancies across the country.

Regionally, North Dakota was the only state in which the number of advertised vacancies exceeded the number of unemployed for a supply/demand ratio of 0.88. Other states with the next lowest supply/demand ratio in December included Nebraska (1.27), South Dakota (1.40), Vermont (1.60) and Alaska (1.83). The highest supply/demand ratio was registered in Mississippi (7.73), where there were over seven unemployed persons for every online advertised vacancy. However, it should be noted that the supply/demand ratio provides a measure of the relative tightness of the labour market, and does not suggest that the occupations of the unemployed will align directly with the occupations high in demand.

Housing Market

Three years after the economic recession, the U.S. housing market is still trying to get back on its feet. Prices for new and existing homes continued to trend downwards during the summer and the number of underwater mortgages remained on an upward trend. According to the Conference Board of Canada, out of the 51 million mortgaged homes in the U.S., close to 15 million are underwater31 and 3.7 million are seriously delinquent.

“The economy is affected in a number of ways by the huge number of homeowners who are deeply underwater. These homeowners are forced to spend a high portion of their income servicing debt each month, a development that leaves less money available to spend on other goods and services. It has been estimated that, for every dollar decline in home value, homeowners spend 6 cents less on other products, leading to cumulative decline of $430 billion in household spending since the housing bubbleʼs 2008 peak. When homeowners are forced into foreclosure, possibly because they have lost their jobs, it dumps more homes on the market and drives down prices even more.”32

However, despite mediocre developments during the first half of the year, recent data shows that the U.S. housing market might be able to finish off 2011 on a positive note after all. Privately-owned housing starts in the U.S. in November 2011 stood at a seasonally adjusted annual rate of 685,000, above the market expectations of 635,000. This represents an increase of 9.3 per cent from a month earlier and an increase of 24 per cent year-over-year. Novemberʼs gain in total housing starts was mainly driven by a significant gain in multi-family starts.

Multi-family starts increased approximately 25 per cent month-over-month to 238,000, reaching the highest level of multi-family starts since September 2008. Single-family starts posted an increase of 2.3 per cent from October and reached a rate of 447,000 in November 2011. According to TD Economics, there has been little change over the past year and a half in single-family starts.

30 The Conference Board, News Release, Online Labour Demand Rises 93,800 in December, The Conference Board

Reports, January 4, 2012, p.1. 31 Underwater mortgages refer to those where the value of the home is less than the mortgage. 32 The Conference Board of Canada, Economic Forecast, U.S. Outlook Autumn 2011, p.4.



26

“The multi-family segment stole the show in November with a strong gain in construction activity. While this is always a more volatile series, the trend in multi-family construction is undeniable. The increase in multifamily reflects a move in tenure choice away from homeownership and towards renting. With the homeownership rate expected to trend down further, apartment construction is likely to continue to rise as a share of total housing starts. Single-family construction, on the other hand, will remain moribund until foreclosure inventories are whittled down to more normal levels, a process that is likely to take at least another year to play out.”33

Building permits were up 5.7 per cent from Octoberʼs rate of 644,000 to a seasonally adjusted annual rate of 681,000 in November 2011. This was also 21 per cent higher compared to the same month in 2010. While it takes some time for the trend in building permits to translate into housing starts, building permits data is still considered a significant indicator of future construction activity as it shows buildersʼ intention over the medium term. As was the case with housing starts, the main driver of Novemberʼs gain in building permits was the 14 per cent increase in multi-family permits. In comparison, single-family permits increased 1.6 per cent month-over-month in November 2011.

Existing home sales in the U.S. increased four per cent month-over-month to 4.42 million in November 2011, above the market expectations of 5.06 million sales. Single-family sales accounted for approximately 90 per cent of total sales in November. At the regional level, the largest gain was recorded in the Northeast (+9.8 per cent), which was followed by the Mid West (+4.3 per cent), West (+3.6 per cent) and South (+2.4 per cent). The supply of homes available for sale at the current sales ratio declined from 7.7 months to 7.0 months in November 2011, which was the lowest mark over the last two years.

However, the trend in existing home sales data has to be considered against the data revisions for national existing home sales from 2007 to 2010 released by the National Associations of Realtors (NAR) in December 2011. The revisions reduced the number of existing homes sales and the inventory of homes for sale by an average of 14.3 per cent from 2007 to 2010. Consequently, the starting level for 2011 was also reduced to reflect these revisions. Particularly, the revisions had a significant impact for the Northeast region, which saw the level of sales going down by an average of 31.4 per cent from what the data had showed previously.

“These revisions have important consequences for the housing outlook. In the near-term, the lower sales rate also means a longer time for the shadow supply of distressed sales to clear the market. However, the revisions also imply more pent-up demand for housing than previously estimated. A much lower rate of housing turnover relative to the stock of housing means more room for sales growth in order to get back to trend. Finally, at the regional level, the disproportionate decline in sales in the Northeast has eroded some of the regionʼs advantage in having fewer foreclosures than other regions. A more complete picture of the regional housing outlook will depend on revisions to state-level sales, which are scheduled to be released in February.”34

Taking into consideration the latest trend in housing starts and the revisions to the existing home sales data, TD Economics expects housing starts in the United States to total 600,000 in 2011. Total housing starts are then forecast to reach 750,000 units in 2012 and 760,000 units in 2013. On the more optimistic side, the Conference Board of Canada expects total housing starts in the U.S. to reach 750,000 units in 2012 and 960,000 units in 2013 after finishing off the year (2011) at 590,000 units. The Conference Board of Canada forecasts total housing starts to increase on average 15 per cent annually from 2014 to 2016 and hit around 1.63 million units by 2016.

33 TD Economics, Data Commentaries, U.S. Housing Starts, December 20, 2011. 34 TD Economics, Observation, What to make of the revisions to U.S. existing Home sales, January 4, 2012, p.1.



27

Figure 4: U.S. Housing Starts, Seasonally Adjusted Annual Rate

(thousands of housing units)

0

500

1,000

1,500

2,000

2,500

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

To

tal H

ou

sin

g S

tart

s (

000's

)

Historical TD Economics Forecast Conference Board of Canada Forecast

Source: U.S. Census Bureau, New Residential Construction, TD Economics and Conference Board of Canada



28

CANADIAN ECONOMY Following a contraction of 0.5 per cent in the second quarter of 2011, the Canadian economy advanced by a healthy 3.5 per cent in the third quarter of 2011. This level of economic growth was similar to the first quarter of 2011. By comparison, real gross domestic product (GDP) in the U.S. increased by 1.8 per cent in the third quarter of 2011.

“Canadian third quarter GDP growth was expected to be healthy and it still managed to beat expectations. For the year as a whole Canada is on pace to expand by somewhere around 2-2.5%—down from 3.2% in 2010, but not bad considering the state of the global economy and the woes experienced by many of our major trading partners over the year.”35

The economic momentum in Canada has slowed down since July 2011, mostly due to external factors and uncertainties around world economic growth. The Bank of Canada expects economic growth to remain modest through the middle of next year (2012) before rebounding and picking up as the global market outlook improves.

Figure 5: Canada Real Gross Domestic Product

(annualized percentage change from preceding period)

4.1%3.9%

2.3%

1.1%

-0.7%

0.3%0.4%

-3.1%

-7.0%

-2.8%

-0.9%

4.9%

5.8%

2.0%2.5%

3.1%3.6%

-0.5%

3.5%

2.0%1.7%

0.5%

1.8%

2.4%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

2007

Q1

2007

Q2

2007

Q3

2007

Q4

2008

Q1

2008

Q2

2008

Q3

2008

Q4

2009

Q1

2009

Q2

2009

Q3

2009

Q4

2010

Q1

2010

Q2

2010

Q3

2010

Q4

2011

Q1

2011

Q2

2011

Q3

2011

Q4

2012

Q1

2012

Q2

2012

Q3

2012

Q4

% C

ha

ng

e

Historical Forecast as of December 2011

Source: Statistics Canada, Canadian Economic Accounts, TD Economics Quarterly Economic Forecast

Despite a slower economic momentum, both the goods-producing and services-producing industries advanced in the third quarter of 2011. The largest gains were recorded in the energy sector, along with manufacturing, construction, transportation and warehousing, and wholesale trade industries.

Canadian third quarter GDP growth was mainly driven by an increase in exports and housing investment. Consumer spending and government expenditure also advanced slightly in the third quarter of 2011. Business investment in plants and equipment contracted in the third quarter, its first quarterly decline since

35 ATB Financial, Daily Economic Comment, Canadian Economy Finds Its Groove in Q3, November 30, 2011.



29

2009.36 Declining business confidence due to the financial crisis in Europe was likely a major factor in the drop in machinery and equipment investment.

According to the Conference Board of Canadaʼs Autumn 2011 Index of Business Confidence, the number of business leaders who expect economic conditions to worsen in the next six months outnumbered those who think conditions will get better for the first time since the beginning of 2009. Reflecting concerns in both micro and macro levels, the Index of Business Confidence37 fell for the third consecutive quarter to 92.6 in the final quarter of 2011. While this level of confidence was well below the 103.7 level in the previous quarter and 109.5 level in the fourth quarter of 2010, it was still ahead of the 68.9 mark experienced during the financial crisis of 2008.

In the final quarter of 2011, only 13 per cent of the respondents to the Business Confidence Index Survey indicated that they expect economic conditions in Canada to improve over the next six months. This was down from 30.6 per cent the previous quarter. The number of respondents expecting conditions to worsen also increased 18 percentage points to 35 per cent in the fourth quarter of 2011.

While Canadian businesses have concerns regarding the future of both their own firms and the Canadian economy at large, they are more optimistic at the micro level. This has been the trend among Canadian businesses for the past four quarters. When asked about their firms profitability over the next six months, the share of respondents expecting an improvement declined from 46.2 per cent to 38.1 per cent in the final quarter of 2011, while the share of respondents expecting a decline increased by more than 15 percentage points to 27 per cent.

A lower optimism among Canadian businesses was also echoed in the Bank of Canadaʼs Autumn 2011 Business Outlook Survey. While on balance, 30 per cent of the firms surveyed reported an increased sales volume over the past 12 months, they did not expect this rebound in sales to continue. The balance of opinion38 on future sales growth over the next 12 months fell to six per cent due to weaker expectations regarding the U.S. and the world economic outlook. The majority of respondents expecting an increase in sales growth indicated that they plan to achieve this through new products rather than an increase in demand.

“Responses to the autumn survey point to less optimism among firms than in the summer survey, as weaker expectations for U.S. growth and a more uncertain global outlook weigh on business sentiment. Indicators of future business activity, capacity constraints and price pressures have all moved down from the levels recorded in the previous survey.”

The proportion of firms indicating that they would have difficulty meeting an unexpected increase in demand declined in the Autumn 2011 survey, although it still remains near the historical average. According to the Bank of Canada, “the change was driven by fewer reports of capacity pressures among firms in Central and Eastern Canada.”39

A quarter of the survey respondents also indicated that labour shortages restrict their ability to meet an unexpected increase in demand. While this is unchanged from the previous survey, it remains below the average for the survey. The survey results also show that a shortage of labour is more of a problem for firms in the goods-producing sector where they report difficulty in recruiting skilled workers.

36 Statistics Canada, The Daily, Canadian Economic Accounts, Third Quarter 2011 and September 2011, November 30,

2011. 37 2002 = 100 38 The balance of opinion is defined as the percentage of firms expecting faster growth minus percentage expecting

slower growth. 39 Bank of Canada, Business Outlook Survey – Autumn 2011, p.2.



30

In line with the capacity utilization problems reported in the Business Outlook Survey, only 38 per cent of the respondents to the Conference Board of Canadaʼs Autumn Business Confidence Survey indicated that they operated close to, at or above capacity during the final quarter of 2011. These indicators suggest that there is still a considerable amount of economic slack. The Bank of Canada predicts that the Canadian economy was operating at around 1.25 per cent below its production capacity in the third quarter of 2011, which was substantially higher than what the Bank had anticipated in July 2011.

“Although real GDP will continue to outpace potential output over the next two years, there is still an excessive amount of capacity in the economy—which means it will take a while longer before the economy is operating at full capacity once again.”40

Being a small open-market economy, the near-term prospects of the Canadian economy depend mostly on external factors. Namely, the European debt crisis and the pace of U.S. economic growth are expected to have a significant impact on the Canadian economy.

Due to slower international demand, Canadaʼs trade sector is not expected to contribute much to economic growth over the medium term. Supported by the rebound in the labour and housing markets, domestic demand is expected to be the main driver of economic growth over the medium term. However, the pace of consumer spending growth will be slow due to high levels of household debt.

The Bank of Canada expects the Canadian economy to continue to grow slowly over the medium term. On average, real GDP in Canada is expected to expand 2.1 per cent this year (2011) and 1.9 per cent in 2012. The Bank expects economic growth to pick up to 2.9 per cent in 2013. This rate of growth will be above the potential output growth rate and will also imply a return to full capacity by the end of 2013.

“This base-case projection for the Canadian economy is weaker than in the July Report, with the significantly less-favourable external environment affecting Canada through financial, confidence and trade channels. Domestic demand is expected to remain the principal driver of growth over the projection horizon, although at a more subdued pace than previously anticipated. Household expenditures are now projected to grow relatively modestly, as lower commodity prices and heightened volatility in financial markets weigh on the incomes, wealth and confidence of Canadian households.”

Table 2: Contributions to Canadian Average Annual Real GDP Growth

(Percentage points)

Category 2010 2011 2012 2013

Final Domestic Demand 4.7 2.8 1.8 2.8

Consumption 2.0 1.0 1.2 1.4

Housing 0.7 0.1 0.0 0.1

Government 1.2 0.3 -0.1 0.3

Business Fixed Investment 0.8 1.4 0.7 1.0

Net Exports -2.1 -0.9 0.2 0.1

Exports 1.8 1.2 0.9 1.1

Imports -4.0 -2.1 -0.7 -1.0

Inventories 0.6 0.2 -0.1 0.0

GDP 3.2 2.1 1.9 2.9

Source: Bank of Canada, Monetary Policy Report, October 2011. 40 Conference Board of Canada, Economic Forecast, Canadian Outlook – Autumn 2011, p.37.



31

Bank of Canada Governor Mark Carney recently raised concerns over Canadiansʼ rising household debt. The latest data from Statistics Canada shows that the ratio of debt to personal disposable income, one measure of Canadian householdsʼ financial health, rose to 153 per cent in the third quarter of 2011, from 148.3 per cent a year earlier.

“The concern is that any sudden negative event – such as a jump in unemployment, falling house prices or rising interest rates – could put many thousands of families in financial stress. The debt squeeze also suggests that consumer spending will be muted in the year to come, putting a damper on economic growth.”41

TD Economics estimates if interest rates remain stable and there is no further tightening of mortgage rules, the debt-to-income ratio could reach 160 per cent by the second half of 2013.42

Figure 6: Debt to Disposable Income Ratio (%)

Households in Canada Quarterly 2006 - 2011

100%

110%

120%

130%

140%

150%

160%

2006-0

3

2006-0

6

2006-0

9

2006-1

2

2007-0

3

2007-0

6

2007-0

9

2007-1

2

2008-0

3

2008-0

6

2008-0

9

2008-1

2

2009-0

3

2009-0

6

2009-0

9

2009-1

2

2010-0

3

2010-0

6

2010-0

9

2010-1

2

2011

-03

2011

-06

2011

-09

De

bt

to p

ers

on

al

dis

po

sa

ble

in

co

me

ra

tio

(%

)

Source: Statistics Canada, CANSIM Table 3780012

Another measure of householdsʼ financial health is total debt service costs relative to income – a superior assessment of financial risk according to TD Economics. However, Canada does not have a solid measure of this, so economists often look at data obtained by an Ipsos Reid survey of 4,000 households that provides an estimate for total personal debt service costs.

41 The Globe and Mail, Record high household debt in Canada triggers alarm, Tavia Grant, Dec 13, 2011. 42 TD Economics, Perspective, What Rising Personal Debt-To-Income Tells Us, January 18, 2012, p.1.



32

“By this measure, personal debt obligations are manageable, with debt service costs at historically low levels. However, this is a reflection of the current interest rate environment. And, the Ipsos Reid survey does provide some evidence that Canadian households have become more sensitive to interest rates. In particular, the share of income that households have to devote to debt payments started to creep up in 2011, despite the fact that average interest rates on consumer loans have remained relatively steady.”43

TD Economics estimates that close to two million Canadian households with debt would have trouble meeting their financial obligations should interest rates rise two percentage points, because more than 40 per cent of their after-tax income would be going to service their debts.

Reflecting high household debt levels, the Conference Board of Canada Consumer Confidence Index44 declined 6.5 percentage points to 69.945 in December 2011. This level was down 11.1 percentage points from the same month of 2010 and was also at its lowest level in more than two and a half years. Consumer confidence in December 2011 was down across Canada with the biggest drop recorded in Atlantic Canada.

“Falling confidence was widespread, as all regional index values decreased this month. Atlantic Canada wiped out all of last monthʼs impressive gain in the region, posting a 19.4-point contraction. That brought the regionʼs index down to 65. The Prairies did relatively well this month, suffering a drop of just 1.6 points to 97.2. Except for the Prairies— where elevated oil prices continue to spur the resource-rich economies of Alberta, Saskatchewan, and Manitoba—confidence levels in all regions have now largely returned to where they were during the recession.”46

The proportion of consumers indicating they are financially better off today than they were six months ago declined to 15.2 per cent in December 2011. According to the Conference Board of Canada, negative responses on this question have been outnumbering positive ones since 2008.

Consumers also remain cautious about their near term financial situation. When asked if they expect an improvement in their financial situation over the next six months, only 23.4 per cent indicated that they did. In contrast, the portion of respondents expecting a deterioration in their financial situation increased by two percentage points from the previous month to 17.3 per cent in December 2011.

Consumers are especially pessimistic about future job creation. The share of respondents expecting fewer jobs to be available in their communities over the next six months stood at 27.4 per cent in December 2011. According to the Conference Board of Canada, this was the highest level of consumers reporting fewer jobs since the summer of 2009.

Business sentiment among small-sized business in Canada was virtually unchanged in November 2011 compared to the previous month, with a Business Barometer index of 63.7. Measured on a scale between 0 and 100, an index level above 50 means owners expecting their businessesʼ performance to be stronger in the next year outnumber those expecting weaker performance. Past results suggest index levels normally range between 65 and 75 when the economy is growing.

43 Ibid. 44 The Index of Consumer Confidence is constructed from responses to four attitudinal questions posed to a random

sample of Canadian households. Those surveyed are asked to give their views about their householdsʼ current and expected financial positions and the short-term employment outlook. The latest results are based on over 2,000 telephone interviews conducted between December 8 and December 18, 2011.

45 2002 = 100 46 The Conference Board of Canada, Index of Consumer Confidence – December 2011, p.1.



33

According to the Canadian Federation of Independent Business (CFIB), Novemberʼs sentiment was lower than normal, “as overhanging concerns about the potential spread of economic weakness out of Europe appear to be still at play.”47

Small business owners in Saskatchewan and Alberta were the most optimistic in November 2011, with index levels of 74.2 and 71.7 respectively. Optimism was the lowest in Nova Scotia, New Brunswick and Ontario, with all three provinces registering index levels below 60.

CONTRIBUTORY INFLUENCES A number of factors influence the Canadian economy. These factors are discussed in more detail in the following sections.

Canadian Dollar

The Canadian dollar averaged 99 cents U.S. in the fourth quarter of 2011, down from an average of 102 cents U.S. the previous quarter, but unchanged year over year. The commodity sensitive currency has been trading above parity against the U.S. dollar since the beginning of 2011, reaching a high of 106 cents U.S. near the end of July 2011.

Figure 7: Historical Exchange Rate (CAD/US, quarterly averages)

1.00 0.99

0.96

0.83

0.80

0.86

0.91

0.950.96

0.970.96

0.99

1.01

1.031.02

0.99

0.70

0.80

0.90

1.00

1.10

Q1

08

Q2

08

Q3

08

Q4

08

Q1

09

Q2

09

Q3

09

Q4

09

Q1

10

Q2

10

Q3

10

Q4

10

Q1

11

Q2

11

Q3

11

Q4

11

Exch

an

ge R

ate

(C

AD

/US

)

Source: The Bank of Canada, Rates and Statistics, Exchange Rates

The Canadian dollar is forecast to average between 95 cents U.S. (TD Economics) and 102 cents U.S. (Scotiabank) in the final quarter of 2012. TD Economics does not expect the loonie to reach parity with the U.S. dollar until the third quarter of 2013.

