Chronic Rigidity: The East's Labour Market Problem and How to Fix It

Canada’s generally good labour market performance over the past several years, exemplified in a 33-year, record-low unemployment rate, masks strikingly large regional disparities. In September 2007, the national unemployment rate was 6 percent, but it ranged from 2.8 percent in central Alberta to 17.8 percent in southern Newfoundland and Labrador. Such wide variances are also present within single provinces, from 5.4 percent to 12 percent in New Brunswick, for example, in that same month. These statistics suggest rigidity in Canada’s labour market. The economy creates jobs at a rapid pace, but people do not readily move to where the jobs are, leaving large pockets of unemployment. And hence our economy as a whole does not achieve its full economic potential.