In this week’s ATB Economics Weekly Wrap…

• Population takes flight
• Canadian GDP - Failing to achieve lift off 
• Earnings gain altitude 
• Flying in the dark - U.S. shutdown may impact data releases
• Next week - A new jobs report!
• Chart of the week: The Indigenous population across Canada

Please note: There is no Owl on Monday, October 2 as ATB is closed to observe the National Day for Truth and Reconciliation. You can find more information here.

Setting demographic records in 2023

Alberta’s nation-leading population growth is buoying consumer spending and housing activity. It’s one of the reasons we expect Alberta’s economy to grow at a faster rate than other provinces this year.

Demography stole the economic headlines on Wednesday. Statistics Canada released its population estimates for July 1, 2023. This midpoint estimate serves as ‘the number’ for 2023.

Canada’s population is now over 40 million, growing by over 1.1 million in just a year. The 3.0% increase is the fastest since 1957, and leads G7 countries.

In Alberta, the population now stands at 4.7 million as of July 1, surging 4.1% above the same time last year. That’s 184,400 new residents in one year. In people terms, this is a record, far exceeding the previous gain in 2013. In percentage terms, you need to go back to 1981 to find faster growth of 4.6%.

A new record for interprovincial inflows

Canadians have moved to wild rose country in droves. Alberta added 56,245 residents from other provinces and territories—that’s a new annual record. In fact, this is the highest net annual inflow of any province or territory since 1971. It more than reverses total net outflows to other provinces during the 2015-2021 period.

Housing affordability playing a larger role

While Alberta gained migrants from all provinces this year, BC and Ontario accounted for nearly three-quarters of the interprovincial increase. That’s a much higher share than in the past (e.g. closer to half during the 2011-2014 migration—see chart). It seems that Alberta’s relatively affordable housing is playing a greater role this time around. BC and Ontario have the highest-priced housing markets in the country, on average, with rising interest rates adding further stress. The labour market factors in as well: employment growth has been stronger here than the rest of the country this year.

A surge in non-permanent residents (NPRs)

NPRs include temporary foreign workers, international students, and asylum seekers. This population totaled 150,320 in the second quarter of 2023, up 63,277 from the same time last year—exceeding the gain from immigration. For the first time, Statistics Canada has provided a detailed breakdown of this population. The majority (60%) were work permit holders, followed by study permit holders (24%), work and study permit holders (7%), and asylum claimants (4%). Statistics Canada notes that most of the Ukraine evacuees are classified as permit holders. 

Want more information?  The demography team at Treasury Board and Finance has more details in their second quarter report.

Two separate ‘job’ surveys with similar themes for Alberta

According to two different surveys, job growth in Alberta is outpacing the national average this year, while hourly wage gains have accelerated after two tepid years.

The Survey of Employment, Payrolls and Hours doesn’t get the same attention as the Labour Force Survey (LFS). One of the reasons is that it’s more dated—coming out with a two-month lag. It also excludes the self-employed. But there are some advantages, namely its larger sample size and its wage, vacancy, and hours worked data. The payroll survey shouldn’t be ignored—it’s used to measure roughly 15% of GDP according to Statistics Canada!

It’s always reassuring when two different surveys intended to measure similar things trend in the same direction. July payroll employment was up 3.8% over the same month last year, and 4.4% on a year-to-date (YTD) basis. This roughly aligns with growth in employment (less self-employed) in the LFS (4.3% and 4.0%, respectively) over the same period.

On the wage side, we see stronger growth this year across both surveys than in the past two years. Fixed-weighted hourly earnings are up 3.5% YTD, and hourly earnings (excluding overtime) are up 4.3% YTD. This compares to 3.6% YTD in hourly wages in the LFS over the same period. In 2022, the gains were more muted (1-3% range depending on the measure).

One thing unique to the payroll survey is job vacancies, which continue to trend lower in Alberta and across Canada. More jobs are getting filled, with Alberta job vacancies now at 80,130—down from the peak of 107,895 in August 2022, but still above the pre-pandemic level of around 55,000.