47 Canadian Federation of Independent Business, Business Barometer, December 7, 2011, p.1.



34

“With flight-to-safety moves the order of the day in the first half of 2012, we expect the loonie to fall as low as 90 U.S. cents in the first half of the year. But, we also expect that move to be reversed later in the year as euro uncertainty dissipates. However, we do not expect the Canadian dollar to regain parity with the U.S. dollar until 2013, once the Bank of Canada has resumed hiking rates.”48

“Canadian (CAD) and the Australian (AUD) dollar continue to be well supported by favourable commodity-price dynamics, strong sovereign positions and stable monetary policy conditions. On December 6th the Reserve Bank of Australia cut the target cash rate by 25 bps to 4.25% for the second consecutive month, whereas the Bank of Canada has left its reference rate unchanged at 1% since September 2010. Recent official statements/rhetoric in both countries have hinted that no change in the current policy stance is anticipated (despite continuing price pressures in Canada associated with rising food and energy costs). The CAD has also received a boost from persistently strong crude oil prices and recent economic data in the US providing evidence of a modest recovery. We expect the CAD to close 2012 at a rate of 1.02 per USD.”49

Table 3: Exchange Rate Forecast – End of Quarter (CAD/USD)

Q1 Q2 Q3 Q4

BMO Capital Markets* December 2011 0.95 0.94 0.96 0.99

RBC Financial Group December 2011 0.97 0.98 0.99 1.00

Scotiabank December 2011 0.98 0.99 1.01 1.02

TD Bank Financial Group December 2011 0.92 0.90 0.92 0.95

CIBC World Markets December 2011 0.94 0.93 0.97 1.00

* Average for the quarter

Forecast Agency Date Released

2012

Inflation

The Consumer price Index (CPI) is the most relevant estimate of the cost of living for most Canadians. The CPI compares the retail prices of a representative "shopping basket" of goods and services at two different points in time. The Bank of Canada monitors changes in the CPI and decides when to tighten monetary conditions to keep inflation within the range of the inflation-control target it has set. The inflation-control target has been renewed five times since the Bank of Canada adopted it in 1991, most recently in November 2011. The target aims to keep total CPI inflation at the 2 per cent midpoint of a target range of 1 to 3 per cent. 50

48 TD Economics, Dollars and Sense, December 15, 2011, p.2. 49 Scotiabank Group, Foreign Exchange Outlook, January 2012, p.3. 50 Bank of Canada, http://www.bankofcanada.ca/rates/indicators/key-variables/inflation-control-target/



35

Consumer price increases in Canada slowed to 2.9 per cent in the 12 months to October 2011, following a 3.2 per cent annual increase the previous month.51 Lower energy prices in October 2011, relative to the previous month, was the main reason for the slowdown.

“With todayʼs data release, we see that the spunk in inflation recorded over the last few months was indeed temporary; lower commodity prices and slower economic momentum are helping to put the brakes on growing inflationary pressures. Monthly gyrations aside, the underlying rate of inflation should be tame as we close out the year and look to 2012. TD Economicsʼ forecasts that 2011 quarter four should record 2.0% CPI and 1.5% core CPI.”52

Figure 8: CPI All-Items and Core, Canada

(% change from the same month of previous year)

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

2009-0

1

2009-0

4

2009-0

7

2009-1

0

2010-0

1

2010-0

4

2010-0

7

2010-1

0

2011

-01

2011

-04

2011

-07

2011

-10

% C

han

ge

CPI All-Items CPI Core

Source: Statistics Canada

The Bank of Canadaʼs core measure of inflation, which excludes eight of the CPIʼs most volatile components (fruit, vegetables, gasoline, fuel oil, natural gas, mortgage interest, intercity transportation and tobacco products), increased 2.1 per cent year-over-year in October 2011, following a 2.2 per cent gain in September 2011.

With the exception of Alberta, inflation rose at a slower rate in October 2011 compared to the previous month in every province. In Alberta, consumer prices increased 3.4 per cent year-over-year in October 2011, after increasing 2.8 per cent in September. According to Statistics Canada, “the October increase was led by higher prices for electricity, which have tended to be volatile in the province.”53

51 Statistics Canada, The Daily, Consumer Price Index October 2011, November 18, 2011. 52 TD Economics, Data Commentaries, Canadian Consumer Price Index, November 18, 2011. 53 Statistics Canada, The Daily, Consumer Price Index October 2011, November 18, 2011.



36

The Bank of Canada expects core inflation to remain at close to 2.0 per cent over the next two years. As the increase in food prices slows and the economy starts to absorb some of the slack, core inflation is expected to return to 2.0 per cent by the end of 2013.

Figure 9: CPI All Items Index September and October 2011 (Canada and provinces)

(Percent change from the same month of the previous year)

3.2%

3.8%

3.4%

4.2% 4.2%

3.4%3.5%

3.4%

2.8%2.9%

3.5%

2.9%

3.9%4.0%

3.3%

2.7%

3.0%

2.8%

3.4%

2.3%2.4%

3.4%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

Canada

NL

PE

NS

NB

QC

ON

MB S

KAB

BC

% C

han

ge

September October


Inflation in Canada is estimated at approximately 3.0 per cent this year. Consumer prices are forecast to ease over the next couple of years, with the majority of forecasting agencies expecting inflation to be below 2.0 per cent in 2012 and just slightly above 2.0 per cent in 2013.

“Price increases should cool somewhat in 2012, as food inflation ebbs and energy prices simmer down amid a slowing global economy. However, note that at an average rate of nearly 3% this year, 2011 will mark the fastest full-year inflation in Canada in 20 years.”54

As stated in the October 2011 Monetary Policy Report, upside risks to inflation in Canada include stronger than expected global inflationary pressures, increased momentum in Canadian household spending and the possibility of a faster rebound in business and consumer confidence. In comparison, three main downside risks to Canadian inflation include failure to properly address sovereign debt and banking crisis in Europe, probability of a recession in the U.S. economy and weaker than expected household spending.

54 BMO Financial Group, econoFACTS, Cdn CPI: Still Well-Fed, Clothing Wearing Thin, December 20, 2011.



37

“Recent survey measures indicate that inflation expectations remain well anchored at the 2 per cent target. The October Consensus Economics forecast for total CPI inflation was 1.9 per cent in 2012. As reported in the Bankʼs Autumn Business Outlook Survey, 88 per cent of firms expect average inflation over the next two years to remain within the 1 to 3 per cent inflation- control range. Market-based measures of longer-term inflation expectations also remain consistent with the 2 per cent inflation-control target.”55

Table 4: Consumer Price Index (all-items, year-over-year per cent change)

Q1 Q2 Q3 Q4 2011 2012 2013

CIBC World Markets December 2011 2.50 1.70 1.70 1.80 3.00 1.90 2.10

TD Bank Financial Group December 2011 2.10 1.70 1.40 1.50 2.90 1.70 1.80

BMO Capital Markets December 2011 2.50 2.20 1.80 2.20 3.00 2.50 2.10

RBC Financial Group December 2011 2.70 1.90 1.50 1.80 2.90 1.70 2.10

Scotiabank December 2011 2.30 1.70 1.60 1.60 3.00 1.80 2.00


Annual2012

Interest Rates

The Bank of Canada adjusts monetary policy by raising and lowering the target for the overnight rate, the interest rate at which major financial institutions borrow and lend one-day funds among themselves.

“Monetary policy is concerned with how much money circulates in the economy and the purchasing power of that money. Since 1935, the Bank of Canada has been responsible for regulating credit and currency markets to enhance Canadaʼs economic well-being. The Bank exerts its regulatory influence on Canadian financial markets through the use of monetary policy tools— that is, by adjusting the monetary base and interest rates and, indirectly, the exchange rate.”56

As was widely anticipated, the Bank of Canada kept the target for the overnight rate at 1.0 per cent in its December 6, 2011 interest rate announcement. The Bankʼs key lending rate has been at 1.0 per cent since September 2010.

In its announcement, the Bank stated that the debt crisis in Europe has deepened and global financial market conditions have deteriorated as a result. However, consumer spending and business investment in Canada and the U.S. have contributed to stronger than anticipated economic growth in the two countries. Growth in China and other emerging economies continues to be strong, and the Bank expects inflation in Canada to decline even further.

“Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. With the target interest rate near historic lows and the financial system functioning well, there is considerable monetary policy stimulus in Canada.”57

55 Bank of Canada, Monetary Policy Report, October 2011, p.21. 56 Conference Board of Canada, Long Term Economic Forecast, Canadian Outlook 2010, April 2010, p.23. 57 Bank of Canada, Press Release, Bank of Canada maintains overnight rate target at 1 per cent, December 6, 2011.



38

The Bank meets every six weeks to make a decision on its interest rate policy. The next scheduled date for the overnight rate target announcement is Jan 17, 2012. The majority of forecasting agencies, including TD Economics, are expecting the Bank of Canada to remain on hold for 2012.

“So what of the Bank of Canada? While the Bank has shown itself ready to take decisive action in the face of exigent threats in the past, sluggish growth is unlikely to produce a deflationary or near-deflationary outcome, and will therefore not be a sufficient condition for a return to emergency rates. Rather, we believe that further policy easing from the Bank of Canada (conventional or otherwise) would require either another deep US recession, or significant impairment in Canadian funding markets (i.e., financial contagion from Europe spreads to the US, and from there impacts Canada). While it would be foolish to rule out these outcomes – indeed, the probability of an adverse European event is higher today than itʼs ever been – they are not part of our base case going forward. Thus, with the Bank of Canada unlikely to resort to rate cuts and the Canadian (and global) outlook looking less than vigorous, we expect the overnight rate to remain at 1.00% for the entirety of 2012.”58

Table 5: Bank of Canada Overnight Rate – End of Quarter Projections (%)

Q1 Q2 Q3 Q4 Q1 Q2

BMO Capital Markets* December 2011 1.00 1.00 1.00 1.00 1.25 1.50

CIBC World Markets December 2011 1.00 1.00 1.00 1.00 1.00 1.00

RBC Financial Group December 2011 1.00 1.00 1.25 1.50 1.75 2.00

Scotiabank December 2011 1.00 1.00 1.00 1.00 1.00 1.50

TD Bank Financial Group December 2011 1.00 1.00 1.00 1.00 1.25 1.75

* Average for the quarter


20132012

Population

Canadaʼs population increased by122,600 or 0.4 per cent from the previous quarter to an estimated 34,605,300 as of October 1, 2011.59

Net international migration accounted for 64 per cent of Canadaʼs population growth in the third quarter of 2011. On a net basis, Canada received 78,500 international migrants in the quarter, down from 84,800 in the third quarter of 2010.

With103,300 births and 59,200 deaths, natural increase was estimated at 44,100 in the third quarter of 2011 and accounted for the remaining 36 per cent of the quarterʼs total population growth. This level of natural increase was slightly higher than the 43,300 estimated in the third quarter of 2010.

All provinces posted population increases in the third quarter of 2011, with Alberta and Saskatchewan posting the highest growth rate among provinces at 0.5 per cent.

58 TD Economics, Financial Market Outlook and Trading Themes for 2012, December 15, 2011, p.7. 59 Statistics Canada, The Daily, Canadaʼs Population Estimates, Third Quarter 2011, December 20, 2011.



39

Figure 10: Componets of Canadaʼs Population Growth

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Natural Increase Net International Migration


Canadaʼs Aboriginal population is forecast to reach between 1.7 million and 2.2 million by 2031, according to a recent release by Statistics Canada.60 The Aboriginal population is expected to represent between 4.0 and 5.3 per cent of Canadaʼs total population by 2031, up from 3.9 per cent of the total population in 2006.

Nunavut (86 per cent of the population) and the North West Territories (52 per cent of the population) will be home to the largest proportion of Aboriginal people nationwide by 2031. Provincially, Saskatchewan (24 per cent of the population) and Manitoba (21 per cent of the population) are expected to have the largest proportions of Aboriginal people by 2031.

60 Statistics Canada, The Daily, Population Projections by Aboriginal Identity in Canada, December 7, 2011.



40

ALBERTA ECONOMY Although uncertainties surrounding the sovereign debt crisis in the European Union and the slowdown in economic momentum for both the U.S. and world economies have put Canadian economic growth on a softer path, the Alberta economy is expected to weather these uncertainties relatively well and lead the nation in terms of economic growth over the medium term.

“Amid the heightened economic uncertainty spreading globally in the past several months, Albertaʼs steady progress toward full recovery from the recession is refreshing. Overcoming obstacles of its own—chief among them the wildfires that caused significant economic disruptions in May—the provincial economy is now displaying the stuff that made it a growth powerhouse a little more than half a decade ago.”61

Figure 11: Alberta Economic Outlook (% change)

-6.0%

-4.0%

-2.0%

0.0%

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4.0%

6.0%

8.0%

2000

2001

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f

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f

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f

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f

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f

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f

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en

t C

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ge

GDP - Alberta Employment - Alberta GDP - Canada

Source: The Conference Board of Canada, E-Data System

While the continued risk of a potential second dip in the European Union economies caused a drop in oil prices below the $80 U.S. per barrel mark over the summer, this decline is expected to be short-lived. Moreover, oil prices have already gained much of that loss and are forecast to reach $106 U.S. per barrel by the end of 2013.

61 RBC Economics, Provincial Outlook, December 2011, p.3.



41

“Given the current outlook for oil prices, optimism in the oil sands is also on the rise. Virtually all projects are economical in the current environment, and investment is expected to soar over the medium term as a result. Slowing global economic growth does present a downside risk to oil prices in the very near term, but is unlikely to be significant enough to threaten investment as it did in the 2008–09 recession.”62

The most visible impact of the increased oil sands investment in the province is expected to be in the construction industry. With an inventory worth $120 billion currently underway in oil sands projects, growth in Albertaʼs construction industry is expected to average 5.2 per cent annually over the next two years. According to the Conference Board of Canada, this rate of growth will be, “an extremely strong performance given the large drawback in public infrastructure spending in 2012.”63

Albertaʼs already tight labour market is expected to experience another boom over the medium term. In the final quarter of 2011 alone, close to 95,000 new jobs were created in the province. According to RBC Economics, total job creation for the year as a whole could well be above the 100,000 mark, which would be a new record for the province. Alberta is set to create another 82,000 net new positions going into 2012, with construction and services-producing industries leading the way. Employment gains in the province are then expected to average 42,000 net jobs from 2013 to 2016.

“What is most impressive about this supercharged job market is that gains are broadly based across industries. The energy sector is directly responsible for only a small portion of these gains. Small to moderate advances are being registered in the vast majority of industries. Moreover, the boom entirely emanates from the private sector, which is the source of an astounding 116,000 new jobs this year. Such strength easily made up for declines in the public sector and among the self-employed.”

A strong labour market will once again put upward pressure on wages, widening the gap between average weekly earnings of Alberta employees and the national average. According to the Conference Board of Canada, the average weekly wage of Alberta employees in the industrial sector is projected to increase 3.2 per cent year-over-year to $1,003 in 2012. This level of average weekly earnings would be 20 per cent higher compared to the Canadian average in the same sector.

Robust employment and wage gains are also expected to lift consumer spending in the province. Consumer spending in Alberta is forecast to increase 5.1 per cent this year (2011) and 5.9 per cent in 2012. Consumer spending is then expected to gradually slow and average 4.8 per cent growth annually from 2013 to 2016.

All in all, recent forecasts for real GDP growth in Alberta range between 3.1 per cent and 4.0 per cent in 2011. This pace of growth is also expected to continue through the next two years with real GDP expected to increase between 3.6 per cent and 3.9 per cent in 2012, and between 3.8 per cent and 4.5 per cent in 2013. However, TD Economics stands on the more cautious side compared to other major forecasting agencies, and expects real GDP in Alberta to expand 2.6 per cent in 2012 and 2.9 per cent in 2013.

“No provincial economy will thrive spectacularly in such a volatile, uncertain environment. For some provinces, softer commodity prices will curtail growth. For some other, slower U.S. growth will do it. Overall, the provincial economic growth profile for the year ahead has deteriorated since TD Economicsʼ September provincial update for quite a few provinces, in line with our forecast for Canada as a whole.”64

62 The Conference Board of Canada, Economic Forecast, Provincial Outlook Autumn 2011, p.47. 63 Ibid, p.46. 64 TD Economics, Provincial Economic Update, January 4, 2012, p.2.



42

CONTRIBUTORY INFLUENCES A number of factors influence the Alberta economy. Some of these factors are discussed in more detail in the following sections.

Energy Industry

The price of West Texas Intermediate (WTI) crude oil rose steadily during the final quarter of 2011, averaging $86 U.S. per barrel in October, $97 U.S. per barrel in November and $99 U.S. per barrel in December. Overall, WTI crude oil averaged $94 U.S. per barrel in the fourth quarter of 2011, up 4.8 per cent from the previous quarter, and up over 10 per cent year-over-year.65

The U.S. Energy Information Administration (EIA) is forecasting WTI crude oil will average $100 U.S. per barrel in 2012, and reach $106 U.S. per barrel by the end of 2013.

“Oil prices are starting 2012 on a strong note, and are likely to remain strong. Despite concern over the euro zone economic outlook, prices are being supported by a widening geopolitical risk premium due to developments in the Persian Gulf and the threat of oil supply disruptions linked to sanctions on Iran.”66

Figure 12: Average Price of West Texas Intermediate Crude Oil (US$/Barrel)

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

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$140.0

Q1

2006

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2006

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2012

f

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f

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2012

f

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2012

f

US$/Barrel

Actual Forecast

Source: Energy Information Administration, Short-Term Energy Outlook January 2012

65 U.S. Energy Information Administration, Short Term Energy Outlook, January 2012. 66 Scotiabank Group, Global Economic Research, Global Forecast Update, January 3, 2012, p.4.



43

Natural gas prices67 averaged $3.33 CAD per gigajoule (GJ) in the third quarter of 2011. This was down 2.2 per cent from the previous quarter, but up 1.7 per cent from an average of $3.27 CAD per GJ in the third quarter of 2010. In October 2011, natural gas prices averaged $3.17 CAD per GJ, down 2.2 per cent from the previous month, but up 8.6 per cent year-over-year.

Figure 13: Average Price of Natural Gas (C$/GJ)

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

Jan-06

Apr-06

Jul-06

Oct-06

Jan-07

Apr-07

Jul-07

Oct-07

Jan-08

Apr-08

Jul-08

Oct-08

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Apr-09

Jul-09

Oct-09

Jan-10

Apr-10

Jul-10

Oct-10

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Apr-11

Jul-11

Oct-11

C$/GJ

Source: Alberta Energy, Alberta Gas Reference Price History

AJM Deloitte is forecasting the Alberta Natural Gas Reference Price (ARP) will average $3.25 CAD per MCF in 2012 and $3.85 CAD per MCF in 2013. The ARP is then forecast to increase each year and reach $4.90 CAD per MCF by 2015.68 For 2012, this represents a $0.70 CAD per MCF downward revision from the September 2011 forecast.

“After much deliberation and review of all the factors, AJM Deloitte has dropped its natural gas price outlook to correspond with the current North American supply and demand scenario. The fundamental change in the North American supply over the last five or six years, with the advent of multi-fractured horizontal drilling, is having a lasting effect on the natural gas price. For the consumers across North America it is a good omen. As for the natural gas producers, it means that the cost to explore for and produce natural gas will continue to be under severe pressure to keep projects economic.”69

67 Alberta Energy. The Alberta Natural Gas Reference Price (ARP) is a monthly weighted average field price of all

Alberta gas sales, as determined by the Alberta Department of Energy through a survey of actual sales transactions. The price is used for royalty purposes.

68 AJM Deloitte, Gas Forecast, December 31, 2011. 69 AJM Deloitte, The continued North American doldrums for natural gas, January 3, 2012.



44

There were an average of 303 active drilling rigs in Alberta in the third quarter of 2011, up 52 per cent from the third quarter of 2010. In November 2011, 330 drilling rigs were active in Alberta, up 20 per cent from November 2010.70

According to the Canadian Association of Oilwell Drilling Contractors (CAODC), there were an average of 454 active drilling rigs in Western Canada in the third quarter of 2011. The CAODC estimates that the number of active rigs will decline slightly to 443 in the fourth quarter of 2011. Rig utilization (the share of active drilling rigs in total rigs) is expected to average 51 per cent in 2011, up from 43 per cent in 2010 and more than double the low of 24 per cent in 2009. Rig utilization in 2012 is expected to mirror the 2011 results, despite forecasts of strong oil prices. The CAODC believes more significant gains are possible, however, skilled labour shortages in the industry are expected to limit growth.

“The greatest limiting factor when examining overall utilization rates will be the shortage of skilled rig workers. Industry suffered a great loss of skills and knowledge during the downturn of 2009 and it has struggled to attract these experienced workers back. While the numbers of new workers joining industry is encouraging, it will take time to develop their skills. In addition to outside labour competition, the drilling rigs lose many skilled people to positions within industry – particularly specialized positions like directional drilling. CAODC members are proud that their people are recognized as some of the best-trained in industry. However, it adds an element of difficulty when trying to reach its own operational goals.”71

Major Construction Projects

As of November 2011, there were a total of 897 major construction projects in Alberta worth $193.5 billion that were either planned, underway or recently completed. Oil sands projects accounted for over 60 per cent of the total value of projects in the province.72

Table 6: Inventory of Major Alberta Projects

Project Sector

Number of

Projects

Value of Projects

($millions)

Percent of

Total

Oil Sands 62 118,759.0 61.0%

Infrastructure 313 19,640.7 10.1%

Power 36 13,644.2 7.0%

Institutional 129 8,453.1 4.3%

Pipelines 28 8,297.2 4.3%

Commercial/Retail 69 7,638.5 3.9%

Residential 109 4,711.5 2.4%

Tourism/Recreation 86 3,454.8 1.8%

Oil & Gas 16 2,396.5 1.2%

Commercial/Retail and Residential 6 1,544.3 0.8%

Other Industrial 6 1,500.2 0.8%

Biofuels 12 1,425.6 0.7%

Mining 4 760.0 0.4%

Telecommunications 2 656.0 0.3%

Agriculture & Related 8 263.7 0.1%

Forestry & Related 7 234.4 0.1%

Chemicals & Petrochemicals 4 118.5 0.1%

Total 897 $193,498.20 100%

Alberta Finance and Enterprise: as of November 2011 70 Alberta Treasury Board and Enterprise, Monthly Economic Review December 2011, p.19. 71 The Canadian Association of Oilwell Drilling Contractors, 2012 Forecast, November 8, 2011. 72 Alberta Treasury Board and Enterprise, Inventory of Major Alberta Projects, November 2011.



