Atlantic Labour Market Catching Up

Atlantic Canada’s labour market is catching up to the rest of the country, but still suffers higher unemployment and seasonality due to unnecessary barriers to job creation, says a study by the Fraser Institute. The study finds that barriers to job creation in Atlantic Canada, which include high tax rates, a comparatively large government sector relative to the size of the economy, and a lack of private sector and investment, persist despite the region moving closer to Canadian norms in unemployment and seasonal work. Further, reforms to employment insurance in 1996-97 contributed to lower regional unemployment, seasonality, and EI dependence. Over the last 25 years, while unemployment and ‘seasonality’ declined nationally, the declines in Atlantic Canada were larger, bringing the labour market in the region closer to the rest of the country. And yet, seasonality and unemployment in Atlantic Canada remain higher than the national average due to these barriers to job creation. Another barrier to lower labour costs are low productivity rates that are well below the national average, especially in Nova Scotia, causing labour costs to be comparatively higher.