U.S. government shutdown could impact key data releases 

With only two days left before a potential U.S. government shutdown, a broad suite of ‘non-essential’ services could be suspended. One casualty could be economic data.

Closely watched U.S. economic indicators like employment and inflation could face delays with a government shutdown, increasing reliance on private sector sources.  A dearth of data poses a challenge for policy makers like the Federal Reserve, which has emphasized a ‘data dependent’ approach to future interest rate decisions following its ‘hawkish’ pause last week.

Next week: September jobs report

September Labour Force Survey numbers arrive on October 6. In August, employment rose 40K in Canada, but the unemployment rate stayed at 5.5% following three straight monthly increases. With rapid population growth, Canada will need to churn out similar gains to keep the unemployment rate from rising—a scenario that appears less likely amid a weakening economic backdrop. This release will be watched closely by the Bank of Canada ahead of its October 25 rate decision.

Alberta led the charge last month, posting an 18K gain, with its unemployment rate falling to 5.7%. That job gain—the largest since January—will be hard to beat. Our forecast incorporates a slowdown in the final months of the year as higher interest rates bite. That said, we’ve been surprised by the resiliency of the job gains in the province, and the recent surge in oil prices provides a tailwind.

Interesting fact…At 87,600 as of the 2021 Census, Edmonton is home to the largest Indigenous population in Alberta representing 31% of all Indigenous Peoples in Alberta. Only Winnipeg has a larger Indigenous population at 102,075. Calgary is in second spot in Alberta with an Indigenous population of 48,625 (17% of all Indigenous Peoples in Alberta).

Reflecting on Indigenous economic outcomes

The Indigenous economy in Alberta is large and growing, but overall labour force outcomes of Indigenous Peoples in Alberta continue to lag that of non-Indigenous Albertans.

This Saturday, September 30 marks the third National Day for Truth and Reconciliation and Orange Shirt Day. The following facts and figures drawn from the 2021 Census point to the ongoing gaps between the economic outcomes among the Indigenous and non-Indigenous populations and are intended to provide some food for thought as we reflect upon the past, present and future of First Nations, Métis and Inuit communities.

• Indigenous Peoples in Alberta numbered 284,470 and accounted for 6.8% of the total provincial population in the 2021 Census, up from 6.5% in 2016.
• There was a 10-year difference in the median age of Indigenous Peoples in Alberta (28.4 years) and non-Indigenous Alberta (38.8 years).
• About 38% of Indigenous Peoples in Alberta aged 15 and over had a postsecondary certificate, diploma or degree compared to 57% of the non-Indigenous population. The gap is wider among those aged 25 to 34 with 43% of Indigenous Albertans holding a postsecondary credential compared to 67% of non-Indigenous Albertans.
• The labour force participation rate of Indigenous Peoples in Alberta was 62.4% compared to 68.4% for non-Indigenous Albertans. Once again, the gap is larger among young people with 73.7% of Indigenous Peoples in Alberta aged 25-34 participating in the labour force versus 85.7% for the non-Indigenous population. (The participation rate is the share of the population 15 and over who are working or looking for work.)
• It is a similar story for the unemployment rate at 18.5% for the Indigenous population versus 11.1% for the non-Indigenous population. In this case, the gap is roughly the same among 25-34 year olds.
• Labour force statistics in the 2021 Census were heavily influenced by the pandemic, which resulted in a jump in unemployment rates and lower labour force participation across the Indigenous and non-indigenous populations. However, similar gaps also appear in the 2016 Census.
• The median income from employment for an Indigenous Person in Alberta was $34,000 compared to $42,400 for non-Indigenous Albertans, for a difference of 25%. 

Our Chart of the Week shows the size of the Indigenous population in each province and territory along with the Indigenous population’s share of the total provincial population.

Daily trivia

Answer to the previous trivia question: In June 2021, the Government of Canada passed Bill C-5 to make September 30 the National Day for Truth and Reconciliation.

Today’s trivia question: What percentage of the Canadian population identified as Indigenous in the 2021 Census?