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2015>Q1

This Calgary and Area Labour Market Report provides labour market and economic information for the Calgary Region, Alberta and Canada for the first quarter of 2015.

Applications Management Consulting Ltd.

Calgary and Area Labour Market - 2015

Q1 REPORT

Table of Contents.................................................................................................Summary 1

..............................................................................................Economic Growth 1

...................................................................................Consumer Price Inflation 2

..................................................................................................Housing Market 3

......................................................................................Employment Insurance 5

......................................................................................Labour Force Statistics 6

.........................................................................................Industry Employment 8

...............................................................................................Employer Survey 9

........................................................................................The Economy 13................................................................................Calgary Region Economy 13

...........................................................................................................Economic Growth 13

...........................................................................................................................Inflation 16

...........................................................................................................................Housing 17

...........................................................................Non-Residential Building Construction 20

..............................................................................................Average Weekly Earnings 21

...................................................................................................Employment Insurance 22

.......................................................................................................................Population 23

.............................................................................................Alberta Economy 24...........................................................................................................Economic Growth 24

........................................................................................................................Oil Prices 26

............................................................................................Major Construction Projects 27

......................................................................................................Crude Oil Production 28

..........................................................................................................Active Drilling Rigs 29

......................................................................................................Housing Affordability 30

.....................................................................................................................Retail Sales 31

.......................................................................................................................Population 32

.........................................................................................Canadian Economy 34

Calgary and Area Labour Market - 2015 Q1 Report

...........................................................................................................Economic Growth 34

...........................................................................................................................Inflation 36

..............................................................................................................................Trade 37

...........................................................................................................................Housing 38

..............................................................................................................Monetary Policy 40

....................................................................................................................................Oil 40

......................................................................................Global/U.S. Economy 42................................................................................................Global Economic Growth 42

................................................................................................................Forecast Risks 44

....................................................................................................U.S. Economic Growth 45

.......................................................................................................Consumer Spending 46

..............................................................................................................................Trade 47

...........................................................................................................................Housing 48

....................................................................................................................................Oil 49

..........................................................................Labour Market Review 51......................................................Calgary Census Metropolitan Area (CMA) 51

....................................................................................................................Employment 51

...............................................................................................................Unemployment 52

.............................................................................................................Alberta 53....................................................................................................................Employment 53

...............................................................................................................Unemployment 57

............................................................................................................Canada 58....................................................................................................................Employment 58

...............................................................................................................Unemployment 60

................................................................................................................Job Vacancies 61

...................................................................................Employer Survey 62..................................................................................................................Survey Profile 62

............................................................................................................Business Activity 63

..........................Employment: Past Layoffs, Vacant Positions and Future Employment 66

..................................................................................................Recruitment Resources 69

......................................................................................................Recruiting Difficulties 71


.........................................................................................................Employee Turnover 76

........................................................................................................................Retention 79

..................Supplemental Questions - Focus on Employee Training and Development 82

.................................................................................Job Bank Analysis 91.................................................................................................City of Calgary 91

.................................................................Communities Surrounding Calgary 92

........................................................................................Banff/Canmore Area 92

.......................................................Appendix A: Survey Methodology 96..............................Appendix B: Employer Survey Occupation Results 97


ECONOMIC GROWTHRecent and forecasted overall output growth in the Calgary region and how it compares to conditions in Alberta and the rest of the country.

Q1-2015

1

Summary

The Calgary economy was once again a leader in economic growth in 2014, but the sharp decline in oil prices will significantly dampen investment and labour market prospects this year and next.Economic Growth

PAST GROWTH

While oil prices began their decline in mid-2014, the corresponding negative impact on economic growth was not immediately observed in Alberta. Real GDP growth averaged 4.0% in Alberta and an even stronger 4.5% in Calgary, significantly outpacing the national average of 2.4%.

Calgary

Alberta

Canada

0% 1% 2% 3% 4% 5%

GDP Growth in 2014

CURRENT GROWTH

This year, persistently low oil prices are expected to lead to a downturn in Calgary as well as the rest of Alberta. While consumers and exporters in Central Canada should experience a boost from cheaper gasoline and the depreciated dollar, the oil industry’s contraction will be most acute in Alberta, with some forecasters anticipating a recession in the province. Note that the forecast for 1.5% growth in Calgary is likely optimistic and may not fully internalize the impact of lower oil prices on the region’s economy.

Calgary

Alberta

Canada

-2% -1% 0% 1% 2% 3%

Forecasted GDP Growth in 2015

FUTURE GROWTH

The direct impact of lower capital investment and employment in Alberta’s oil industry will be coupled with an indirect slowdown in other related sectors, notably construction and retail spending. While growth in Alberta is expected to rebound modestly in line with a projected recovery in oil prices next year, the near-term growth outlook will remain muted relative to past years. Given Calgary’s role as the head office location for many of Canada’s energy firms, its forecasted 2.6% growth will likely be downwardly revised.