45

Inflation

Consumer prices in Alberta increased 3.4 per cent year-over-year in October 2011, a rate not seen in the province since August 2008. This was also the first time in two and half years that Albertaʼs inflation rate was higher than the national average (2.9 per cent).

“While Octoberʼs jump in prices does raise some eyebrows, the increase appears to be driven by just a few select items. Food and energy products were the main culprits. Food prices rose nearly across the board with prices for meat, dairy, and bakery & cereal products all up more than 5% from last year. On the energy front, a surge in electricity costs drove the increase. Electricity prices tend to be far more volatile in Alberta than the rest of the country and hence the jump in electricity costs will probably prove to just be temporary.”73

Figure 14: CPI All-items Index: Canada and Alberta

(Per cent change, year-over-year)

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The inflation rate in Alberta is expected to average 2.3 per cent in 2011, the lowest among provinces. There are varying forecasts of how inflation will change in Alberta over the next two years. According to RBC Economics, Alberta will have the lowest inflation rate in 2012 at 1.5 per cent (along with BC and QC), and the second lowest inflation rate in 2013 at 2.0 per cent (after BC). In contrast, BMO Capital Markets expects Alberta to have the second highest inflation rate among provinces in 2012 (2.3 per cent), after Quebec (2.4 per cent) and the highest inflation rate in the country in 2013 at 2.4 per cent.74

73 ATB Financial, Weekly Economic Bulletin, November 18, 2011, p.1. 74 BMO Capital Markets Economics, Provincial Economic Outlook, Dec 16, 2011.



46

Figure 15: CPI All-Items Index Forecast — Canada and Provinces

(year-over-year per cent change)

0.0%

0.5%

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Can

ada

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% C

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ng

e

2012 2013

Source: RBC Economics, Provincial Outlook, December 2011

Housing Market

Housing starts in Alberta totaled 7,589 units in the third quarter of 2011, an increase of 2.0 per cent from the third quarter of 2010. Multi-family starts in Alberta rose 6.0 per cent year-over-year to 2,968 units in the third quarter of 2011, while single-detached starts declined less than 1.0 per cent to 4,621 units.

Total housing starts increased in three of seven major urban centres in Alberta in the third quarter of 2011, compared to the same period in 2010. Red Deer recorded the largest year-over-year gain in housing starts in the third quarter of 2011 (84 per cent), followed by Grande Prairie (55 per cent) and Edmonton (5.9 per cent). Total housing starts declined by 63 per cent in Medicine Hat, 39 per cent in Wood Buffalo, 8.3 per cent in Lethbridge and 4.1 per cent in Calgary in the third quarter of 2011.

Single-detached starts in Alberta are forecast to decline 11 per cent in 2011 to 15,900 units. As the economy improves, single-detached starts are expected to increase 16 per cent to 18,400 units in 2012.

“In Alberta, builders have been cautious expanding production this year due in part to a higher volume of complete and unabsorbed units. Single-detached starts are projected to decline nearly eleven per cent in 2011, as builders mitigate the risk of rising inventories.”75

75 Canada Mortgage and Housing Corporation, Housing Market Outlook - Prairie Region Highlights, Fourth Quarter

2011, p.2.



47

Multi-family starts are forecast to increase 2.0 per cent in 2011 to 9,425 units. As job creation improves and incomes rise, multi-family starts are expected to increase 15 per cent to 10,800 units in 2012.

“Some previously halted high rise apartment projects are beginning to resume activity, while re-priced condominium projects are competing more strongly with the resale market. After a slow start to this year, the pace of multi-family starts has picked-up and is expected to edge past last yearʼs level.”76

Overall, housing starts in Alberta are forecast to total 25,325 units in 2011, a 6.5 per cent decline from the previous year. As the economic recovery solidifies, Canada Mortgage and Housing Corporation (CMHC) is expecting total housing starts in Alberta to increase 15 per cent year-over-year to 29,200 units in 2012.

Figure 16: Alberta Total Housing Starts

0

10,000

20,000

30,000

40,000

50,000

60,000

2005 2006 2007 2008 2009 2010 2011(f) 2012 (f)

To

tal

Sta

rts

Single-detached Multi-family

Source: Canada Mortgage and Housing Corporation

The number of Alberta homes sold on the Multiple Listing Service (MLS) increased 17.5 per cent year-over-year to 14,054 units in the third quarter of 2011. With the gains in the third quarter, a total of 42,580 homes were sold in Alberta to the end of September 2011, up 6.9 per cent from the same period in 2010. The average MLS resale price in Alberta increased 2.0 per cent year-over-year to $355,971 in the third quarter of 2011. Year to date to the end of September 2011, the MLS resale price in Alberta averaged $356,011, virtually unchanged from the same period in 2010.

CMHC is forecasting total MLS sales in Alberta to increase 6.2 per cent year-over-year to 52,800 units in 2011 and by a further 2.1 per cent to 53,900 units in 2012. The average MLS resale price in Alberta is expected to increase only slightly by 0.7 per cent to $354,700 in 2011 and by a further 2.3 per cent to $362,700 in 2012.

76 Canada Mortgage and Housing Corporation, Housing Market Outlook - Prairie Region Highlights, Fourth Quarter

2011, p.2.



48

“Most of Albertaʼs major urban resale markets remain in buyersʼ market conditions as listings remain elevated relative to sales. As a result, the average resale price in 2011 is expected to rise fractionally above last yearʼs average, with much of the price movement attributed to compositional effects. As Albertaʼs economy grows and generates employment, more migrants will help improve market balance.”77

Rental Market

Increased employment and positive net migration pushed the average apartment vacancy rate in Alberta down to 3.4 per cent in October 2011, from 4.6 per cent the previous year.78 Across the province, Canmore and Okotoks had the lowest apartment vacancy rates at zero per cent in October 2011, while Medicine Hat and Wood Buffalo had the highest vacancy rates at 9.4 per cent.

“In Wood Buffalo, heightened oil prices have strengthened labour market conditions, however the increase in work camps and secondary rental units drew some renters away from the traditional rental market. As a result, Wood Buffaloʼs vacancy rate increased from 5.5 per cent in October 2010 to 9.4 per cent in October 2011. Lower prices for natural gas continued to impact activity in Medicine Hat, as this sector is a key driver of the local economy. Medicine Hat also had a vacancy rate 9.4 per cent in October 2011, down slightly from the 10.1 per cent in October 2010.”79

Figure 17: Private Apartment Vacancy Rates

(Alberta and Select Urban Centres)

1.2%

2.1%

3.6%

7.5%

4.2%4.6%

10.5%

4.1%

10.1%

5.5%

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3.2% 3.3% 3.4%3.9%

6.8%

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mor

e

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toks

Calga

ry

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Dee

r

Edmon

ton

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nde

Prairie

Leth

bridge

Med

icine

Hat

Woo

d Buf

falo

Va

ca

nc

y R

ate

Oct-10 Oct-11


77 Canada Mortgage and Housing Corporation, Housing Market Outlook — Prairie Region Highlights, Fourth Quarter

2011, p.2. 78 Canada Mortgage and Housing Corporation, Rental Market Report Alberta Highlights, Fall 2011. 79 Ibid, p.2.



49

The average rent for a two-bedroom apartment in Alberta rose slightly to $1,044 per month in October 2011, from $1,036 per month the previous year. Medicine Hat had the lowest average two-bedroom rent in October 2011 at $698 per month, while Wood Buffalo had the highest at $2,049 per month.

“Including new and existing structures, the average two-bedroom rent in Wood Buffalo decreased $161 per month, from $2,210 in October 2010 to $2,049 in October 2011. Despite this reduction, Wood Buffalo continued to retain its position as having the highest rental rates in the province. Higher vacancies and a reduction in furnished suites contributed to the decline in rents.” 80

Building Permits

In the third quarter of 2011, Alberta contractors took out $1.90 billion in residential building permits and $1.49 billion in non-residential building permits, for a total of $3.39 billion in building permits.

Compared to the second quarter of 2011, the total value of building permits issued in Alberta was up 13 per cent in the third quarter of 2011. The third quarter increase was mainly a result of the 21 per cent increase in non-residential permits. Residential permits increased 8.0 per cent quarter-over quarter.

On an annual basis, the total value of building permits issued during the third quarter of 2011 in Alberta increased 28 per cent. Gains in both residential (23 per cent) and non-residential (36 per cent) permits contributed to this increase.

Figure 18: Value of Building Permits (Alberta), seasonally adjusted

-

200

400

600

800

1,000

1,200

Jan-08

Apr-08

Jul-08

Oct-08

Jan-09

Apr-09

Jul-09

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Apr-11

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Oct-11

$ m

illi

on

s

Residential Non-Residential

Source: Statistics Canada, CANSIM Table No: 260006

80 Canada Mortgage and Housing Corporation, Rental Market Repot, Alberta Highlights, Fall 2011, p.2.



50

In October 2011, Alberta contractors took out $969 million worth of building permits, down 11 per cent from the previous month. The value of building permits declined 17 per cent month-over month in Calgary, and 8.0 per cent month-over month in Edmonton. According to Statistics Canada, “lower construction intentions for commercial buildings and multi-family dwellings were behind Calgary's decrease.”81 On an annual basis, however, the total value of Alberta building permits was up 13 per cent in October 2011, with the value of Calgary building permits up 48 per cent year-over-year and the value of Edmonton building permits up 6.2 per cent.

Non-Residential Building Construction

Investment in non-residential building construction in Alberta totaled $2.175 billion in the fourth quarter of 2011. This level of investment was up 3.8 per cent from the previous quarter, but down almost 6.0 per cent from the fourth quarter of 2010.82

On an annual basis, the decline in non-residential building construction in Alberta was solely driven by a decrease in institutional investment, which was down 57 per cent year-over-year in the fourth quarter of 2011.

“Institutional investment fell in seven provinces, with the largest declines in Alberta and British Columbia. The largest contributing factor in both provinces was lower investment in educational buildings.”83

However, the other two components of non-residential building construction, industrial and commercial investment, recorded year-over-year gains in the fourth quarter of 2011. Commercial investment in Alberta increased over 20 per cent on an annual basis to $156 billion in the fourth quarter of 2011, while industrial investment increased 14 per cent to $284 million. According to Statistics Canada, Alberta made the largest contribution nationally in the commercial component in the fourth quarter of 2011. Higher spending for construction of warehouse and storage facilities as well as office buildings were the main contributors.

Retail and Wholesale Trade

Retail sales in Alberta totaled $16.0 billion in the third quarter of 2011, reflecting an increase of 1.4 per cent from the previous quarter and an increase of 5.3 per cent year-over-year. In October 2011, retail sales in Alberta reached $5.58 billion, up 3.0 per cent from the previous month. While retail sales increased in eight provinces in October 2011, Alberta posted the largest gain as a result of strong sales of new motor vehicles, a rate that was well above the national rate of 1.0 per cent.84

“Strong retail spending in Alberta is clearly a sign of a healthy economy. Not only are Albertans earning higher wages, their shopping habits suggest theyʼre confident in their employment prospects.”85

Enjoying the highest average weekly earnings and lowest tax rates in Canada, real disposable income of Alberta residents is expected to outpace the growth in other provinces. This higher income is expected to translate into increased retail sales in the province as well. The Conference Board of Canada expects retail sales in Alberta to increase 4.5 per cent in 2011. Going forward, growth in retail sales is expected to average around 5.0 per cent in 2012 and 6.2 per cent in 2013. RBC Economics is more optimistic about the pace of retail sales growth in the province as it forecasts 5.7 per cent growth in 2011 followed by an average of 6.2 per cent growth over the next two years.

81 Statistics Canada, The Daily, Building Permits October 2011, December 6, 2011. 82 Statistics Canada, The Daily, Investment in non-residential building construction, January 17, 2012. 83 Ibid. 84 Statistics Canada, The Daily, Retail Trade October 2011, December 21, 2011. 85 ATB Financial, Daily Economic Comment, Alberta Shoppers in a Good Mood, December 21, 2011.



51

“With job prospects improving so quickly and confidence rebuilding, Alberta consumers have been big spenders in 2011. Retail sales in the province have increased at one of the faster rate in the country, with big ticket items such as motor vehicles enjoying further resurgence from their recessionary lows. We expect that favourable labour market conditions will continue to support such positive consumer spending trend in 2012.”86

Wholesale sales in Alberta totaled $18.1 billion in the third quarter of 2011, up 7.4 per cent from the previous quarter and up 14 per cent year-over-year. Wholesale sales in Alberta increased another 3.9 per cent month-over-month to $6.4 billion in October 2011, the sixth consecutive monthly gain for the province.87

Over the 12 months to October 2011, retail sales in Alberta totaled $63.3 billion, up more than 7.0 per cent from the previous 12 months. Wholesale sales, on the other hand, totaled $69.6 billion over the 12 months to October 2011, up more than 15 per cent from the same period in 2010.

“The fact that wholesale activity has expanded nearly twice as quickly as retail trade suggests that either shop owners had allowed their inventories to deplete to unsustainable lows, or that retailers were cranking up purchases in the fall ahead of the Christmas season. In either case, the strong wholesale trade figures point to a healthy consumer and business economy in Alberta.”88

Figure 19: Alberta Retail and Wholesale Sales ($billions), seasonally adjusted

4.0

4.5

5.0

5.5

6.0

6.5

7.0

Jan-

08

Apr-0

8

Jul-0

8

Oct-0

8

Jan-

09

Apr-0

9

Jul-0

9

Oct-0

9

Jan-

10

Apr-1

0

Jul-1

0

Oct-1

0

Jan-

11

Apr-1

1

Jul-1

1

Oct-1

1

$ b

illi

on

s

Retail Sales Wholesale Sales

Source: Statistics Canada, CANSIM Table No: 800020, 810011

86 RBC Economics, Provincial Outlook, December 2011, p.3. 87 Statistics Canada, The Daily, Wholesale Trade October 2011, December 19, 2011. 88 ATB Financial, Daily Economic Comment, Wholesale Trade Soars in October, December 19, 2011.



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Average Weekly Earnings

In October 2011, average weekly earnings of Alberta payroll employees were relatively unchanged from the previous month at $1,049, but were up 4.5 per cent year-over-year.89 Nationally, average weekly earnings rose to $885 in October 2011, a 1.4 per cent increase from the previous month and a 2.7 per cent increase year-over-year. Every province registered annual gains in average weekly earnings in October, with Newfoundland and Labrador (7.7 per cent), Alberta (4.4 per cent) and New Brunswick (4.3 per cent) posting the largest growth rates. The lowest rate of growth in average weekly earnings in October 2011 was in Nova Scotia (0.4 per cent).

Figure 20: Average Weekly Earnings of Payroll Employees October 2010 and 2011

(Canada and provinces, seasonally adjusted)

$-

$200.00

$400.00

$600.00

$800.00

$1,000.00

$1,200.00

Canada

NL

PE

NS

NB

QC

ON

MB

SK

AB

BC

Oct-10 Oct-11

Source: Statistics Canada, Payroll employment, earnings and hours

Nationally, the mining and oil and gas ($1,801) and utilities ($1,691) sectors had the highest average weekly earnings in October 2011, while the accommodation and food services ($352) and retail trade ($512) sectors registered the lowest earnings.

Alberta employees have been enjoying average weekly earning gains that are higher than the inflation rate since the beginning of 2010. While the gap between average weekly wage growth and inflation declined significantly in July 2011, the gap has since increased and is expected to widen in 2012.

“Moving forward, with oil prices very resilient and the Alberta economy continuing to generate jobs, wages should continue to move higher in 2012. And with the potential for slower food and energy price inflation, disposable income in this province should continue to rise as well.”90

89 Statistics Canada, The Daily, Payroll employment, earnings and hours October 2011, December 22, 2011. 90 ATB Financial, Daily Economic Comment, Wages Growth Continues to Outpace Inflation, December 22, 2010.



53

Figure 21: Average Weekly Earnings and Inflation (All-items CPI)

(year-over-year per cent change)

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

2009

-01

2009

-04

2009

-07

2009

-10

2010

-01

2010

-04

2010

-07

2010

-10

2011

-01

2011

-04

2011

-07

2011

-10

% C

ha

ng

e

Average Weekly Earnings All-items CPI


Bankruptcies

A total of 1,718 Albertans and Alberta businesses filed for bankruptcy in the third quarter of 2011, down 12 per cent from the previous quarter and down 17 per cent year-over-year. Consumer bankruptcies in Alberta declined 16 per cent year-over-year to 1,654 in the third quarter of 2011, while business bankruptcies fell 30 per cent to 64 during the same period.91

In October 2011, consumer bankruptcies in Alberta continued their downward trend, falling 2.0 per cent from the previous month to 515. This was the lowest level for consumer bankruptcies in Alberta since August 2008. Business bankruptcies, however, increased 30 per cent in October 2011 to 30, from 23 the previous month.

“The steady drop in the number of [consumer] insolvencies at both the national and Alberta levels is a positive sign of the health of the economy and consumer finances. Factors like low interest rates, a relatively fast recovery from the recession, and a lower prevalence of predatory lending during the 2000s are all reasons why insolvencies remain in check in Canada. However, bankruptcy stats do not provide a complete picture of consumer finance in Canada. The proportion of mortgages in arrears is still elevated compared to the mid-decade (and Alberta is the highest in the country) and overall debt levels are a lot higher than they should be.”92

91 Office of the Superintendent of Bankruptcy Canada, Insolvency Statistics in Canada – Third Quarter 2011, December

11, 2011. 92 ATB Financial, Daily Economic Comment, Bankruptcies Continue Their Descent, January 11, 2012.



54

Figure 22: Personal and Business Bankruptcies in Alberta

515

30-

200

400

600

800

1,000

1,200

1,400

Jan-08

Apr-08

Jul-08

Oct-08

Jan-09

Apr-09

Jul-09

Oct-09

Jan-10

Apr-10

Jul-10

Oct-10

Jan-11

Apr-11

Jul-11

Oct-11

Nu

mb

er

of

Ba

nk

rup

tcie

s

Personal Business

Source: Office of the Superintendent of Bankruptcy Canada

Employment Insurance

Continuing the downward trend started in late 2009, the average number of Albertans receiving regular Employment Insurance (EI) benefits declined 11 per cent from the previous quarter and 33 per cent year-over-year to 31,477 in the third quarter of 2011. Regular EI beneficiaries in Alberta decreased a further 2.5 per cent month-over-month and 38.5 per cent year-over-year in October 2011, the largest decline among provinces.

“All 12 large centres in Alberta had fewer beneficiaries in October 2011 compared with October 2010. The largest declines were in Grande Prairie, Medicine Hat and Lethbridge. In Calgary, the number of beneficiaries dropped 40.2% to 7,000, while in Edmonton, it fell 39.2% to 6,900.”93

The number of EI claims in Alberta increased by 4.7 per cent month-over-month to 18,120 in October 2011. This was the third highest increase among all provinces, after Ontario (7.7 per cent) and Quebec (4.8 per cent). The number of EI claims is an indicator of the number of people who could become regular EI beneficiaries, since a claim must first be submitted. Since the beginning of the year, the number of EI claims in Alberta has remained relatively flat. This suggests that along with an improving economy, previous recipients running out of benefits is also contributing to the decline in EI beneficiaries.

93 Statistics Canada, The Daily, Employment Insurance October 2011, December 16, 2011.



55

Figure 23: Employment Insurance Beneficiaries and Initial/Renewal Claims (Alberta)

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Jan-

08

Apr

-08

Jul-0

8

Oct-0

8

Jan-

09

Apr

-09

Jul-0

9

Oct-0

9

Jan-

10

Apr

-10

Jul-1

0

Oct-1

0

Jan-

11

Apr

-11

Jul-1

1

Oct-1

1

EI Beneficiaries Initial/Renewal Claims


Population

Alberta once again posted the highest quarterly population growth rate among provinces in the third quarter of 2011, along with Saskatchewan. Albertaʼs population grew by 19,400 or 0.5 per cent to an estimated 3,798,800 as of October 1, 2011.94

Alberta received approximately 3,100 net interprovincial migrants in the third quarter of 2011, the highest among provinces. Approximately one-third of the net migrants to Alberta came from Ontario.

“During the third quarter of 2011 (July to September), Alberta gained 3,136 persons in interprovincial migration, compared to 1,155 last year, and a 2009 third quarter loss of over 2,000. In addition to Alberta, five other provinces/territories saw a net inflow in interprovincial migrants. However, Albertaʼs gain was roughly twice the net migration of these jurisdictions taken together. Manitoba saw the largest net outflow of 1,473, followed by Nova Scotia (-780), New Brunswick (-779) and BC (-723).”95

In addition, 7,580 net international migrants moved to Alberta during the third quarter of 2011. Together, migration from both sources accounted for approximately 55 per cent of Albertaʼs population growth in the third quarter of 2011.

With 14,237 births and 5,515 deaths, Alberta recorded a natural increase of 8,722 people during the third quarter of 2011. Natural increase accounted for the remaining 45 per cent of the provinceʼs quarterly population growth.

94 Statistics Canada, The Daily, Canadaʼs Population Estimates, Third Quarter 2011, December 20, 2011. 95 Government of Alberta, Economics, Demography and Public Finance, Quarterly Population Report Third Quarter

2011, December 20, 2011.



56

Figure 24: Components of Alberta's Population Growth

-60.0%

-40.0%

-20.0%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

Q1

2007

Q2

2007

Q3

2007

Q4

2007

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Q2

2010

Q3

2010

Q4

2010

Q1

2011

Q2

2011

Q3

2012

% S

ha

re i

n T

ota

l P

op

ula

tio

n G

row

th

Natural Increase Net Interprovincial Migration Net International Migration

Source: Statistics Canada, Quarterly Demographic Estimates



57

CALGARY REGION ECONOMY An increase in energy prices and energy related investments have been supporting the Calgary economy over the last two years as it continued to rebound from the adverse impacts of the economic recession. While there may be some revisions when the final numbers come in, the Calgary economy is forecast to post an overall real GDP growth of 2.5 per cent in 2011, following a 2.9 per cent growth last year (2010).

“True, this is certainly not a record-breaking pace for Calgary, but an important turn of events took place in 2011 that was not part the economic picture in 2010: job creation. All in all, employment growth reached an estimated 3 per cent in 2011, as over 20,000 jobs were created in the census metropolitan area.”96

With the economy resuming job creation, this pace of economic growth is expected to be sustainable over the medium term since gains in employment are expected to translate into increases in personal income, retail sales, and construction activity, all of which will help lift the economic momentum.

The construction industry, which was one of the hardest hit sectors during the recession, is expected to grow by an estimated 5.7 per cent this year (2011) and 2.5 per cent in 2012. Residential construction is expected to be the main driver of the increased construction activity over the medium term. While some private sector projects will provide some support, non-residential construction activity is expected to soften over the next two years as the federal government infrastructure programs comes to an end.

“Thankfully, projects like the $1.5-billion office tower known as The Bow, the office towers at the $1-billion Quarry Park mixed-use development, the $445-million Trade and Technology Complex at the Southern Alberta Institute of Technology, the $1.3-billion South Health Campus, the $280-million Airport Trail Tunnel under the new runway, the $550-million Foothills Medical Centre upgrade, and the $1.3-billion Shepard Energy Centre natural-gas-fired generating plant will provide some offset and support non-residential construction activity in the near term.”97

While growth in the services-producing sector was modest in 2011, it is expected to rebound in 2012 supported by continuous employment gains. Across the services sector, the finance, insurance and real estate sector is expected to grow 2.9 per cent in 2012. This sector also employs the largest share of workers in Calgaryʼs services-producing sector. Output of the wholesale and retail trade industry is expected to increase 3.9 per cent in 2012, which is followed by a 3.6 per cent growth in the transportation and warehousing sector. Overall, services-producing industries in Calgary are expected to increase their production by 3.5 per cent in 2012.

“Continued strong population growth will fuel domestic demand and sound services sector growth over the medium term. Our forecast calls for an average annual increase in population of 2.2 per cent between 2013 and 2016, which will help fuel an average annual rise of 4.4 per cent in services sector output over the same time frame.”98

After two years of declines, employment in the Calgary Census Metropolitan Area (CMA) increased three per cent in 2011. According to the Conference Board of Canada, this translates into over 200,000 new jobs created during the year (2011). The positive impacts of increased employment were also visible on retail sales and personal income, which posted growth rates of 4.5 per cent and 2.2 per cent in 2011, respectively.

96 Conference Board of Canada, Metropolitan Outlook 1 – Winter 2012, p.62. 97 Ibid. 98 Ibid, p.63.



58

Overall, economic growth in the Calgary CMA is expected to accelerate to 3.6 per cent in 2012 and 4.9 per cent in 2013. Calgaryʼs economic growth in 2012 will only be second to Saskatoon (+4.0 per cent), which is benefiting from increased investment in the natural resources sector. Real GDP growth in the Calgary CMA is expected to average 4.3 per cent annually between 2013 and 2016, putting it back to first place in terms of real GDP growth among all CMAs included in the Conference Board of Canadaʼs Metropolitan Outlook.

Table 7: Real Gross Domestic Product Forecast: Calgary (% change, 2002 dollars)

Category 2009* 2010* 2011* 2012 2013 2014 2015 2016

Real GDP -4.4 2.9 2.5 3.6 4.9 4.3 4.0 3.9

Personal Income per Capita -3.4 2.1 2.2 2.2 4.0 3.4 3.1 2.8

Consumer Price Index (2002=1.0) -0.1 0.8 2.1 1.9 2.3 2.2 2.0 2.1

Population 2.8 1.8 2.2 2.6 2.3 2.2 2.2 2.2

Total Employment -0.7 -1.3 3.0 2.8 3.8 2.8 2.4 2.0

Unemployment Rate (%) 6.7 6.8 5.9 5.4 4.9 4.7 4.2 4.0

Total Housing Starts ('000s) 6.3 9.3 8.4 9.5 10.1 10.9 11.5 11.6

Retail Sales -7.9 5.6 4.5 5.0 6.6 6.0 5.8 5.2

Source: Conference Board of Canada, Metropolitan Outlook — Winter 2012

* Actual data or most recent estimates.

CONTRIBUTORY INFLUENCES A number of factors influence the Calgary economy. These factors include inflation, housing market, building permits, non-residential construction activity, office market and population. Each of these factors are discussed in more detail in the following sections.

Inflation

Prices for goods and services included in the all-items Consumer Price Index (CPI) increased 3.3 per cent year-over-year in October 2011 in the Calgary CMA. Provincially prices were up 3.4 per cent while national prices advanced 2.9 per cent over the same period. According to the City of Calgary, October was the first month in which local price increases outpaced the national average in two years.

Octoberʼs inflation was mainly driven by higher electricity costs and food prices. Food prices increased 2.6 per cent in the 12 months to October 2011, which is expected to contribute 0.40 per cent to the overall inflation in Calgary. The City of Calgary estimates that it takes about six to nine months for the trend in world raw food commodity inflation to pass through to Calgaryʼs food inflation and hence, expects a moderation in food prices over the near term.

“Calgarians felt rising food prices this year, as food prices rose in excess of wage increases. Lower income households were affected more given that food costs account for a bigger share of their net income. Acceleration in food commodity prices earlier this year could be attributed to increasing demand for food from emerging markets, and reduction in food stockpiles and supply, as several major grain producing regions experienced severe droughts in 2011.”99

99 City of Calgary, Inflation Review – October 2011, November 18, 2011, p.1.



59

The main upward pressure on Calgaryʼs October inflation came from price increases for shelter and transportation. Consumers in Calgary paid on average 1.6 per cent more on shelter costs and 4.6 per cent more on transportation costs in October 2011 compared to the same month of 2010.

The Conference Board of Canada expects overall inflation to be 2.1 per cent for 2011 as a whole in the Calgary CMA. Consumer prices in the Calgary CMA are forecast to increase 1.9 per cent in 2012 and 2.3 per cent in 2013, which is expected to be slow when compared to the provincial inflation over the same period. Calgaryʼs inflation rate is then forecast to average 2.1 per cent annually from 2014 to 2016, in line with the expected provincial inflation rate.

Figure 25: Consumer Price Index Forecast– Calgary and Alberta

(Per cent change, year-over-year)

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012f

2013f

2014f

2015f

2016f

% C

han

ge

Alberta Calgary

Source: Conference Board of Canada, Metropolitan Outlook – Winter 2012.

Housing Market

Recent data on housing starts signal that a recovery might well be underway in Calgaryʼs housing market. Calgary builders broke ground on a total of 1,106 units in November 2011, almost double the 555 units started in November 2010. While the year-over-year gain was supported by increases in both single-detached and multi-family markets, the main driver was the rise in multi-family production.

Single-detached starts increased 22 per cent year-over-year to 366 units in November 2011. According to Canada Mortgage and Housing Corporation (CMHC), this represented the fourth consecutive month in which single-detached starts were up on an annual basis.



60

“While the pace of activity has improved from earlier in the year, the extent of the recent year-over-year gains are also due to a comparatively weaker second half of 2010 when starts had moderated.”100

Production of multi-family units, which include semi-detached units, rows and apartments, increased from 189 units in November 2010 to 660 units in November 2011. This level of multi-family starts was the highest registered in any November since 2006 and the second highest since 1982.101

In comparison, housing starts in the Edmonton CMA declined 10 per cent year-over-year to 681 units in November 2011. Activity in both single-detached and multi-family markets was down in November 2011 compared to the same month in 2010.

Table 8: Housing Starts - January to November

Area 2010 2011 2010 2011 2010 2011

Alberta 14,777 12,559 7,961 8,993 22,738 21,552 -5.2%

Calgary CMA 5,449 4,619 3,327 3,703 8,776 8,322 -5.2%

Calgary City 4,075 3,541 2,810 3,372 6,885 6,913 0.4%

Edmonton CMA 5,753 4,648 3,648 3,993 9,401 8,641 -8.1%

Edmonton Ciy 3,240 2,829 2,545 2,788 5,785 5,617 -2.9%

Source: Canada Mortgage and Housing Corporation, Statistics Canada CANSIM Table 270001.

Single Multiple Total % Change

2010-2011

Despite the increased activity over the recent months, housing activity has generally been lower for the most part of 2011 compared to last year. According to CMHC, some factors impacting Calgary builders over the year included competition from the resale market, increased multi-family inventories and the lagged impacts of two years of employment declines recorded in the Calgary CMA. After eleven months of production, housing starts in the Calgary CMA totaled 8,322 units, down over five per cent from 8,776 units started in the first eleven months of 2010.

To the end of November 2011, single-detached starts in the Calgary CMA declined 15 per cent to 4,619 units. Over the balance of the year, single-detached starts are expected to reach 5,000 units this year (2011). This will represent a 14 per cent declined from 5,782 units started in 2010. As the economic recovery continues, demand for single-detached units is expected to improve next year (2012) which is expected to push single-detached starts ten per cent higher than the 2011 levels to 5,500 units.

For the first eleven months of 2011, multi-family starts in the Calgary CMA totaled 3,703 units, up 11 per cent from 3,327 units in 2010. However, multi-family production is expected to total 3,500 units for 2011 as a whole, showing little change from the 3,480 units in 2010. With more balanced market conditions, multi-family production is expected to increase 14 per cent year-over-year to 3,900 units in 2012.

100 Canada Mortgage and Housing Corporation, Housing Now Calgary CMA, December 2011, p.2. 101 Ibid.



61

All in all, CMHC is predicting total housing starts in the Calgary CMA to decline eight per cent to 8,500 units in 2011. Supported by gains in both single-detached and multi-family markets, total housing starts are then expected to increase 11 per cent to 9,400 units in 2012.

“Despite the lower level of activity experienced so far in 2011, new construction in 2012 is anticipated to see a lift as returning job creation, stronger net migration, and persistently low mortgage rates support the housing market.”102

Similarly, the Conference Board of Canada expects total housing starts in the Calgary CMA to reach 8,360 units in 2011 and just under 9,500 units in 2012. While the growth rate is expected to slow down, production in the housing market is expected to continue to improve and reach a total of 11,500 units by 2016. According to the Conference Board of Canada, the main support for the overall gain over the medium term is expected to come from increased activity in the multi-family market.

“With job creation resuming in 2011 and housing starts well below demographic requirements, we expect housing starts to rebound swiftly in 2012, growing 13 per cent to nearly 9,500 units. Continuing on a trend that started before the 2008–09 recession, growth in housing starts is forecast to be stronger in multiple units in 2012, at 19.5 per cent, than in single units, where growth is anticipated to come in at 8.6 per cent. Sound population growth throughout the forecast horizon will support a continued rise in housing starts. By 2016, housing starts are expected to reach over 11,500 units, of which almost half will be multiple units, a sharp contrast with historical standards.”103

Figure 26: Housing Starts Forecast: Calgary CMA

13,505

11,438

6,318

9,2628,363

10,11010,924

11,460

8,500

9,4009,447

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

To

tal

Ho

us

ing

Sta

rts

CMHC Conference Board of Canada

102 Canada Mortgage and Housing Corporation, Housing Now Calgary CMA, December 2011, p.2. 103 Conference Board of Canada, Metropolitan Outlook 1 – Winter 2012, p.62.



62

Calgaryʼs residential sales market also improved over 2011. Residential sales increased eight per cent year-over-year to 18,568 sales for 2011. According to the Calgary Real Estate Board (CREB), the overall increased momentum in 2011 was due to an increase experienced in the second half of the year. While residential sales activity for 2011 as a whole is still lower compared to historical standards, the gap has been narrowing.

“Recovering from tepid sales activity in the first half of 2011, early improvements in employment and migration resulted in a pickup in housing demand in the second half of the year. By the end of June 2011, year-to-date sales activity had only increased by two per cent compared to the second half of the year, where residential sales improved by 15 per cent.”104

Single-family home sales totaled 13,186 units in 2011, posting a nine per cent increase over the 2010 level. However, according to CREB, while sales increased, listings remained low pushing inventory levels down to 2,761 units. This represents a four months supply at the current sales ratio. The average price of a single-family home reached $466,402 in 2011, increasing one per cent from 2010.

“While there have been some strong monthly increases, primarily due to sales in the upper end skewing the prices, overall prices have remained fairly stable. Meanwhile, the year-end median price of $405,000 remains at levels similar to 2010.”105

On the condominium side, sales totaled 5,382 units in 2011, representing an increase of four per cent from the previous year. With listings also declining 12 per cent year-over-year, the inventory of condominiums in the Calgary CMA declined to 1,287 units representing just over four months of supply at the current sale rate. The average condominium price reached $287,172 in 2011, just one per cent shy of the 2010 level.

“Throughout 2011, elevated levels of inventories have limited price growth as consumers benefitted from sufficient supply of housing to choose from; however, as these inventories drop to levels more consistent with a balanced market, we can expect some moderate price growth moving forward.”106

CMHC is forecasting that Multiple Listing Service (MLS) sales in the Calgary CMA will increase from 20,996 units in 2010 to 22,200 units in 2011 as a result of gains in employment income and net migration.107 MLS sales in the Calgary CMA are then expected to increase by a further 2.3 per cent to 22,700 units in 2012. Average MLS resale prices in Calgary are forecast to increase 0.8 per cent to $402,000 in 2011, and by a further 2.2 per cent to $411,000 in 2012.108

“Many factors that support resale housing demand have become or remained favourable this year, including growth in full-time employment, low mortgage rates, and improved net migration. However, competing factors such as uncertainty in the global economy has kept some prospective buyers on the fence, and will continue to temper any large increases in sales.”109

104 Calgary Real Estate Board, Calgary Regional Housing Market Statistics, December 2011, p.1. 105 Ibid. 106 Ibid. 107 Canada Mortgage and Housing Corporation, Housing Market Outlook Calgary CMA, Fall 2011, p.4. 108 Ibid. 109 Ibid.



63

Rental Market

Calgaryʼs apartment vacancy rate declined to 1.9 per cent in October 2011. This was the second consecutive annual decline in vacancy rates and also the lowest level since October 2007. The decline was due to increased demand for rental accommodations supported by increased employment and net migration to the region.

The average rental apartment vacancy rate in Canadaʼs 35 major centers also declined from 2.6 per cent in October 2010 to 2.2 per cent in October 2011. The lowest vacancy rates were recorded in Regina (0.6 per cent), Winnipeg (1.1 per cent), and St. Johnʼs (1.3 per cent). The major centres with the highest vacancy rates in October 2011 were Windsor (8.1 per cent) and Saint John (5.9 per cent).

Figure 27: Private Apartment Vacancy Rates in Selected CMAs

and Canada (%) - October 2011

8.1%

5.9%

3.3%

2.6%

2.5%

2.4%

2.2%

2.1%

1.9%

1.6%

1.4%

1.4%

1.4%

1.3%

1.1%

0.6%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0%

Windsor

St. John NB

Edmonton

Saskatoon

Montreal

Halifax

Canada

Victoria

Calgary

Quebec

Toronto

Ottawa

Vancouver

St. John's NL

Winnipeg

Regina


The average rent for a two-bedroom apartment in the Calgary CMA increased 1.8 per cent year-over-year to $1,084 per month in October 2011. This came after a 2.6 per cent decline in October 2010 due to higher vacancy rates. The largest annual increases were recorded for bachelor and two-bedroom units in 2011.

“Despite the reduction in vacancies, the average rent in Calgary remained relatively stable this year. Declining vacancies have provided some rental owners an opportunity to offer fewer incentives and maintain rental rates.”110

110 Canada Mortgage and Housing Corporation, Rental Market Report Calgary CMA, Fall 2011, p.2.



64

Nationally, the average rent for a two-bedroom unit was $883 per month in October 2011, up from an average of $860 per month in October 2010. This represented an increase of 2.2 per cent on an annual basis and was similar to that recorded between October 2009 and 2010. Among the major CMAs included in the CMHCʼs Rental Market Survey, Calgary had the fourth highest average monthly rent for a two-bedroom apartment in October 2011. The highest average monthly rents were in Vancouver ($1,237), Toronto ($1,149) and Ottawa ($1,086).

Housing Affordability

Housing affordability, as measured by the RBC Housing Affordability Measure (HA Measure), shows the proportion of median pre-tax household income required to service the cost of mortgage payments (principle and interest), property taxes and utilities on homes and condos.111 The higher the measure, the more difficult it is to afford a house.

According to the November 2011 RBC Housing Trends and Affordability report, housing affordability across Canada improved widely in the third quarter of 2011, as a result of lower mortgage rates. While the European debt crisis has caused a lot of uncertainty in the global economy, one of the positive outcomes for Canadians has been the benefit of lower interest rates. Nationally, the RBC HA Measure declined by 0.6 percentage points quarter-over-quarter to 48.8 per cent for two-story homes, and by 0.2 percentage points to 29.0 per cent for condos.112 Homeownership in Alberta in the third quarter of 2011 remained the most affordable among provinces, relatively unchanged from the previous quarter.

The HA Measure in the two-story home segment declined in all of the major markets in Table 9 on a quarter-over-quarter basis in the third quarter of 2011. Calgaryʼs HA Measure for a two-story home fell 0.3 percentage points to 38.2 per cent in the third quarter of 2011, while Edmontonʼs HA Measure declined 0.6 percentage points quarter-over-quarter to 38.5 per cent.

The HA Measure in the condo segment declined in only Ottawa (-0.2 percentage points) and Edmonton (-0.3 percentage points) on a quarterly basis in the third quarter of 2011. Calgaryʼs HA Measure for a standard condo increased to 23.2 per cent, from 23.0 per cent the previous quarter.

Table 9: RBC Housing Affordability Measures

Region Avg. Price

Qualifying

Income

HA

Measure Avg. Price

Qualifying

Income

HA

MeasureCanada $396,100 $87,000 48.8% $232,800 $51,600 29.0%

Toronto $593,800 $126,000 61.3% $326,700 $70,400 34.3%

Montreal $365,300 $80,000 52.2% $227,200 $50,000 32.6%

Vancouver $847,400 $160,900 94.4% $419,100 $80,500 47.2%

Ottawa $379,800 $90,600 42.9% $257,000 $59,400 28.2%

Calgary $414,700 $89,300 38.2% $254,500 $54,300 23.2%

Edmonton $372,900 $84,700 38.5% $199,500 $46,000 20.9%

Note: Qualifying Income is the minimum annual income used by lenders to measure the ability

of a borrower to make mortgage payments.

Source: RBC Housing Trends and Affordability, November 2011

Standard Two-Storey (Q3 2011) Standard Condo (Q3 2011)

111 RBC Economics, Housing Trends and Affordability, November 2011, p.7. 112 Ibid, p.1.



65

Building Permits

Calgary builders took out $1.3 billion in building permits in the third quarter of 2011, up 12 per cent from the previous quarter and up 54 per cent year-over-year. More than half of the building permits issued in the third quarter of 2011 were residential permits, worth $841.7 million. The value of both residential and non-residential permits was up from a year ago in the third quarter of 2011.

Following the gains recorded in the third quarter of 2011, the value of building permits issued in November 2011 increased 40 per cent from the previous year to $338.1 million (+34.5 per cent for residential permits and +50.5 per cent for non-residential permits). The only component that registered an annual decline in November was the institutional and government permits at -41.5 per cent.

Nationally, the value of building permits declined 3.6 per cent to $6.1 billion in November 2011. This followed an 11.6 per cent gain registered in the previous month. According to Statistic Canada, Novemberʼs decline was mostly due to a decline in the non-residential sector, particularly in Ontario.

The total value of building permits was up in 18 of the 34 CMAs in Canada in November 2011, with Vancouver (+$278.8 million), Ottawa (+$123.7 million) and Quebec (+$60.9 million) posting the largest gains. In contrast, London, ON and Montreal recorded the largest declines of -$256.9 million and -$162.1 million respectively over the same period.