Calgary

Alberta

Canada

0% 1% 2% 3% 4%

Forecasted GDP Growth in 2016


CONSUMER PRICE INFLATIONAn overview of how consumer prices have changed in the Calgary region relative to provincial and national trends.

Q1-2015

2

Consumer price growth moderated in Canada during late 2014 and into 2015 due primarily to lower gas prices. Price growth was slightly negative in Alberta, but is expected to increase in line with the national average through the remainder of the year.Consumer Price Inflation

PAST INFLATION

In 2014, Alberta led all other provinces in overall consumer price growth at 2.6%. A driving factor in Alberta’s rising prices was the shelter component, which was up 4% annually compared to the national average of 2.7%. In the Calgary region, the cost of shelter increased by an even greater 5.5% to put the city ahead of the provincial average.

Calgary

Alberta

Canada

0% 1% 2% 3% 4%

Inflation Average in 2014

CURRENT INFLATION

At the end of the first quarter, strong declines in the prices of gasoline (-23%), electricity (-12%) and natural gas (-42%) led to a severe moderation in consumer price growth in Alberta and the Calgary region. While the rest of Canada also saw lower prices at the pumps, the decline was less than that of Alberta’s; and electricity and natural gas prices were up slightly on a national basis. With the exception of Prince Edward Island, Alberta was the only province to post overall negative price change from year-ago levels in March 2015.

Calgary

Alberta

Canada

-1% 0% 1% 2% 3%

Inflation in March 2015 (y/y)

FUTURE INFLATION

As oil and energy prices gradually recover and stabilize through 2015 and 2016, consumer prices in Alberta and the Calgary region are expected to increase in tandem with the national average. Along with cheaper gasoline, the drop in oil prices and resulting moderation in investment, labour market conditions and consumer demand should keep Alberta’s all-items inflation rate substantially below that of 2014.

Calgary

Alberta

Canada

0% 1% 2% 3% 4%

Forecasted Inflation Average in 2015


HOUSING MARKETRecent trends in homebuilding, home sales and housing prices in the Calgary region and across the country.

Q1-2015

3

Housing MarketWhile most major housing markets in Canada posted moderate improvements in activity during early 2015, the impact of lower oil prices on employment and confidence levels has contributed to a slowdown in Alberta. The housing deceleration was particularly acute in the Calgary region.

In Calgary, housing starts were down more than 25% relative to the first quarter of 2014. Alberta as a whole managed to post an increase over the same period, primarily due to a large surge in building activity within Edmonton’s volatile multiple-family sector. Nationally, housing starts were up just under 4% from year-ago levels. Housing starts are typically a leading indicator of future housing market activity.

Existing home sales in the Calgary region totaled 4,921 during the first quarter of 2015, a steep 33% drop relative to 7,335 in the first quarter of 2014. A weakening in sales activity was observed throughout Alberta compared to year-ago levels, though the decline was less severe than Calgary’s. On a national basis, existing home sales were up more than 4% with most major markets outside of Alberta exhibiting broad sales growth over the past twelve months.

Q1 2014 Q1 2015

0

10,000

20,000

30,000

40,000

Calgary Alberta Canada

35,175

10,183

3,177

33,923

8,1524,265

Calgary

Alberta

Canada

-35% -25% -15% -5% 5%

% Change in Existing Sales


HOUSING MARKETRecent trends in homebuilding, home sales and housing prices in the Calgary region and across the country.

Q1-2015

4

The average sales price of an existing home in Calgary fell by 2% over the past twelve months to about $449,000. A similar rate of home price decline was observed throughout the province, where the average price was $391,000 during the first quarter of 2015. Conversely, the average sales price of an existing home in Canada increased by a substantial 7% over the same period, with much of the growth driven by the hot markets of Toronto and Vancouver.

Q1 2014 Q1 2015

$350,000

$400,000

$450,000

$500,000


$428,178

$390,821

$448,522

$399,970$400,046

$457,510


EMPLOYMENT INSURANCEChanges in the number of Employment Insurance (EI) beneficiaries, as well as the traits of beneficiaries, reflect ongoing labour market developments in the Calgary region and across the country.

Q1-2015

5

Employment InsuranceIn Calgary, the number of EI recipients jumped nearly 8% on the month in March 2015, and was up more than 17% from a year ago, with an even stronger rate of increase observed in Alberta. Nationally, the number of beneficiaries was relatively steady.