Figure 28: Value of Building Permits - Calgary CMA

702612

378

219

456570

629545

695

509 469 486

710842

626 792

653

361

956

303

791

319

362

340301

917 452

463

-

200

400

600

800

1,000

1,200

1,400

1,600

Q1

2008

Q2

2008

Q3

2008

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Q3

2009

Q4

2009

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2010

Q2

2010

Q3

2010

Q4

2010

Q1

2011

Q2

2011

Q3

2011

$ m

illio

ns

Residential Non-Residential

Source: Statistics Canada, CANSIM Table 260003.



66

Non-Residential Building Construction

Investment in non-residential building construction in the Calgary CMA totaled $836 million in the fourth quarter of 2011. This level of investment was up almost 3.0 per cent from the previous quarter, but down over 10 per cent compared to the fourth quarter of 2010.113

Fourteen of the 34 census metropolitan areas in Canada recorded annual gains in non-residential construction investment in the fourth quarter of 2011, while the remaining CMAs posted losses. The Abbotsford-Mission CMA (+209 per cent) and Thunder Bay CMA (+46 per cent) posted the largest year-over-year percentage increases in non-residential building construction investment, while Kelowna (-39 per cent) and Barrie (-31 per cent) recorded the largest percentage declines.

Major Projects

There were a total of 165 major projects worth $18.1 billion that were either proposed, announced or under construction in the city of Calgary as of November 2011. The project sectors with the greatest values in November 2011 were Commercial/Retail ($6.1 billion), Infrastructure ($5.0 billion) and Institutional ($3.3 billion).

Table 10: Calgary Major Projects (Proposed, Announced or Under Construction)

Project Sector Total Projects Cost ($mill)

Commercial/Retail 35 6,095.7

Infrastructure 38 5,029.6

Institutional 27 3,257.4

Power 2 1,500.0

Residential 51 1,167.2

Tourism/Recreation 11 763.3

Commercial/Retail/Residential 1 300.0

Total 165 18,113.2

Source: Calgary Economic Development November 2011 Calgary Major Projects

Office Market

The Calgary office market strengthened through the third quarter of 2011, despite forecasts that it would soften. Calgaryʼs overall office vacancy rate declined to 7.2 per cent in the third quarter of 2011, from 9.8 per cent in the third quarter of 2010.114

“With oil prices hovering near record highs at $100 per barrel, the energy sector continues to be the dominant force in the Calgary market. Consistent with historical trends, vacancy has decreased as drilling activity increases. Energy companies are expanding once again and committing to additional space. This has had a positive spinoff effect for supplementary industries, with engineering and consulting firms expanding to take advantage of the affordable quality space available.”115

113 Statistics Canada, The Daily, Investment in non-residential building construction Fourth Quarter 2011, January 17,

2012. 114 Avison Young, Calgary Office Market Report – Third Quarter 2011, p.1. 115 Avison Young, Office Market Report Mid-Year 2011 (Canada, U.S.), p.4.



67

The vacancy rate in Downtown Calgary fell to 6.2 per cent in the third quarter of 2011, a significant decline from the nearly 9.0 per cent vacancy rate recorded in the third quarter of 2010. With no new major supply of downtown office space planned until late 2015, Avison Young is forecasting the downtown vacancy rate will drop below 5.0 per cent within the next 12 months.116

Table 11: Calgary Office Market Vacancy Rates (Q3 2010 and Q3 2011)

Q3 2010 Q3 2011

9.8% 7.2%

8.9% 6.2%

8.6% 8.8%

13.2% 7.5%

11.4% 10.4%

Suburban South

Suburban North

Source: Avison Young, Calgary Office Market Summary Report Third

Quarter 2010 and 2011.

Category Vacancy Rate

Overall Office Market

Downtown

Beltline

Population

In April each year, an official count of population and dwelling units is collected by the City of Calgary through the Civic Census. According to the results of the 2011 Civic Census, Calgaryʼs population reached an estimated 1,090,936 in April 2011. This represented a growth rate of 1.8 per cent from the previous year, a rate that is similar to that experienced in 2001 and 2003.

The Conference Board of Canada forecasts that the total population of Calgary will reach an estimated 1.3 million in 2012 and 1.4 million in 2014. Calgaryʼs population is then expected to reach 1.4 million by 2016. Net migration is expected to be the main driver of total population growth over the next five years, accounting for just over 60 per cent of the growth. Natural growth is expected to account for the remaining 38 per cent of total population growth from 2012 to 2016.

116 Avison Young, Calgary Office Market Report – Third Quarter 2011, p.2.



68

Figure 29: Calgary (city) Population Growth: 2000 - 2016

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

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2000

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f

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f

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f

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f

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To

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on

Natural Increase Net Migration

Source: Conference Board of Canada, Metropolitan Outlook 1 – Winter 2012.



69

TRENDS IN THE LABOUR MARKET This section examines labour market information for Canada, Alberta, and the Calgary Region. The information provided in this section is based upon Statistics Canadaʼs Labour Force Survey.

CANADA

Q4 2011 Employment in Canada fell by 21,800 in the fourth quarter of 2011 compared to the previous quarter. In December 2011, employment in Canada increased by a modest 17,500, after declining by 73,000 over the previous two months.

“[Decemberʼs] job gains were certainly welcome news after two months of significant declines. However, neither the gain nor the underlying details would suggest any reversal of fortune for the Canadian economy as the 3-month moving average fell by more than 18,000 jobs. High levels of uncertainty surrounding any number of international developments, notably the European debt crisis, have clearly shaken the confidence of both consumers and businesses.”117

Year-over-year, employment in Canada increased by 216,000 or 1.3 per cent in the fourth quarter of 2011.

Table 12: Labour Force Survey Statistics - Canada

Canada Oct-11 Nov-11 Dec-11 Q4 2011 Q3 2011

Quarterly

Change Q4 2010

Annual

Change

Population 28,082,300 28,107,100 28,130,800 28,106,700 28,030,600 76,100 27,790,200 316,500

Labour Force 18,719,900 18,721,700 18,745,300 18,729,000 18,712,100 16,900 18,549,900 179,100

Employed 17,345,600 17,327,000 17,344,500 17,339,000 17,360,800 -21,800 17,123,000 216,000

Unemployed 1,374,200 1,394,700 1,400,800 1,389,900 1,351,300 38,600 1,427,000 -37,100

Participation Rate 66.7% 66.6% 66.6% 66.6% 66.8% -0.2% 66.7% -0.1%

Employment Rate 61.8% 61.6% 61.7% 61.7% 61.9% -0.2% 61.6% 0.1%

Unemployment Rate 7.3% 7.4% 7.5% 7.4% 7.2% 0.2% 7.7% -0.3%

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

TD Economics expects employment growth to remain subdued in the New Year, averaging only 10,000 new jobs per month in 2012.

“All said for the coming year, TD Economics expects the unemployment rate to continue treading higher, likely to about 7.7%, while job gains will average a paltry 10,000 per month, more heavily weighted to the second half of the year.”118

117 TD Economics, Canadian Employment, Canadaʼs labour market ends 2011 on a modest note, January 6, 2012. 118 Ibid.



70

Figure 30: Employment in Canada

16,400,000

16,600,000

16,800,000

17,000,000

17,200,000

17,400,000

17,600,000

2008

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-11

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-09

2010

-11

2011

-01

2011

-03

2011

-05

2011

-07

2011

-09

2011

-11

Employment

Unemployment

The unemployment rate in Canada averaged 7.4 per cent in the fourth quarter of 2011, up from 7.2 per cent the previous quarter but down from 7.7 per cent year-over-year. In December 2011, Canadaʼs unemployment rate rose to 7.5 per cent, from 7.4 per cent the previous month, as more people participated in the labour market.119 RBC Economics is forecasting the unemployment rate will gradually decline to below 7.0 per cent, but not until mid 2013.

“Our expectation that the worst of the global debt crisis will pass in early 2012 and that the US economy has re-established its stronger growth profile is consistent with hiring picking up again in early 2012. The unemployment rate is forecasted to decline gradually to 6.9% by mid-2013 at which point labour shortages will become more of an issue, and wage pressures are likely to pick up.”120

119 Statistics Canada, The Daily, Labour Force Survey December 2011, January 6, 2012. 120 RBC Economics, Economic and Financial Market Outlook, December 2011, p.6.



71

Figure 31: Unemployment Rate in Canada

5.0%

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

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2008-0

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-11

Un

em

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ate

(%

)

Unemployment rates declined in six of the 10 provinces in Canada in December 2011. Alberta had the lowest unemployment rate in the country in December 2011 at 4.9 per cent, followed by Saskatchewan (5.2 per cent) and Manitoba (5.4 per cent). While the unemployment rate in Newfoundland and Labrador declined to 12.8 per cent in December 2011, it remained the highest in the country.

Figure 32: Unemployment Rates Q4 2011 (Canada and Provinces)

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Canada

NL

PEI

NS

NB

QC

ON

MN

SK

AB

BC

Un

em

plo

ym

en

t R

ate

(%

)

Oct-11 Nov-11 Dec-11

Source: Statistics Canada, Labour Force Survey, seasonally adjusted



72

Employment by Type of Work, Gender and Age

On a quarterly basis, almost three quarters of the job losses in Canada during the fourth quarter of 2011 were in part-time employment. Year-over-year, full-time employment in Canada rose by 1.7 per cent (+236,000), while part-time employment declined by 0.6 per cent (-19,900).

Employment for men fell by 18,100 or 0.2 per cent in the fourth quarter of 2011, compared to the previous quarter. Employment for women also declined on a quarterly basis, though only marginally, by 3,700 or 0.04 per cent. Year-over-year, employment was up by 1.3 per cent for both men and women in the fourth quarter of 2011.

Employment for youth and core-aged adults both declined on a quarterly basis in the fourth quarter of 2011, with employment for youth down 0.9 per cent and employment for adults aged 25 - 54 down 0.13 per cent. Employment for the 55+ age group increased however, rising by almost 17,000 or 0.6 per cent in the fourth quarter of 2011. On a year-over-year basis, employment increased in all of the age categories in the fourth quarter of 2011, with the most significant growth seen in the 55+ age category (+2.7 per cent).

“In December [2011], employment grew by 24,000 among people aged 55 and over. Employment for this age group was up 3.4% (+102,000) compared with 12 months earlier. This increase was almost entirely due to the aging of the population, as the number of people aged 55 and over grew by 3.2% over the period.”121

Table 13: Employment in Canada by Type of Work, Gender and Age

Canada Oct-11 Nov-11 Dec-11 Q4 2011 Q3 2011

Quarterly

Change Q4 2010

Annual

Change

Employment 17,345,600 17,327,000 17,344,500 17,339,000 17,360,800 -21,800 17,123,000 216,000

Full-time 14,034,400 14,069,000 14,043,500 14,049,000 14,055,000 -6,000 13,813,000 236,000

Part-time 3,311,200 3,257,900 3,301,000 3,290,000 3,305,800 -15,800 3,309,900 -19,900

Men 9,123,000 9,082,900 9,092,000 9,099,300 9,117,400 -18,100 8,987,000 112,300

Women 8,222,600 8,244,000 8,252,400 8,239,700 8,243,400 -3,700 8,136,000 103,700

15 - 24 years 2,479,500 2,461,700 2,444,900 2,462,000 2,484,900 -22,900 2,440,000 22,000

25 - 54 years 11,795,300 11,776,900 11,787,100 11,786,400 11,802,200 -15,800 11,672,800 113,600

55 years + 3,070,900 3,088,400 3,112,400 3,090,600 3,073,700 16,900 3,010,200 80,400


Employment by Industry

During the final quarter of 2011, employment increased quarter-over-quarter in nine industries in Canada, with the largest gains (in numbers) occurring in the professional, scientific and technical services (+29,300) and natural resources (+27,100) sectors. Employment decreased in the remaining seven industries in the fourth quarter of 2011, with employment in manufacturing down by almost 58,000.

On an annual basis, employment increased in 10 industries in the fourth quarter of 2011, with the natural resources and accommodation and food services sectors posting the highest growth rate of 7.0 per cent. Employment in the utilities sector in Canada declined 7.7 per cent year-over-year in the fourth quarter of 2011, while employment in the manufacturing sector was down by 2.1 per cent.

121 Statistics Canada, The Daily, Labour Force Survey December 2011, January 6, 2011.



73

Table 14: Employment in Canada by Industry

Canada Q4 2011 Q3 2011

Quarterly

Change Q4 2010

Annual

Change

All Industries 17,339,000 17,360,800 -21,800 17,123,000 216,000

Agriculture 304,100 300,900 3,200 302,100 2,000

Natural resources 351,300 324,200 27,100 328,600 22,700

Utilities 135,900 134,600 1,300 147,200 -11,300

Construction 1,266,700 1,278,400 -11,700 1,239,300 27,400

Manufacturing 1,715,300 1,773,000 -57,700 1,752,500 -37,200

Trade 2,669,900 2,690,600 -20,700 2,670,300 -400

Transportation & warehousing 849,200 857,700 -8,500 836,500 12,700

Finance, insurance, real estate & leasing 1,065,500 1,096,700 -31,200 1,086,100 -20,600

Professional, scientific & technical services 1,338,100 1,308,800 29,300 1,276,600 61,500

Business, building & other support services 663,400 679,500 -16,100 675,800 -12,400

Educational services 1,223,700 1,205,100 18,600 1,209,200 14,500

Health care & social assistance 2,116,000 2,090,400 25,600 2,057,700 58,300

Information, culture & recreation 772,300 789,900 -17,600 773,600 -1,300

Accommodation & food services 1,119,700 1,109,600 10,100 1,046,700 73,000

Other services 775,600 755,200 20,400 749,300 26,300

Public administration 972,500 966,300 6,200 971,500 1,000




74

ALBERTA

Q4 2011 While the Canadian economy as a whole shed 22,000 jobs on a quarterly basis in the fourth quarter of 2011, employment in Alberta increased by 18,700 or 0.9 per cent during the same time period. Alberta gained 7,500 new jobs in October, 4,500 jobs in November, and 800 jobs in December 2011. In October 2011, Alberta had the fastest rate of employment growth among provinces, with an increase of 4.3 per cent year-over-year.122

While employment in Alberta increased for the seventh consecutive month in December 2011, growth in the provinceʼs labour market has definitely slowed down, especially in the second half of the year.

“Throughout 2011, Alberta was without question the jobs engine of the Canadian economy. For the entire year the average level of employment was 3.8% higher than it was in 2010—the comparable figure for Canada was a gain of only 1.5%. Alberta showed strong growth in almost every sector, and particularly in trade, health care, and manufacturing. Only the public sector and utilities finished the year with fewer jobs than December 2010. Still, the pace of job creation in Alberta has moderated significantly throughout the year—particularly since June when there was a monthly gain of 22,000. And while Alberta is still expected to add jobs in 2012, the slower pace of job creation is likely to continue this year.”123

Year-over-year, employment was up by 94,600 or 4.7 per cent in Alberta in the fourth quarter of 2011, more than triple the national growth rate of 1.3 per cent. Among the economic regions in Alberta, Edmonton had the highest rate of employment growth in the fourth quarter of 2011 on a year-over-year basis (6.7 per cent), followed by Wood Buffalo (6.4 per cent), Red Deer (4.7 per cent), Athabasca-Grand Prairie-Peace River (3.6 per cent), Calgary (3.1 per cent) and Lethbridge-Medicine Hat (1.5 per cent). Employment in the Banff-Jasper-Rocky Mountain House economic region was down by 4.4 per cent in the fourth quarter of 2011, while employment in the Camrose-Drumheller region was down by 1.7 per cent. 124

Table 15: Labour Force Statistics - Alberta

Alberta Oct-11 Nov-11 Dec-11 Q4 2011 Q3 2011

Quarterly

Change Q4 2010

Annual

Change

Population 3,022,100 3,025,500 3,028,800 3,025,500 3,014,100 11,400 2,976,300 49,200

Labour Force 2,239,600 2,242,500 2,241,100 2,241,100 2,233,000 8,100 2,156,500 84,600

Employed 2,125,700 2,130,200 2,131,000 2,129,000 2,110,300 18,700 2,034,400 94,600

Unemployed 113,900 112,300 110,100 112,100 122,700 -10,600 122,000 -9,900

Participation Rate 74.1% 74.1% 74.0% 74.1% 74.1% 0.0% 72.5% 1.6%

Employment Rate 70.3% 70.4% 70.4% 70.4% 70.0% 0.4% 68.4% 2.0%

Unemployment Rate 5.1% 5.0% 4.9% 5.0% 5.5% -0.5% 5.7% -0.7%


122 Statistics Canada, The Daily, Labour Force Survey October 2011, November 4, 2011. 123 ATB Financial, Weekly Economic Bulletin, January 6, 2012, p.1. 124 Statistics Canada, CANSIM Table 2820054, Labour Force Survey, 3-month moving average, seasonally unadjusted.



75

Unemployment

Albertaʼs unemployment rate averaged 5.0 per cent in the fourth quarter of 2011, down from 5.5 per cent the previous quarter and down from 5.7 per cent year-over-year. Among the economic regions in Alberta, Red Deer and Edmonton had the highest average unemployment rate125 in the fourth quarter of 2011 (5.2 per cent), followed by Calgary and Athabasca-Grande Prairie-Peace River (5.1 per cent), Wood Buffalo (4.9 per cent), Lethbridge-Medicine Hat (4.5 per cent), Camrose-Drumheller (4.2 per cent) and Banff-Jasper-Rocky Mountain House (3.1 per cent).

The average length of unemployment in Alberta rose to 18.1 weeks in December 2011, quickly approaching the national average of 19.6 weeks. In comparison, the average duration of unemployment in the U.S. reached 40.9 weeks in December – the highest level ever recorded.

Figure 33: Duration of Unemployment for Canada and Alberta

0

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Canada Alberta


Employment by Type of Work, Gender and Age

Year-over-year, full-time employment in Alberta increased 6.1 per cent, accounting for all of the employment gains in the fourth quarter of 2011. Part-time employment declined 1.3 per cent in the fourth quarter of 2011.

Both men and women in Alberta experienced healthy gains in employment on an annual basis in the fourth quarter of 2011. Employment for men increased 5.1 per cent year-over-year in the fourth quarter of 2011 and employment for women increased 4.3 per cent.

125 Statistics Canada, CANSIM Table 2820054, Labour Force Survey, 3-month moving average, seasonally unadjusted.



76

Table 16: Employment in Alberta by Type of Work, Gender, and Age


Annual

Change

Employment 2,122,300 2,125,300 2,129,200 2,125,600 2,029,800 95,800

Full-time 1,760,800 1,765,100 1,758,400 1,761,400 1,660,900 100,500

Part-time 361,500 360,200 370,900 364,200 368,900 -4,700

Men 1,179,300 1,171,600 1,170,700 1,173,900 1,117,200 56,700

Women 943,000 953,600 958,600 951,700 912,600 39,100

15 - 24 years 316,500 313,300 322,400 317,400 305,300 12,100

25 - 64 years 1,732,400 1,738,000 1,736,700 1,735,700 1,663,900 71,800

65 years + 73,400 74,000 70,200 72,500 60,600 11,900

Source: Statistics Canada, CANSIM Table 2820001, Labour Force Survey, unadjusted for seasonality

Employment increased in all of the age categories in the fourth quarter of 2011. While employment growth was in the 4.0 per cent range for Alberta workers under 65 years of age, employment in the 65+ age category grew by an impressive 20 per cent year-over-year in the fourth quarter of 2011.

Looking more in-depth at the mature workforce in Alberta, employment increased approximately 8.0 per cent year-over year in the fourth quarter of 2011 in the 50 – 54, 55 – 59, and 60 – 64 age categories. Employment rose 16.0 per cent in the 65 – 69 age category, and 28 per cent in the 70+ age category.

Employment by Industry

Employment increased in two-thirds of the industries in Alberta year-over-year in the fourth quarter of 2011, with the most notable increases (in numbers) seen in retail trade (+14,100), mining and oil and gas (+13,300), manufacturing (+11,500), professional, scientific and technical services (+10,700), agriculture (+10,400) and health care and social assistance (+9,500). Employment declined year-over-year in the remaining industries, with employment down more than 26 per cent in the utilities industry.

“An analysis of job creation in 2011 by sector reveals some interesting trends. Almost every sector posted an increase, but the bulk of the new jobs created were in retail and wholesale trade, oil and gas extraction, health care and social assistance, agriculture and manufacturing . Those trends are likely to continue in 2012, especially in health care, oil and gas, and manufacturing. These were some of the sectors hardest hit during the 2008-09 downturn, and they are still rebuilding. The ageing population will ensure that health care and social assistance will remain near the top for new jobs in the years to come.”126

126 ATB Financial, Weekly Economic Bulletin, January 6, 2012, p.6.



77

Table 17: Employment in Alberta by Industry (unadjusted)


Annual

Change

All Industries 2,122,300 2,125,300 2,129,200 2,125,600 2,029,800 95,800

Agriculture 61,100 53,700 53,700 56,200 45,800 10,400

Forestry and logging with support activities 6,200 6,800 3,400 5,500 3,200 2,300

Mining and oil and gas extraction 151,000 161,800 166,200 159,700 146,400 13,300

Utilities 12,900 14,600 14,800 14,100 19,200 -5,100

Construction 216,600 220,100 217,500 218,100 219,300 -1,200

Manufacturing 142,900 132,800 133,300 136,300 124,800 11,500

Wholesale trade 89,400 87,300 84,700 87,100 81,400 5,700

Retail trade 244,700 238,500 257,000 246,700 232,600 14,100

Transportation & warehousing 115,600 112,000 109,000 112,200 103,500 8,700

Finance, insurance, real estate and leasing 102,600 101,900 98,800 101,100 102,100 -1,000

Professional, scientific & technical services 154,900 162,900 160,800 159,500 148,800 10,700

Business, building & other support services 75,300 73,400 72,400 73,700 75,400 -1,700

Educational services 129,100 127,900 132,700 129,900 131,300 -1,400

Health care and social assistance 231,000 233,400 233,500 232,600 223,100 9,500

Information, culture & recreation 78,900 81,000 75,100 78,300 70,000 8,300

Accommodation & food services 123,800 123,300 123,900 123,700 117,800 5,900

Other services 103,400 112,800 111,200 109,100 100,400 8,700

Public administration 82,800 81,200 81,300 81,800 84,800 -3,000

Source: Statistics Canada, CANSIM Table 2820007, Labour Force Survey, unadjusted for seasonality

ATB Financial expects the oil and gas and manufacturing sectors to lead employment growth in Alberta in 2012, while public sector employment will experience further declines in 2012, as governments at all levels work toward lowering deficits.

“Alberta may not experience many outright layoffs in the public sector as it did back in the 1990s, but through attrition and freezes on hiring, the three levels of government may continue to see some shrinkage this year [2012].”127

127 ATB Financial, Weekly Economic Bulletin, January 6, 2012, p.6.



78

CALGARY CENSUS METROPOLITAN AREA (CMA)

Q4 2011 Employment in the Calgary CMA averaged 731,900 in the fourth quarter of 2011. This represented an increase of 0.5 per cent from the previous quarter and an increase of 4.1 per cent year-over-year. The most significant year-over-year employment gains in the fourth quarter of 2011 were in oil and gas (+10,000), professional, scientific and technical services (+9,600) and trade (+8,300). Employment in the utilities sector was down 22 per cent year-over-year in the fourth quarter of 2011, while employment in finance, insurance, real estate and leasing was down 12 per cent.128

“Since the recovery in 2010, there has been a geographic shift of job creation centres in Alberta. Although the Calgary Economic Region (CER) led job creations in professional, scientific and technical services, trade and mining, oil and gas industries, the rest of Alberta added more jobs in manufacturing, information, culture and recreation, and finance, insurance, real estate and leasing industries.”129

Table 18: Labour Force Statistics - Calgary CMA

Calgary CMA Oct-11 Nov-11 Dec-11 Q4 2011 Q3 2011

Quarterly

Change Q4 2010

Annual

Change

Population 1,038,300 1,039,800 1,041,300 1,039,800 1,034,900 4,900 1,019,500 20,300

Labour Force 772,600 773,900 776,900 774,500 774,300 200 749,600 24,900

Employed 729,000 732,200 734,500 731,900 728,600 3,300 702,900 29,000

Unemployed 43,600 41,800 42,400 42,600 45,700 -3,100 46,700 -4,100

Participation Rate 74.4% 74.4% 74.6% 74.5% 74.8% -0.3% 73.5% 1.0%

Employment Rate 70.2% 70.4% 70.5% 70.4% 70.4% 0.0% 68.9% 1.4%

Unemployment Rate 5.6% 5.4% 5.5% 5.5% 5.9% -0.4% 6.2% -0.7%

Source: Statistics Canada, CANSIM Table 2820116, Labour Force Survey, 3-month moving average, seasonally adjusted

Unemployment

Calgaryʼs unemployment rate averaged 5.5 per cent in the fourth quarter of 2011, down from 5.9 per cent the previous quarter. The Calgary CMAʼs labour force was virtually unchanged quarter over quarter. Calgaryʼs unemployment rate was also down from 6.2 per cent in the final quarter of 2010.

Among the 15 metropolitan areas shown in Figure 34, six had an unemployment rate of 5.5 per cent or less in December 2011, including Calgary and Edmonton. Regina had the lowest unemployment rate among major metropolitan areas in Canada in December 2011 at 3.8 per cent, while Windsor had the highest at 10.5 per cent.

128 Statistics Canada, Labour Force Survey CANSIM Table 2820011, unadjusted (3 month moving average) 129 City of Calgary, October 2011 Labour Market Review, November 4, 2011, p.1.



79

Figure 34: Unemployment Rates of Canadian Cities (CMAs)—December 2011

3.8%

4.7%5.1% 5.4% 5.5% 5.5% 5.7% 5.9%

6.3%6.9%

7.4% 7.5%

8.6% 8.8%

10.5%

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Calgaryʼs participation rate130 rose slightly to 74.6 per cent in December 2011, from 74.4 per cent the previous month, while Edmontonʼs participation rate declined to 73.8 per cent in December 2011, from 74.3 per cent the previous month. Historically, Calgaryʼs participation rate has been much higher than that of Edmontonʼs. In 2006, the gap between Calgaryʼs and Edmontonʼs participation rates averaged 6.5 percentage points. This gap has narrowed to an average of 1.0 percentage point in 2011, with Edmontonʼs participation rate matching Calgaryʼs in October 2011.

Figure 35: Labour Force Participation Rates - Calgary CMA and Edmonton CMA

62.0%

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72.0%

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Calgary Edmonton

130 Total labour force expressed as a percentage of the population aged 15 years and over that is either employed or

actively looking for employment.



80

Calgary continued to have the highest participation rate among metropolitan areas in Canada in December 2011, followed closely by Edmonton and Regina. Among the 15 metropolitan areas shown in Figure 36, Windsor had the lowest participation rate in December 2011 at 61.8 per cent.

Figure 36: Participation Rates of Canadian Cities (CMAs) - December 2011

61.8% 63.2% 63.4% 64.9% 66.6% 66.9%69.3% 69.7% 69.9% 70.3% 71.1% 71.6% 73.2% 73.8% 74.6%

0.0%

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81

CALGARY & AREA EMPLOYER SURVEY For each quarter of 2011, a survey was conducted of Calgary and area companies. The purpose of the survey was to gather information from employers on their recruitment and retention practices and various other employment issues they were facing. In the first quarter of 2011, large-sized companies with 100 or more employees were surveyed, in the second quarter, medium-sized companies with 50 – 99 employees were surveyed, in the third quarter, small-sized companies with 10 – 49 were surveyed, and in the fourth quarter, micro-sized companies with less than 10 employees were surveyed and reported on.

Q4 2011 SURVEY RESULTS: MICRO-SIZED COMPANIES (<10 EMPLOYEES) In the fourth quarter of 2011, a survey was conducted of 205 Calgary and area micro-sized companies. It should be noted that results are presented as received, with no statistical analysis. For additional information on survey methodology, see Appendix A.

Profile of Companies

The 205 companies surveyed employ approximately 909 people. Of this total, 66 per cent are full-time employees, 20 per cent are part-time employees, 12 per cent are contract workers, and two per cent are seasonal workers.

Table 19: Number of Employees and Companies Surveyed in Q4 2011

IndustryTotal

Employees

Number of

Companies

Mining & Oil & Gas 89 20Construction 95 21Manufacturing 83 20Wholesale & Retail Trade 93 21Transportation & Warehousing 103 20Professional, Scientific & Technical Services 86 20Health Care & Social Assistance 98 22Accommodation & Food Services/Arts & Entertainment 93 21

Finance, Insurance, Real Estate & Leasing 81 20Other 88 20

Total 909 205

Note: “Other” represents companies from the remainder of the industry categories: Agriculture, Utilities, Information and Culture, Management of Companies, Administrative and Support Services, Other Services, and Public Administration.



82

Business Activity

For companies surveyed in Q4 2011, the same percentage of companies expanded as downsized in the year prior to their survey, unchanged from the Q4 2010 results.

Companies were asked questions about their past and future business activity. Specifically, they were asked if their company expanded or downsized in the 12 months prior to their survey, and if they anticipated a business expansion or downsize in the 12 months following their survey.

Thirteen per cent of the companies surveyed in Q4 2011 expanded in the 12 months prior to their survey and 13 per cent downsized, resulting in a neutral balance of opinion.131 In Q4 2010, 14 per cent of the companies expanded in the 12 months prior to their survey and 14 per cent downsized, also resulting in a neutral balance of opinion.

In the fourth quarter of 2011, companies in the mining and oil and gas industry reported a significant improvement in past business activity, with 25 per cent of the companies expanding in the previous year, compared to 25 per cent of the companies reporting they downsized when surveyed in Q4 2010. Transportation and warehousing companies also reported more positive results when surveyed in Q4 2011, with 20 per cent on balance expanding in the previous year. On the other hand, approximately one-quarter of the accommodation and food services/arts and entertainment companies surveyed in the fourth quarter of 2011 reported they downsized in the previous 12 months, a deterioration from the Q4 2010 results. Past Business ActivityPercentage of companies that expanded or downsized in the 12 months prior to their survey

Expanded Downsized Balance Expanded Downsized BalanceOverall Results 14% 14% 0% 13% 13% 0%

Results by IndustryMining & Oil & Gas 5% 30% -25% 25% 0% 25%Construction 15% 30% -15% 5% 14% -10%Manufacturing 5% 5% 0% 10% 20% -10%Wholesale & Retail Trade 20% 15% 5% 14% 19% -5%Transportation & Warehousing 5% 10% -5% 20% 0% 20%Professional, Scientific & Technical Services 10% 10% 0% 10% 15% -5%Health Care & Social Assistance 15% 0% 15% 9% 9% 0%Accommodation & Food Services/Arts & Entertainment 5% 19% -14% 5% 29% -24%Finance, Insurance, Real Estate & Leasing 30% 15% 15% 15% 15% 0%Other 35% 9% 26% 20% 10% 10%

Q4 2010 Q4 2011

Comments

• “We have been downsizing since 2007.” – Accommodation & Food Services/Arts & Entertainment

• “We downsized a lot in the past few years [and] in the last twelve months.” – Mining & Oil & Gas

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

Past Business Activity: Balance of Opinion Has your company expanded or downsized

in the last 12 months?

0% 0%0%

1%

2%

3%

4%

5%

Q4 2010 Q4 2011

Q4 2011: Expanded: 13% Downsized: 13% Q4 2010: Expanded: 14% Downsized: 14%

Overall Results



83

The balance of opinion on future business activity remained positive for companies surveyed in Q4 2011.

Twenty-three per cent of the companies surveyed in Q4 2011 anticipate a business expansion in the 12 months following their survey and three per cent anticipate a downsize, for a positive balance of opinion of 20 per cent. These results are similar to the Q4 2010 results, when 19 cent of the companies on balance anticipated a business expansion in the year following their survey.

For the companies surveyed in Q4 2011, more companies anticipate a business expansion than a downsize in the upcoming year in all of the industry categories, with the exception of the accommodation and food services/arts and entertainment industry. The professional, scientific and technical services industry and ʻotherʼ industry are particularly positive about future business activity, with 40 per cent or more of the companies on balance anticipating a business expansion.

Five per cent of the accommodation and food services/arts and entertainment companies on balance anticipate a business downsize in the next 12 months. 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 23% 4% 19% 23% 3% 20%

Results by IndustryMining & Oil & Gas 20% 15% 5% 20% 5% 15%Construction 30% 0% 30% 24% 0% 24%Manufacturing 14% 5% 10% 30% 5% 25%Wholesale & Retail Trade 30% 0% 30% 10% 0% 10%Transportation & Warehousing 19% 0% 19% 20% 0% 20%Professional, Scientific & Technical Services 19% 5% 14% 40% 0% 40%Health Care & Social Assistance 20% 5% 15% 14% 0% 14%Accommodation & Food Services/Arts & Entertainment 5% 0% 5% 5% 10% -5%Finance, Insurance, Real Estate & Leasing 25% 0% 25% 20% 5% 15%Other 48% 9% 39% 50% 5% 45%

Q4 2010 Q4 2011

Comments

• “Not because of the economy, but because of us trying to reduce the volume of work because we are planning to retire.” – Mining & Oil & Gas

• “We would expand if we had more labour.” – Manufacturing

Future Business Activity: Balance of Opinion Do you anticipate a business expansion or downsize

in the next 12 months?

19% 20%

0%

5%

10%

15%

20%

25%

30%

Q4 2010 Q4 2011

Q4 2011: Expansion: 23% Downsize: 3%Q4 2010: Expansion: 23% Downsize: 4%

Overall Results



84

Employment: Past Layoffs, Vacant Positions, and Future Employment

In Q4 2011, five per cent of the companies laid off employees in the previous three months, similar to the Q4 2010 results.

Five per cent of the companies surveyed in Q4 2011 reported they laid off workers in the three months prior to their survey.132 Approximately 14 people were reported as being laid off. In Q4 2010, six per cent said their company had laid off a total of 23 workers in the three months prior to their survey. Fourteen per cent of the health care and social assistance organizations surveyed in Q4 2011 laid off workers in the three months prior to their survey, up from five per cent in Q4 2010. None of the companies from the mining and oil and gas, manufacturing, and transportation and warehousing industries reported they laid off employees, an improvement from the previous year.

Comments

• “The slow down didn't impact me negatively. It helped me because I have storage lockers and businesses that are downsizing their offices use my storage space.” – Transportation & Warehousing

• “Our company is counter-intuitive - when the [recession hit] in 2008 that was when we tripled our work.” – Mining & Oil & Gas

• “No slow down for us.” – Mining & Oil & Gas

• “We are busy and it is the niche that we are in. We do a lot of sports stuff and they never go away.” – Manufacturing

In Q4 2011, 21 per cent of the companies had vacant positions that needed to be filled, up from 15 per cent the previous year.

Twenty-one per cent of the companies surveyed in Q4 2011 said they had vacant positions that needed to be filled at the time of their survey, compared to 15 per cent of the companies surveyed in Q4 2010. Forty per cent of the transportation and warehousing companies surveyed in Q4 2011 had vacant positions, up from 14 per cent the previous year. Only 10 per cent of the mining and oil and gas companies surveyed in Q4 2011 reported they had vacant positions that needed to be filled, however, this was still up slightly from five per cent the previous year.

132 As a result of the slowdown in the economy.

Past LayoffsPercentage of companies that laid off employees in the three months prior to their survey

Q4 2010 Q4 2011

Overall Results 6% 5%

Results by IndustryMining & Oil & Gas 20% 0%Construction 5% 5%Manufacturing 5% 0%Wholesale & Retail Trade 5% 5%Transportation & Warehousing 5% 0%Professional, Scientific & Technical Services 0% 5%Health Care & Social Assistance 5% 14%Accommodation & Food Services/Arts & Entertainment 5% 10%Finance, Insurance, Real Estate & Leasing 0% 5%Other 9% 10%

Vacant PositionsPercentage of companies that had vacant positions that needed to be filled

Q4 2010 Q4 2011





85

In Q4 2011, the companies reporting vacancies reported 90 positions needed to be filled, up from the 55 vacancies reported by micro-sized companies the previous year. Overall, this equates to a vacancy rate of 9.9 per cent for Q4 2011. Vacancy rates for Q4 2011 ranged from a low of five per cent in the construction and health care and social assistance industries to a high of 17.5 per cent in the transportation and warehousing industry.

Q4 2011 Vacancy Rates

IndustryTotal Vacant

Positions

Total

Employees

Vacancy

Rate

Mining & Oil & Gas 12 89 13.5%

Construction 5 95 5.3%

Manufacturing 8 83 9.6%

Wholesale & Retail Trade 6 93 6.5%

Transportation & Warehousing 18 103 17.5%

Professional, Scientific & Technical Services 7 86 8.1%

Health Care & Social Assistance 5 98 5.1%

Accommodation & Food Services/Arts & Entertainment 9 93 9.7%

Finance, Insurance, Real Estate & Leasing 7 81 8.6%

Other 13 88 14.8%

Total 90 909 9.9%

Mining & Oil & Gas – Vacant Positions

NOC Code OccupationVacant

Positions

8412 Oil and Gas Well Drilling Workers and Services Operators 8

0711 Construction Managers 2

0211 Engineering Managers 2

Total 12

Construction – Vacant Positions


Positions

7611 Construction Trades Helpers and Labourers 3

7241 Electricians (Except Industrial and Power System) 1

7421 Heavy Equipment Operators (Except Crane) 1

Total 5

Manufacturing – Vacant Positions


Positions

6421 Retail Salespersons and Sales Clerks 2

7313 Refrigeration Mechanics 2

1411 General Office Clerks 1

7265 Welders and Related Machine Operators 1

9422 Plastics Processing Maching Operators 1

9619 Other Labourers in Processing, Manufacturing and Utilities 1

Total 8



86

Wholesale & Retail Trade – Vacant Positions


Positions

7321 Automotive Service Technicians, Truck & Bus Mechanics & Mechanical Repairers 3


7441 Residential and Commercial Installers and Servicers 1

Total 6

Professional, Scientific & Technical Services – Vacant Positions


Positions

1111 Financial Auditors and Accountants 2

2271 Air Pilots, Flight Engineers and Flying Instructors 2

6221 Technical Sales Specialist 1

2255 Mapping and Related Technologists and Technicians 1

2151 Architects 1

Total 7

Transportation & Warehousing – Vacant Positions


Positions

7411 Truck Drivers 15

1453 Customer Service, Information and Related Clerks 1

6411 Sales Representatives - Wholesale Trade 1

9482 Motor Vehicle Assemblers, Inspectors and Testers 1

Total 18

Health Care & Social Assistance – Vacant Positions


Positions

4214 Early Chilhood Educators and Assistants 2

4212 Community and Social Service Workers 1

6471 Visiting Homemakers, Housekeepers and Related Occupations 1

7441 Residential and Commercial Installers and Services 1

Total 5

Accommodation & Food Services/Arts & Entertainment & Recreation - Vacant Positions


Positions

0511 Library, Archive, Museum and Art Gallery Managers 1


6663 Janitors, Caretakers and Building Superintendents 1

5136 Painters and Other Visual Artists 2

6661 Light Duty Cleaners 1

1441 Administrative Clerks 1

1226 Event Planner 1

Total 9



87

Finance, Insurance, Real Estate & Leasing – Vacant Positions


Positions

6232 Real Estate Agents and Salespersons 5

6421 Retail Sales Persons and Sales Clerks 1

1122 Marketing Assistant 1

Total 7

Other – Vacant Positions


Positions

2174 Computer Programmers and Interactive Media Developers 5

6411 Sales Representatives - Advertising 3

6221 Technical Sales Specialists 2

2171 Information Systems Analysts and Consultants 2


Total 13

In Q4 2011, nine per cent of the companies on balance anticipate employment will increase over the next three months, roughly unchanged from the Q4 2010 results.

Twelve per cent of the companies surveyed in Q4 2011 anticipate total employment will increase in the three months following their survey and three per cent anticipate employment will decrease, for a positive balance of opinion of 9 per cent. These results are similar to Q3 2010, when 10 per cent of the companies on balance anticipated employment would increase.

In Q4 2011, the professional, scientific and technical services industry was particularly positive about future employment levels, with 25 per cent of the companies anticipating an increase in employment in the three months following their survey. This was an improvement over Q4 2010, when the balance of opinion on future employment was 10 per cent. The balance of opinion on future employment was neutral for companies in the construction industry, a decline from the previous year when 30 per cent of the companies on balance anticipated an increase in employment. The balance of opinion was also neutral in Q4 2011 for companies in the health care and social assistance and accommodation and food services/arts and entertainment industries.

Future Employment: Balance of Opinion Do you anticipate employment will increase, decrease, or

stay the same in the next 3 months?

10%9%

0%

5%

10%

15%

Q4 2010 Q4 2011

Q4 2011: Increase: 12% Decrease: 3% Same/Unsure: 85%Q4 2010: Increase: 13% Decrease: 3% Same/Unsure: 84%

Overall Results



88

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 13% 3% 10% 12% 3% 9%

Results by IndustryMining & Oil & Gas 5% 0% 5% 10% 0% 10%Construction 30% 0% 30% 0% 0% 0%Manufacturing 5% 5% 0% 10% 5% 5%Wholesale & Retail Trade 20% 5% 15% 14% 0% 14%Transportation & Warehousing 14% 10% 5% 10% 5% 5%Professional, Scientific & Technical Services 10% 0% 10% 25% 0% 25%Health Care & Social Assistance 5% 0% 5% 0% 0% 0%Accommodation & Food Services/Arts & Entertainment 5% 5% 0% 14% 14% 0%Finance, Insurance, Real Estate & Leasing 10% 0% 10% 20% 0% 20%Other 26% 9% 17% 20% 5% 15%

Q4 2010 Q4 2011

Comments

• “Typically January and February are slow.” – Accommodation & Food Services/Arts & Entertainment

• “Our growth right now is proportionate to the amount of truck drivers we can get. Right now thatʼs what limits us - employees.” – Transportation & Warehousing

• “We are laying people off in the next few weeks.” – Transportation & Warehousing

• “Stay the same – it is hard to find people to do the job.” – Wholesale & Retail Trade

• “Stay the same – there are no people interested in these jobs.” – Manufacturing

• “Decrease – We have contracts ending because of lack of funding.” – Other

Temporary Foreign Workers

The percentage of companies employing temporary foreign workers in Q4 2011 was unchanged from the previous year at four per cent.