CALGARY

Mar 2014

Feb 2015

Mar 2015 12,000

11,150

10,250

ALBERTA

Mar 2014

Feb 2015

Mar 2015 38,750

35,570

31,080

CANADA

Mar 2014

Feb 2015

Mar 2015 517,940

512,070

515,320

Alberta posted a monthly rise in EI beneficiaries across all major occupation groups in March 2015, with the largest increases in jobs related to processing, manufacturing and utilities, natural and applied sciences, and primary industry.

Processing, manufacturing and utilities

Natural and applied sciences

Primary industry

Management

Business, finance and administrative

Art, culture, recreation and sport

Trades and transport

Social science, education, government and religion

Sales and service

Health 2%4%4%

6%6%

9%11%

19%20%

22%

Monthly Change in EI Receipt by Major Occupation Category in Alberta, March 2015


LABOUR FORCE STATISTICSLabour Force Statistics include the participation, employment, and unemployment rates.

Q1-2015

6

Calgary has higher participation and employment rates than Alberta and Canada. Calgary has a lower unemployment rate than Alberta and Canada.

CALGARY

Calgary’s unemployment rate averaged 5.0% in the first quarter of 2015, up from 4.8% the previous quarter and 4.9% year-over-year.

Calgary’s unemployment rate is forecast to average 5.1% in 2015 and 4.6% in 2016.

Calgary’s labour force participation rate increased to 73.8% in the first quarter of 2015, from 73.1% the previous quarter but was unchanged year-over-year.

ALBERTA

Alberta’s unemployment rate averaged 5.1% in the first quarter of 2015, up from 4.5% the previous quarter and 4.7% year-over-year.

On average, there were 129,900 unemployed people in Alberta in the first quarter of 2015, up 15,900 from 108,000 unemployed in the previous quarter.

The number of long term unemployed persons in Alberta (unemployed 27+ weeks) rose to 18,900 in March 2015, from 17,200 in March 2014. They accounted for 13% of the total unemployed in the province.

CANADA

Canada’s unemployment rate averaged 6.7% in the first quarter of 2015, unchanged from the previous quarter but down from 7.0% year over year.

Saskatchewan had the lowest unemployment rate among provinces in the first quarter of 2015 at 4.6%, followed by Alberta (5.1%) and Manitoba (5.7%).

RBC Economics is forecasting Canada’s unemployment rate to drop to 6.4% in 2015 and 6.3% in 2016.

Labour Force Statistics


Labour Force Survey Stats Q1 Calgary Alberta Canada✓ Participation Rate 73.8% 73.0% 65.8%

✓ Employment Rate 70.1% 69.3% 61.4%

✓ Unemployment Rate 5.0% 5.1% 6.7%

LABOUR FORCE STATISTICSLabour Force Statistics include the participation, employment, and unemployment rates.

Q1-2015

7

CALGARY

Approximately 79% of all employed Calgarians were working full-time in the first quarter of 2015. Of all the full-time workers, 58% were men.

Full-time employment in Calgary increased by 27,200 or 4.1% year-over-year in the first quarter of 2015. In contrast, part-time employment declined by -900 or -0.7%.

Table 282-0128 Labour force survey estimates

ALBERTA

The number of part-time workers in Alberta increased by 14,200 or 3.9% year-over-year in the first quarter of 2015.

Employment for men increased by 29,000 or 2.3% year-over-year in the first quarter of 2015, while employment for women increased by 20,100 or 2.0%.

Employment for youth aged 15 - 24 rose by 8,200 or 2.6% year-over-year in the first quarter of 2015.

CANADA

Part-time employment in Canada increased by 18,800 or 0.6% year-over-year in the first quarter of 2015.

Despite this growth full-time employment still makes up 85% of total employment in Canada.

A narrowing gap between male and female participation rates, as well as the shift to an aging population in Canada, may work to increase the prominence of part-time hiring.


0

3750

7500

11250

15000


3,428

381129

14,468

1,924683

Employment (x1000)Full-Time Part-Time

INDUSTRY EMPLOYMENT Employment by industry includes the jobs that saw the greatest year-over-year increase and decrease.

Industry Employment

These are the industries that posted the greatest annual change in employment in Calgary, Alberta and Canada in Q1 2015.

Calgary Highlights

Transportation and Warehousing

+15,500 jobs

Health Care and Social Assistance

+8,900 jobs

Utilities

-2,500 jobs

Accommodation and Food Service

-11,100 jobs

Alberta Highlights


+28,900 jobs

Transportation and Warehousing

+25,200 jobs

Forestry, Fishing, Mining, Oil and Gas

-9,100 jobs

Wholesale and Retail Trade

-21,300 jobs

Canada Highlights


+66,000 jobs

Educational Services

+25,200 jobs

Manufacturing

-28,800 jobs

Other Services

-39,600 jobs


Q1-2015

8

EMPLOYER SURVEYBusiness activity looks at the expansion, downsize and layoffs of companies in the Calgary region.