Four per cent of the companies surveyed in Q4 2011 reported they employ approximately 12 temporary foreign workers. These results were similar to the Q4 2010 results, when four per cent of the companies reported they employed 14 temporary foreign workers. Fourteen per cent of the wholesale and retail trade companies surveyed in Q4 2011 employ temporary foreign workers, compared to none of the mining and oil and gas, transportation and warehousing, professional, scientific and technical services, and finance, insurance, real estate and leasing companies

Temporary Foreign WorkersPercentage of companies that employed temporary foreign workers at the time of their survey

Q4 2010 Q4 2011





89

Four per cent of the companies surveyed in Q4 2011 anticipate hiring temporary foreign workers in the year following their survey.

Four per cent of the companies surveyed in Q4 2011 anticipate applying for or hiring approximately 19 temporary foreign workers in the 12 months following their survey. In Q4 2010, three per cent of the companies anticipated applying for or hiring 10 temporary foreign workers. Ten per cent of the wholesale and retail trade and accommodation and food services/arts and entertainment companies surveyed in Q4 2011 anticipate hiring temporary foreign workers in the year following their survey, compared to none of the transportation and warehousing, professional, scientific and technical services and ʻotherʼ companies.

Comments

• “No – it takes too long to train.” – Transportation & Warehousing

• “I will consider it if I can't find someone locally.” – Transportation &Warehousing

• “It doesnʼt fit our business plans.” – Mining & Oil & Gas

• “I have someone in Europe that I want to bring.” – Manufacturing

• “We had looked into it out of interest and it was very difficult.” – Manufacturing

• “We might look at this as an option. We have considered it in the past – bringing in foreign workers that were qualified technical people. But, it is not an easy thing to do and there is a lot of red tape.” – Wholesale & Retail Trade

• “No. The reason is our particular profession or discipline requires extremely qualified personnel. They have to be in the credit industry for many years, especially oil and gas.” – Finance, Insurance & Real Estate & Leasing

• “We talked about it, and we are too small. We have investigated it thoroughly. We donʼt have enough work for a full-time person and accommodations are an issue.” – Other

Future Temporary Foreign WorkersPercentage of companies that anticipate applying for or hiring temporary foreign workersin the 12 months following their survey

Q4 2010 Q4 2011





90

Recruitment Methods

Word of mouth was the most commonly used recruitment method in Q4 2011.

Overall, the most commonly used recruitment method for companies surveyed in Q4 2011 was word of mouth/employee referrals, followed by walk-ins/unsolicited resumes, the Internet, newspapers, and company website/internal postings.

Just over two-thirds of the companies surveyed said they used resources on the Internet to recruit employees, with the most common being online career websites (Monster, Job Bank, Calgary Job Shop, Workopolis, and Working) and online classifieds (Kijiji and Craigslist). Three per cent of the companies surveyed said they use social media such as Face Book, Twitter, and LinkedIn as a resource.

In Q4 2010, the top recruitment methods were word of mouth (71%), walk-ins/unsolicited resumes (45%), the Internet (31%), company website/internal postings (29%) and newspapers (27%).

Comments

• “Being in a small community (Airdrie) there is a never-ending amounts of kids that want to work through referrals. We are a tight knit community, we all know each other and we all look out for each other.” – Transportation & Warehousing

• “We usually are not looking to hire, the employees that I have with me now have been with me for a while. So just walk-ins or people submit their resume online to our email.” – Wholesale & Retail Trade

• “We do provide funding to schools, but we don't actively recruit through schools.” – Mining & Oil & Gas

• “I'm currently looking to close down the business because I am 65 and looking to retire. Previously, when I did recruit, I would just get people through word of mouth and then train them.” – Healthcare & Social Assistance

• “I generally use word of mouth, as we need a unique type of person.” – Manufacturing

1%

2%

2%

3%

8%

12%

13%

14%

33%

34%

44%

75%

17%

22%

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

High Schools

Job Fairs

Other

Social Media

Technical/Trade Institutes

College/Universities

Signage

Employment Agencies

Industry Associations

Company Website/Internal Postings

Newspapers

Internet (career and classified websites)

Walk-ins/unsolicited resumes

Word of mouth/employees referrals



91

Recruiting Difficulties

One-quarter of the companies surveyed In Q4 2011 reported having difficulty recruiting qualified employees.

Companies were asked questions regarding past and future recruiting difficulties. Specifically, they were asked if they had difficulty recruiting qualified employees in the 12 months prior to their survey, and if they anticipated having more, less or the same amount of difficulty recruiting qualified employees in the following 12 months.

Overall, 26 per cent of the companies surveyed in Q4 2011 reported having difficulty recruiting qualified employees in the 12 months prior to their survey, an increase from Q4 2010 when 17 per cent reported having difficulty. Forty-five per cent of the manufacturing companies, 35 per cent of the transportation and warehousing companies and 30 per cent of the professional, scientific and technical services companies surveyed in Q4 2011 had difficulty recruiting, up significantly from the Q4 2010 results.

Comments

• “Most people lack initiative.” – Accommodation & Food Services/Arts & Entertainment

• “The candidates are qualified on paper but not in real life. They are lacking real life experiences.” – Accommodation & Food Services/Arts & Entertainment

• “Finding qualified and suitable cooks is difficult.” – Accommodation & Food Services/Arts & Entertainment

• “I think we need to be more specific in the ads - people that apply don't have enough experience. They are under qualified.” – Accommodation & Food Services/Arts & Entertainment

• “It is always a struggle - a lot of them don't work out.” – Accommodation & Food Services/Arts & Entertainment

• “Our industry is a harsh industry and nobody wants to work the long hours outside in the cold. It was an industry that a lot of people wanted in the olden days but not now.” – Transportation & Warehousing

• “I think there are several reasons for the difficulty; the biggest one being there is a shortage of qualified people in our industry. There are lots of qualified people from the US; even now from Eastern Canada there is a shortage to come out here and work. How I see it, if Alberta wants to continue to grow in the Oil and Gas, then they are going to need to loosen up the border so we can bring people in from the States that are looking for jobs that are qualified to fill our positions. In our industry, if you can't get someone from our prairie provinces, you can train but there is just not enough around. We have been growing but boy has it been a struggle to get people. The other thing is we are not in a major centre; we are in a rural center. Our business is out in the country. Anyone we hire has to drive a while to get here. I am not interested in relocating because of costs. I still do not know if we will get enough people.” – Transportation & Warehousing

• “Finding the right fit is difficult. We [recently] hired one person and he worked for two weeks and quit.” – Transportation & Warehousing

Difficulty RecruitingPercentage of companies that had difficulty recruiting in the 12 months prior to their survey

Q4 2010 Q4 2011





92

• “The most difficulty is due to the specific specialized experience that they need, which is cattle handling, and really there is limited people in this industry. Not haul cattle but work with them. It takes too long to train someone.” – Transportation & Warehousing

• “People don't want to work. They only want to work specific hours but thatʼs not a part of the job. We create too many expectations in children that are finishing schools that they can be presidents.” – Transportation & Warehousing

• “It is difficult to find qualified people in this industry.” – Wholesale & Retail Trade

• “We only can pay a certain amount so we can't pay the wage that people want.” – Wholesale & Retail Trade

• “The type of the work is pretty specific and it is not easy to find the right people for the job.” – Wholesale & Retail Trade

• “Just a lack of workers due to competition with the oil sands.” – Wholesale & Retail Trade

• “Lack of experienced archaeologists.” – Professional, Scientific & Technical Services

• “Very qualified paralegals are in high demand and scarce.” – Professional, Scientific & Technical Services

• “The qualified people are already working.” – Professional, Scientific & Technical Services

• “It is a huge problem in our field, because we are small to medium and we lose people to larger companies, like oil companies.” – Professional, Scientific & Technical Services

• “Well, itʼs a tough finding qualified people because of the law office you need staff with a legal background. What we find is that we have to hire people without it and train them ourselves. We had to lay one of them off, after I trained him or her for five years.” – Professional, Scientific & Technical Services

• “Significant difficulty, geographically where we are located.” – Mining & Oil & Gas

• “The applicants I get donʼt have qualified references locally.” – Mining & Oil & Gas

• “I usually teach them as I go. I do require class 3 drivers and those are difficult to find.” – Construction

• “Due to the specialization of our work, it is hard to find people with the skills.” – Construction

• “We are based in Canmore and the cost of living is a barrier for many.” – Construction

• “We get a lot of people that think they know what they are doing, but they don't. They come out and then are gone within an hour.” – Construction

• “We're a very small town, so the money is not good enough for anyone to travel.” – Healthcare & Social Assistance

• “Basically qualifications and education. Also, the time of year. We hire registered social workers for a specific vacant position and that position is harder to fill because of the qualifications. We started in August but people generally go back to school during that time.” – Healthcare & Social Assistance

• “I have had difficulty for the last seven years.” – Manufacturing

• “Due to the nature of the work, we have difficulty recruiting.” – Manufacturing

• “Up until March I did have difficulties for many years. The people coming through are too transient and this job require you to be around to learn it.” – Manufacturing



93

• “Well the qualified guys are still working and it is hard to find one that is not working.” – Manufacturing

• “Seems like no one wants to work full-time - they just want casual works that pays more.” – Manufacturing

• “There is a lack of skilled employees and people out there, especially in the trades.”– Manufacturing

• “It is difficult finding applicants that we feel are qualified enough to work with us.” – Finance, Insurance, Real Estate & Leasing

• “Well, it depends. In the most recent example, we hired someone from a placement agency and their attitude didn't match. Finding the right match for the organization is difficult.” – Finance, Insurance, Real Estate & Leasing

• “Itʼs hard to get someone with the wages we are offering.” – Finance, Insurance, Real Estate & Leasing

• “We have difficulty because we are contract and commission based. We cannot afford salaries.” – Other

• “Just the lack of appropriate or skilled/qualified labourers and wage expectations are too high.” – Other

• “I've noticed that the postings havenʼt resulted in the best results. There are a lot of people that are not qualified, or they are not local.” – Other

On balance, two per cent of the companies surveyed in Q4 2011 anticipate having more difficulty recruiting qualified employees over the next 12 months.

Seven per cent of the companies surveyed in Q4 2011 anticipate having more difficulty recruiting qualified employees in the 12 months following their survey and 5 per cent anticipate having less difficulty, for a balance of opinion of 2 per cent.133 In Q4 2010, the balance of opinion was -2 per cent, indicating companies anticipated having less difficulty recruiting employees.

In Q4 2011, 15 per cent of the ʻotherʼ companies on balance anticipate having more difficulty recruiting qualified employees in the next year, a significant change from Q4 2010 when 13 per cent of the companies on balance anticipated having less difficulty recruiting. Fourteen per cent of the health care and social assistance organizations surveyed in Q4 2011 anticipate having less difficulty recruiting in the next 12 months. Five per cent of the wholesale and retail trade and finance, insurance and real estate companies on balance also anticipate having less difficulty recruiting qualified employees over the next year.

133 Percentage of companies that anticipated having more difficulty recruiting qualified employees in the 12 months

following their survey minus the percentage of companies that anticipated having less difficulty.

Future Recruiting Difficulties: Balance of Opinion Do you anticipate having more, less or the same amount

of difficulty recruiting qualified employees in the next 12 months?

-2%

2%

-4%

-2%

0%

2%

4%

Q4 2010 Q4 2011

Q4 2011: More: 7% Less: 5% Same/Unsure: 88%Q4 2010: More: 6% Less: 8% Same/Unsure: 86%

Overall Results



94

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 6% 8% -2% 7% 5% 2%

Results by IndustryMining & Oil & Gas 5% 10% -5% 10% 5% 5%Construction 5% 10% -5% 5% 0% 5%Manufacturing 14% 14% 0% 5% 0% 5%Wholesale & Retail Trade 5% 5% 0% 5% 10% -5%Transportation & Warehousing 5% 0% 5% 10% 10% 0%Professional, Scientific & Technical Services 10% 10% 0% 10% 0% 10%Health Care & Social Assistance 5% 5% 0% 0% 14% -14%Accommodation & Food Services/Arts & Entertainment 0% 5% -5% 10% 5% 5%Finance, Insurance, Real Estate & Leasing 10% 5% 5% 0% 5% -5%Other 0% 13% -13% 15% 0% 15%

Q4 2010 Q4 2011

Comments

• “We are seasonal and most of the people come back.” – Accommodation & Food Services/Arts & Entertainment

• “More - I think Alberta is getting busier and they are starting to clamp down on foreign workers - which we have three of.” – Accommodation & Food Services/Arts & Entertainment

• “We spent a lot of time finding the right and qualified people to work for us. I know that these people that we recruited are stable and will stay with us.” – Transportation & Warehousing

• “More - because we are losing a lot of employees that are going to work in the oil patch”. – Transportation & Warehousing

• “Less - There are just more employable people around. There is no longer a labour shortage like 3-4 years ago.” – Transportation & Warehousing

• “Less - the one thing that happens in a downturn is we get a lot of applications and some are really good.” – Transportation & Warehousing

• “I would say more, because of the economy we're in right now. Coupled with people retiring in the work force.” – Wholesale & Retain Trade

• “More. We are going to look for a intermediate or senior engineer in the not too distant future, and this position is generally hard to recruit for.” – Professional, Scientific & Technical Services

• “I expect it will get tougher finding what we want. The employer is not going to have the breadth of selection.” – Mining & Oil & Gas

• “Less. There are lots of new grads and lots of people looking for jobs - more than there are positions.” – Healthcare & Social Assistance

• “I anticipate more - every time you hear about the boom in the oil field it pulls people away.” – Manufacturing

• “We have had difficulty in the last fifteen years.” – Manufacturing

• “I think there will be better candidates.” – Finance, Insurance, Real Estate & Leasing

• “I have a sense it will get more difficult.” – Other



95

Employee Turnover and Turnover Rates

Over one-third of the companies surveyed in Q4 2011 reported employees had voluntarily left their companies in the prior year.

Thirty-five per cent of the companies surveyed in Q4 2011 reported employees had left their company in the 12 months prior to their survey as a result of voluntary turnover134, compared to 28 per cent of the companies in Q4 2010.

In Q4 2011, 65 per cent of the transportation and warehousing companies surveyed said employees had voluntarily left in the year prior to their survey, a significant leap from the Q4 2010 results when 24 per cent of the companies reported employee turnover. Only one-quarter of the mining and oil and gas, construction, manufacturing and professional, scientific and technical services companies surveyed in Q4 2011 said employees had left their companies in the prior year due to voluntary turnover.

Overall, the turnover rate was 16 per cent for companies surveyed in Q4 2011, unchanged from the previous year.

The companies surveyed in Q4 2011 reported approximately 147 employees left their companies in the 12 months prior to their survey as a result of voluntary turnover. This equated to a turnover rate of 16 per cent. In Q4 2010, companies reported a total of 136 employees left their companies in the 12 months prior to their survey, also resulting in a turnover rate of 16 per cent. In Q4 2011, the transportation and warehousing industry had the highest turnover rate on average at 42 per cent, up significantly from 15 per cent the previous year. The construction industry had the lowest voluntary turnover rate at 8 per cent in Q4 2011, down substantially from 40 per cent in Q4 2010.

134 Initiated by the employee.

Employee TurnoverPercentage of companies with voluntary employee turnover in the 12 months prior to their survey

Q4 2010 Q4 2011



Employee TurnoverTurnover rates of companies (total turnover divided by total employees)in the 12 months prior to their survey

Q4 2010 Q4 2011





96

On balance, four per cent the companies surveyed in Q4 2011 anticipate employee turnover will be lower over the next 12 months.

Two per cent of the companies surveyed in Q4 2011 anticipate voluntary turnover will be higher in the 12 months following their survey and 6 per cent anticipate it will be lower, for a balance of opinion of -4 per cent.135 In Q4 2010, 6 per cent of the companies on balance anticipated turnover would be lower in the year following their survey.

In Q4 2011, five per cent of the mining and oil and gas and finance, insurance, real estate and leasing companies on balance anticipate employee turnover will be higher in the 12 months following their survey. Companies in the remaining industries either anticipate turnover will be about the same or lower over the next year.

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 1% 7% -6% 2% 6% -4%

Results by IndustryMining & Oil & Gas 0% 5% -5% 5% 0% 5%Construction 0% 10% -10% 0% 0% 0%Manufacturing 5% 5% 0% 0% 0% 0%Wholesale & Retail Trade 0% 10% -10% 5% 14% -9%Transportation & Warehousing 5% 10% -5% 0% 10% -10%Professional, Scientific & Technical Services 0% 5% -5% 0% 10% -10%Health Care & Social Assistance 0% 15% -15% 0% 14% -14%Accommodation & Food Services/Arts & Entertainment 0% 0% 0% 5% 5% 0%Finance, Insurance, Real Estate & Leasing 5% 10% -5% 5% 0% 5%Other 0% 4% -4% 5% 5% 0%

Q4 2010 Q4 2011

Comments

• “Higher because of the competition in the market.” – Accommodation & Food Service/Arts & Entertainment

• “Lower – there are just more workers out there that are staying at their jobs.” – Transportation & Warehousing

• “I donʼt expect anyone to leave.” – Healthcare & Social Assistance

• “I think that everyone that is working here is happy and will stay.” – Healthcare & Social Assistance

135 Percentage of companies that anticipated voluntary turnover would be higher in the 12 months following their survey

minus the percentage of companies that anticipated voluntary turnover would be lower.

Future Turnover: Balance of Opinion Do you anticipate employee turnover will be higher, lower

or the same in the next 12 months?

-6%

-4%

-8%

-6%

-4%

-2%

0%

Q4 2010 Q4 2011Q4 2011: Higher: 2% Lower: 6% Same/Unsure: 92%Q4 2010: Higher: 1% Lower: 7% Same/Unsure: 92%

Overall Results



97

Retention

A positive work environment and competitive salary were the most commonly used retention strategies in Q4 2011.

Companies were asked questions regarding current and future employee retention activities. Specifically, they were asked what strategies were their companies using to retain employees, and did they anticipate their company would be focusing more, less or the same on employee retention in the 12 months following their survey.

Overall, the most commonly used retention strategy for companies surveyed in Q4 2011 was a positive work environment, followed by competitive salary, interesting/ challenging work, excellent management/supervision, and learning/growth opportunities. Results were slightly different for companies surveyed in Q4 2010, with a positive work environment mentioned by 81 per cent of the companies, followed by interesting/challenging work (75%), competitive salary (72%), excellent communication (71%) and flexible work measures (69%).

Comments

• “We offer training and therapy for free and they get discounts to the programs we offer.” – Accommodation & Food Services/Arts & Entertainment

• “For the long-term employees, we do things for them on an ongoing basis. They put in a hard month or a good month and we recognize that.” – Transportation & Warehousing

• “I donʼt micromanage, the more they do the more they make.” – Transportation and Warehousing

• “We offer heavy discounts on mechanical services and products and we also have a interest free account and receivables.” – Wholesale & Retail Trade

• “I hire people that I know within the industry and we work as partners together. They are here because they are a part of the business and they want to be here.” – Mining & Oil & Gas

• “In construction, it is whether they like it or not. There are no retention strategies used.” – Construction

• “We're a small company so we donʼt have overtime, we have set hours and we're casual.” – Construction

• “Free dental, incentive bonuses (cash), weekly lunches, yearly trip for the whole office together, gift cards and tickets.” – Health Care & Social Assistance

26%

31%

36%

41%

48%

52%

55%

63%

63%

64%

67%

68%

76%

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

Reward and recognition programs

Perks

Competitive benefits package

Cash Bonuses

Social Events

Work/life balance

Excellent communication

Flexible work measures

Learning/growth Opportunities

Excellent management/supervision

Interesting/challenging work

Competitive salary

Postive work environment



98

Nine per cent of the companies surveyed in Q4 2011 anticipate they will be focusing more on employee retention over the next year.

Overall, 9 per cent of the companies surveyed in Q4 2011 anticipate they will be focusing more on employee retention in the 12 months following their survey. Results were slightly higher at 14 per cent for companies surveyed in Q4 2010.

In Q4 2011, 25 per cent of the transportation and warehousing companies anticipate they will be focusing more on employee retention in the next year, up significantly from 10 per cent in Q4 2010. Five per cent of the health care and social assistance organizations said they plan to focus less on retention in the next year, down from Q4 2010 when 30 per cent of the organizations reported they would be focusing more 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 14% 0% 14% 9% 0% 9%

Results by IndustryMining & Oil & Gas 20% 0% 20% 5% 0% 5%Construction 10% 0% 10% 5% 0% 5%Manufacturing 14% 5% 10% 10% 0% 10%Wholesale & Retail Trade 15% 0% 15% 10% 0% 10%Transportation & Warehousing 10% 0% 10% 25% 0% 25%Professional, Scientific & Technical Services 0% 0% 0% 15% 0% 15%Health Care & Social Assistance 30% 0% 30% 0% 5% -5%Accommodation & Food Services/Arts & Entertainment 5% 0% 5% 5% 0% 5%Finance, Insurance, Real Estate & Leasing 20% 0% 20% 10% 0% 10%Other 17% 0% 17% 10% 0% 10%

Q4 2010 Q4 2011

Comments

• “In general, I will maybe look at enhancing recognition and perks.” – Accommodation & Food Services/Arts & Entertainment

• “We have been talking about retention a lot, because the quality of applicants isn't great. So, we have just been talking about how we can keep the ones we have.” – Transportation and Warehousing

• “We are attempting to hire better employees. We are trying to hire older and more experienced employees. We are offering them very competitive pays to start.” – Transportation & Warehousing

• “Well I know one thing we did already was we decreased the fees we charge [drivers] so they can make better money. We have looked into benefit programs, but not enough were interested so we are not sure. We are competing with oil patch for drivers as well.” – Transportation & Warehousing

• “I would say the employee rewards and recognition will be the main focus.” – Wholesale & Retail Trade

• “We will be focusing on getting people trained and making sure they are happy.” – Wholesale & Retail Trade

Future Retention: Balance of Opinion Do you anticipate your company will be focusing more,

less, or the same on employee retention in the next 12 months?

14%

9%

0%

5%

10%

15%

20%

Q4 2010 Q4 2011

Q4 2011: More: 9% Less: 0% Same/Unsure: 91%Q4 2010: More: 14% Less: 0% Same/Unsure: 86%

Overall Results



99

• “We will be focusing more on communication, reward and recognition, stronger leadership and look at possibly adding a financial bonus.” – Professional, Scientific & Technical Services

• “We are looking into improving the benefits package, dividend payments and profit sharing.” – Mining & Oil & Gas

• “Given indications of how our market is, it will be an area of more concern. Wage-wise, I will look into that.” – Construction

• “We will be looking into improving all areas.” – Finance, Insurance, Real Estate & Leasing

• “We will see if there are areas that maybe we are not in a position to offer large benefits, but small.” - Other

Supplemental Question

Recruitment and availability of qualified labour was the top human resource challenge micro-sized companies are currently facing.

Companies were asked to report the top human resource issue or challenge their company is currently facing. Recruitment and availability of qualified labour was the top response, followed by employee retention, organizational effectiveness, employee attitudes/work ethic, employee skill development/ training, and employee satisfaction/ morale.

Comments

• “It is tough filling a position that is part-time. I need to hire more people then I need because people can't commit themselves to the regular shift.” – Accommodation & Food Services/Arts & Entertainment)

• “There are less and less people interested in the arts because there is not a lot of money in it.” – Accommodation & Food Services/Arts & Entertainment

• “Finding someone that is willing to commit to the job would be a relief.” – Accommodation & Food Services/Arts & Entertainment

• “Finding students that are interested in the museum and tourism area.” – Accommodation & Food Services/Arts & Entertainment

• “I am finding a lot of workers are transient.” – Accommodation & Food Services/Arts & Entertainment

• “I would say consistent leadership from head office, which is out of Toronto.” – Transportation & Warehousing

• “I have a real problem with some of these kids coming out of high school. I have no idea what they are teaching these kids about responsibility and typing and using the computer. It is something that we have to deal with. We can teach the skills but it is the work ethic that you can't teach.” – Transportation & Warehousing

1%

1%

1%

1%

1%

2%

2%

2%

3%

3%

4%

4%

5%

31%

0% 5% 10% 15% 20% 25% 30% 35%

Workplace Diversity

HR Processes

Aging Workforce

Improving Communication

Government Regulations

Compensation

Benefits Cost

Employee Work/Life Balance

Employee Satisfaction/Morale

Employee Skill Development/Training

Employee Attitudes/Work Ethic

Organizational Effectiveness

Employee Retention

Recruitment and Availability of Qualified Labour



100

• “Since this is a family run business, balancing work and the hours is our top issue.” – Transportation & Warehousing

• “Attracting qualified leadership.” – Wholesale & Retail Trade

• “Finding employees when you need them and also, when we do call employees after receiving resumes to come in for an interview, it is a little frustrating when they don't show up. There is no courtesy call or anything to let us know that they won't be there.” – Wholesale & Retail Trade

• “Retaining employees - because there is a lot of training.” – Wholesale & Retail Trade

• “The biggest problem we have when it comes to employees is it is too easy for them to go somewhere else. It is not even salary. Each person has his or her own reason, and it is impossible to satisfy everyone in every level.” – Professional, Scientific & Technical Services

• “We are revisiting our hiring practices. We have been relying so heavily on word of mouth.” – Professional, Scientific & Technical Services

• “Itʼs a reality that probably the biggest challenge is one particular position, the pilot position. We are a stepping-stone in the career paths for many of the pilots. We plan and anticipate and expect we will get 2-3 years out of a pilot before they move on. They do not look for a career [with us]." – Professional, Scientific & Technical Services

• “In my business, probably finding qualified people is the biggest challenge.” – Professional, Scientific & Technical Services

• “The problem is that we train people and the larger companies continuously poach from us. We train guys for a few years from the ground up, and they learn everything. They get very well trained and after that they are gone. They don't see the overall growth scenario. They see the bigger company as better. But with my 25 years of experience, 75% of the people that had left would like to come back because they find out the other side is not rosier.” – Professional, Scientific & Technical Services

• “We are a very small company, so we have no challenges.” – Mining & Oil & Gas

• “The biggest challenge is finding experienced engineers and geologists.” – Mining & Oil & Gas

• “The challenge is finding people that can deal with the weather because we are outside all of the time.” – Construction

• “Finding quality workers at a lower wage. It is hard to find young people that do a good job and want to work. We find you have to find more mature workers to get the job done. I have two of the younger ones myself that work for us. I just find that they all want the big bucks but don't do anything.” – Construction

• “If the friends and family that we have can't do it, finding the people responsible enough to fill in is the big challenge.” – Construction

• “Taxes and parking is killing me at the moment.” – Health Care & Social Assistance

• “We employ two articling students each year for four months each. Because the law school has instituted differential tuition, it is harder to attract articling students because they want a job that pays more. This is a challenge because we want the best students coming here, but they can earn more and they go elsewhere because they get paid more to pay off their student loans.” – Health Care & Social Assistance

• “Forecasting the need for human resources and business effectiveness are the challenges. Trying to grow the business so we have more to offer employees. Right now they are really on a casual as-needed basis.” – Health Care & Social Assistance



101

• “I have been trying to find someone for the two years. It is a challenge for a small company like me. Unless the person is super smart, I have to train them. I am not interested in starting from ground zero.” – Manufacturing

• “Biggest thing is we are small and I want to stay small. It is a challenge to keep people full-time to pay them. We do have swings in our business. For example, hockey season is great, and Christmas time it is slow. A person that needs stability will not be able to find that with my company.” – Manufacturing

• “We have difficulty finding people with the right technical expertise.” – Finance, Insurance, Real Estate & Leasing

• “Generation Y.” – Finance, Insurance, Real Estate & Leasing

• “We're spread fairly thin. We would like to staff up but we are restricted with cash flow.” – Finance, Insurance, Real Estate & Leasing

• “Finding someone willing to work part-time, or seasonal part-time.” – Other

• “Training - there is a big learning curve in our industry.” – Other



102

JOB BANK ANALYSIS This section provides a summary of jobs posted to the Job Bank in the fourth quarter of 2011.

CALGARY (CITY) For Calgary (city), there were 13,067 job postings136 on the Job Bank in the fourth quarter of 2011, advertising for a total of 36,148 positions. This was up from 34,892 positions the previous quarter and 22,305 positions year-over-year. Sixty-five per cent of the job postings in the fourth quarter of 2011 were from companies located in South Calgary, while the remaining 35 per cent of the job postings were from companies located in North Calgary.

Figure 37: Job Bank: Job Ad Postings by Quadrant for Q4 2011

Calgary (city)

North West

9%

South West

23%North East

26%

South East

42%

136 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.



103

Thirty-five per cent (12,651 positions) were sales and service occupations, and 28 per cent (10,242 positions) were trades, transport and equipment operator occupations.

Figure 38: Job Bank: Number of Job Positions by Occupation for Q4 2011

Calgary (city)

397

795

837

1,397

1,543

2,013

2,757

3,516

10,242

12,651

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000

Health Occupations

Occupations in Social Science, Education,Government Service & Religion

Occupations in Art, Culture, Recreation & Sport

Management Occupations

Occupations Unique to Processing, Manufacturing &Utilities

Occupations Unique to Primary Industry

Natural & Applied Sciences & Related Occupations

Business, Finance & Administration Occupations

Trades, Transport & Equipment Operators & RelatedOccupations

Sales & Service Occupations

Number of Positions

The top five occupations advertised on the Job Bank in the fourth quarter of 2011 for Calgary (city) were food counter attendants, kitchen helpers and related occupations (2,814 positions), truck drivers (1,650 positions), cooks (1,404 positions), customer service, information and related clerks (1,385 positions) and light duty cleaners (1,366 positions). The top five occupations in the third quarter of 2011 were food counter attendants, kitchen helpers and related occupations (2,741 positions), retail salespersons and sales clerks (1,623 positions), truck drivers (1,416 positions), material handlers (1,325 positions), and cooks (1,281 positions).



104

Table 20: Calgary (city) Positions137

NOC Code Occupation Positions

6641 Food Counter Attendants, Kitchen Helpers and Related Occupations 2,814 7411 Truck Drivers 1,650 6242 Cooks 1,404 1453 Customer Service, Information and Related Clerks 1,385 6661 Light Duty Cleaners 1,366 6421 Retail Salespersons and Sales Clerks 1,331 7452 Material Handlers 1,329 7611 Construction Trades Helpers and Labourers 1,154 7242 Industrial Electricians 698 6212 Food Service Supervisors 675 5254 Program Leaders and Instructors in Recreation and Sport 667 2243 Industrial Instrument Technicians and Mechanics 621 9619 Other Labourers in Processing, Manufacturing and Utilities 586 6453 Food and Beverage Servers 572 6474 Babysitters, Nannies and Parents' Helpers 550 8612 Landscaping and Grounds Maintenance Labourers 518 6651 Security Guards and Related Occupations 477 6611 Cashiers 458 0711 Construction Managers 406 8615 Oil and Gas Drilling, Servicing and Related Labourers 403 8232 Oil and Gas Well Drillers, Servicers, Testers and Related Workers 391 7271 Carpenters 368 7414 Delivery and Courier Service Drivers 362 8412 Oil and Gas Well Drilling Workers and Services Operators 339 7265 Welders and Related Machine Operators 305 6662 Specialized Cleaners 304 7312 Heavy-Duty Equipment Mechanics 303 6622 Grocery Clerks and Store Shelf Stockers 285 4212 Community and Social Service Workers 274 0621 Retail Trade Managers 262 6221 Technical Sales Specialists - Wholesale Trade 262 6663 Janitors, Caretakers and Building Superintendents 246 1471 Shippers and Receivers 242 7321 Automotive Service Technicians, Truck Mechanics and Mechanical Repairers 240 7421 Heavy Equipment Operators (Except Crane) 229 7244 Electrical Power Line and Cable Workers 224 1411 General Office Clerks 220 6211 Retail Trade Supervisors 202 7282 Concrete Finishers 200 2253 Drafting Technologists and Technicians 194 1414 Receptionists and Switchboard Operators 180 6435 Hotel Front Desk Clerks 180 7322 Motor Vehicle Body Repairers 177 7231 Machinists and Machining and Tooling Inspectors 173 2133 Electrical and Electronics Engineers 168 7311 Construction Millwrights and Industrial Mechanics (Except Textile) 168 0631 Restaurant and Food Service Managers 165 4214 Early Childhood Educators and Assistants 160 6471 Visiting Homemakers, Housekeepers and Related Occupations 160 6411 Sales Representatives - Wholesale Trade (Non-Technical) 158 2234 Construction Estimators 154 7284 Plasterers, Drywall Installers and Finishers and Lathers 154 7443 Automotive Mechanical Installers and Servicers 154 7441 Residential and Commercial Installers and Servicers 153 7612 Other Trades Helpers and Labourers 152 1225 Purchasing Agents and Officers 147 2174 Computer Programmers and Interactive Media Developers 146 2242 Electronic Service Technicians (Household and Business Equipment) 143 6623 Other Elemental Sales Occupations 139 6241 Chefs 138 2171 Information Systems Analysts and Consultants 134 7252 Steamfitters, Pipefitters and Sprinkler System Installers 133 8222 Supervisors, Oil and Gas Drilling and Service 132 1221 Administrative Officers 130

6465 Other Protective Service Occupations 130

137 Only occupations with 130 or more positions are shown in the table.



105

COMMUNITIES SURROUNDING CALGARY For the communities surrounding Calgary, there were 2,635 job postings on the Job Bank in the fourth quarter of 2011, advertising for a total of 6,189 positions. This was down from 6,446 positions the previous quarter, but up from 4,264 positions year-over-year. Thirty-nine per cent (2,392 positions) were sales and service occupations and 30 per cent (1,880 positions) were trades, transport and equipment operator occupations.

Figure 39: Job Bank: Number of Job Positions by Occupation for Q4 2011

Communities Surrounding Calgary

35

43

57

181

302

335

464

500

1,880

2,392

0 500 1,000 1,500 2,000 2,500 3,000


Health Occupations









Number of Positions

The top five occupations advertised on the Job Bank in the fourth quarter of 2011 for the communities surrounding Calgary were food counter attendants, kitchen helpers and related occupations (606 positions), truck drivers (382 positions), cooks (339 positions), retail salespersons and sales clerks (322 positions) and babysitters, nannies and parentsʼ helpers (255 positions). The top five occupations in the previous quarter were food counter attendants, kitchen helpers and related occupations (650 positions), truck drivers (495 positions), retail salespersons and sales clerks (404 positions), construction trades helpers and labourers (287 positions) and cooks (259 positions).



106

Table 21: Communities Surrounding Calgary Positions138


6641 Food Counter Attendants, Kitchen Helpers and Related Occupations 6067411 Truck Drivers 3826242 Cooks 3396421 Retail Salespersons and Sales Clerks 3226474 Babysitters, Nannies and Parents' Helpers 2556212 Food Service Supervisors 2297611 Construction Trades Helpers and Labourers 1737421 Heavy Equipment Operators (Except Crane) 1619617 Labourers in Food, Beverage and Tobacco Processing 1399619 Other Labourers in Processing, Manufacturing and Utilities 1228432 Nursery and Greenhouse Workers 1176661 Light Duty Cleaners 1166611 Cashiers 1118431 General Farm Workers 1097265 Welders and Related Machine Operators 987612 Other Trades Helpers and Labourers 978612 Landscaping and Grounds Maintenance Labourers 860621 Retail Trade Managers 857291 Roofers and Shinglers 779462 Industrial Butchers and Meat Cutters, Poultry Preparers and Related Workers 727242 Industrial Electricians 706211 Retail Trade Supervisors 667322 Motor Vehicle Body Repairers 646453 Food and Beverage Servers 607312 Heavy-Duty Equipment Mechanics 570014 Senior Managers - Health, Education & Social and Community Services 567441 Residential and Commercial Installers and Servicers 567452 Material Handlers 531122 Professional Occupations in Business Services to Management 47

6411 Sales Representatives - Wholesale Trade (Non-Technical) 467292 Glaziers 467219 Contractors & Supervisors, Other Construction Trades, Installers, Repairers & Servicers 441453 Customer Service, Information and Related Clerks 428232 Oil and Gas Well Drillers, Servicers, Testers and Related Workers 427231 Machinists and Machining and Tooling Inspectors 407321 Automotive Service Technicians, Truck Mechanics and Mechanical Repairers 407443 Automotive Mechanical Installers and Servicers 407241 Electricians (Except Industrial and Power System) 398615 Oil and Gas Drilling, Servicing and Related Labourers 388253 Farm Supervisors and Specialized Livestock Workers 351475 Dispatchers and Radio Operators 336471 Visiting Homemakers, Housekeepers and Related Occupations 337271 Carpenters 327263 Structural Metal and Platework Fabricators and Fitters 307311 Construction Millwrights and Industrial Mechanics (Except Textile) 308611 Harvesting Labourers 300631 Restaurant and Food Service Managers 299616 Labourers in Textile Processing 290611 Sales, Marketing and Advertising Managers 261411 General Office Clerks 266662 Specialized Cleaners 261471 Shippers and Receivers 257283 Tilesetters 239612 Labourers in Metal Fabrication 236221 Technical Sales Specialists - Wholesale Trade 216435 Hotel Front Desk Clerks 217282 Concrete Finishers 212225 Landscape and Horticultural Technicians and Specialists 202253 Drafting Technologists and Technicians 204214 Early Childhood Educators and Assistants 207294 Painters and Decorators 20

8256 Supervisors, Landscape and Horticulture 20




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BANFF/CANMORE AREA For the Banff/Canmore area, there were 708 job postings on the Job Bank in the fourth quarter of 2011, advertising for a total of 1,963 positions. This was down substantially from 3,319 positions the previous quarter but up from 1,455 positions in the fourth quarter of 2010. Sales and service occupations dominated the Job Bank in the fourth quarter of 2011 accounting for 86 per cent of the total positions. Trades, transport and equipment operator positions accounted for 5.0 per cent of the total positions.

Figure 40: Job Bank: Number of Positions by Occupation for Q4 2011

Banff/Canmore Area

2

4

8

25

37

44

58

95

1,688

1

0 400 800 1,200 1,600 2,000





Health Occupations






Number of Positions

The top five occupations advertised on the Job Bank in the fourth quarter of 2011 for the Banff/Canmore area were light duty cleaners (409 positions), food counter attendants, kitchen helpers and related occupations (378 positions), food service supervisors (205 positions), cooks (191 positions) and hotel front desk clerks (76 positions). The top five occupations in the previous quarter were light duty cleaners (643 positions), food counter attendants, kitchen helpers and related occupations (425 positions), program leaders and instructors in recreation and sport (394 positions), cooks (282 positions) and food and beverage servers (194 positions).



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Table 22: Banff/Canmore Area Positions139


6661 Light Duty Cleaners 409

6641 Food Counter Attendants, Kitchen Helpers & Related Occupations 378

6212 Food Service Supervisors 205

6242 Cooks 191

6435 Hotel Front Desk Clerks 76


6453 Food and Beverage Servers 62

6441 Tour and Travel Guides 45

6241 Chefs 42

5254 Program Leaders and Instructors in Recreation and Sport 29

6611 Cashiers 26

6215 Cleaning Supervisors 25

3235 Other Technical Occupations in Therapy and Assessment 23

6663 Janitors, Caretakers and Building Superintendents 23

0631 Restaurant and Food Service Managers 18

6451 Maîtres d'hôtel and Hosts/Hostesses 18

0632 Accommodation Service Managers 15

6482 Estheticians, Electrologists and Related Occupations 15

7241 Electricians (Except Industrial and Power System) 15

0621 Retail Trade Managers 14

7281 Bricklayers 13

6211 Retail Trade Supervisors 12

6216 Other Service Supervisors 12

7271 Carpenters 11

7611 Construction Trades Helpers and Labourers 11

1433 Customer Service Representatives - Financial Services 10

6483 Pet Groomers and Animal Care Workers 10

1414 Receptionists and Switchboard Operators 9

6411 Sales Representatives - Wholesale Trade (Non-Technical) 7

6672 Other Attendants in Accommodation and Travel 7

6683 Other Elemental Service Occupations 7

7412 Bus Drivers and Subway and Other Transit Operators 7

6252 Bakers 6

6623 Other Elemental Sales Occupations 6

6651 Security Guards and Related Occupations 6

7251 Plumbers 6

6213 Executive Housekeepers 5

6271 Hairstylists and Barbers 5

6671 Operators and Attendants in Amusement, Recreation and Sport 5

7282 Concrete Finishers 5




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Job ad data is available each week for the Job Bank.140 Since July 21 2009, job postings for Calgary and surrounding area varied from a low of 1,240 postings the week of January 5, 2010 to a high of 3,511 postings the week of September 27, 2011. Job postings for Banff/Canmore area varied from a low of 71 postings the week of December 1, 2009 to a high of 272 postings the week of August 31, 2011.

Figure 41: Number of Job Postings on the Job Bank per week

3,511

1,240

27271

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Jul 2

1 09

Sep 3

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Oct 1

3 09

Nov

24

09

Jan

5 10

Feb 1

7 10

Mar

31

10

May

11

10

Jun

22 1

0

Aug 1

0 10

Sep 2

2 10

Nov

2 1

0

Dec

15

10

Feb 1

11

Mar

24

11

May

3 11

Jun

16 11

Aug 2

11

Sep 1

3 11

Oct 2

5 11

Dec

6 11

Nu

mb

er

of

Jo

b P

osti

ng

s

Calgary and Surrounding Banff/Canmore

140 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.



110

APPENDIX A

SURVEY METHODOLOGY The Q4 2011 Calgary and Area Employer Survey is based on responses to a telephone questionnaire conducted in November and December 2011. The survey sampled 205 Calgary and area companies with <10 employees. Following are the number of respondents from each industry sector included in the sample:

IndustryNumber of

Respondents

Mining & Oil & Gas 20Construction 21Manufacturing 20Wholesale & Retail Trade 21Transportation & Warehousing 20Professional, Scientific & Technical Services 20Health Care & Social Assistance 22Accommodation & Food Services/Arts & Entertainment 21Finance, Insurance, Real Estate & Leasing 20Other 20Total 205

The ʻOtherʼ 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.

Documents

Calgary & Area Labour Market Report - Fourth Quarter · Calgary Region Economy ... The supply of homes available for sale at the current sales ratio declined from 7.7 months to 7.0