Q1-2015

9

Employer Survey

Of the 3,207 layoffs reported by employers in the three months prior to their survey, 1,853 (58%) were in the mining and oil and gas industry and 955 (30%) were in the construction industry.

PAST GROWTH

On balance, 15% of employers reported that their company expanded in the 12 months prior to their survey, down from 21% in Q1 2014.

Employers surveyed in Q1 2015 reported the lowest rate of company expansion in the last 5 years.

While company expansion has slowed in the Calgary region in Q1 2015, employers still reported business growth on balance. In contrast, during the 2009-10 economic downturn, employers reported overall downsizing.

2015

2014

2013

2012

2011

2010

2009-20% -10% 0% 10% 20% 30%

Q1 Company Expansion

FUTURE GROWTH

On balance, only 5% of employers anticipate a business expansion in the 12 months following their survey, down significantly from 31% in Q1 2014.

From 2011-2014, employers reported a relatively consistent rate of anticipated company expansion. Employers surveyed in Q1 2015 reported a substantially lower rate of anticipated company expansion than in previous years. The marked change in Q1 2015 could indicate that companies are less optimistic because of current economic conditions.

2015

2014

2013

2012

2011

2010

20090% 10% 20% 30% 40%

Q1 Anticipated Company Expansion

LAYOFFS

Thirty-two per cent of employers reported that they laid off workers in the three months prior to their survey, up significantly from 20% in Q1 2014.

Employers surveyed in Q1 2015 reported a substantially higher rate of layoffs than in all previous years except 2009.

A large majority of Q1 2015 layoffs (88%) were reported in the mining and oil and gas and construction industries. This may represent the affect the drop in oil prices is having on employment in the Calgary region.

2015

2014

2013

2012

2011

2010

20090% 10% 20% 30% 40%

Q1 Layoffs


EMPLOYER SURVEYRecruitment and retention looks at the hiring practices of companies in the Calgary region.

Q1-2015

10

The most frequently reported vacant positions were program leaders and instructors in recreation, sport and fitness, registered nurses and nurse aides, orderlies and patient service associates.

The positions employers reported the most difficulty recruiting were cooks, information systems analysts and consultants and retail and wholesale trade managers.

The positions employers reported had the highest voluntary turnover were food and beverage servers, nurse aides, orderlies and patient service associates and cooks.

Ninety-three per cent of employers reported approximately 10,110 employees left as a result of voluntary turnover in the 12 months prior to their survey. Overall, the voluntary turnover rate was 7.2%.

PAST RECRUITMENT

Employers were asked if they had difficulty recruiting qualified employees in the 12 months prior to their survey. Fifty per cent of employers reported difficulty recruiting, down from 60% in Q1 2014.

201520142013201220112010

0% 20% 40% 60%

Q1 Past Difficulty

FUTURE RECRUITMENT

Employers were asked if they anticipated having more, less or the same difficulty recruiting qualified employees in the 12 months following their survey. On balance, 32% anticipated less difficulty recruiting, the lowest since at least 2010.

201520142013201220112010

-40% -5% 30%

Q1 Future Difficulty

PAST TURNOVER

Employers were asked if they had any voluntary turnover in the 12 months prior to their survey. Ninety-three per cent of employers reported voluntary turnover, the highest since at least 2010.

2015

2013

2011

0% 50% 100%

Q1 Past Turnover

FUTURE TURNOVER

Employers were asked if they anticipated voluntary turnover would be higher, lower or the same in the 12 months following their survey. On balance, 21% anticipated lower turnover, the lowest since at least 2010.

201520142013201220112010

-30% -10% 10%

Q1 Future Turnover


EMPLOYER SURVEYRecruitment and retention looks at the hiring practices of companies in the Calgary region.

Q1-2015

11

✓ Employers reported career and classified websites was the most successful recruitment resource for attracting workers in the 12 months prior to their survey.

✓ Employers reported providing a competitive salary was the most successful employee retention strategy in the 12 months prior to their survey.

Career and classified websitesCompany website/internal postingsWord of mouth/employee referrals

Walk-ins/unsolicited resumesSocial media

Employment agenciesJob fairs

NewspapersIndustry associations

SignageTechnical/trade institutes

Colleges/universitiesMagazinesTelevision

OtherUnsure 2%

1%1%1%1%1%1%1%

2%2%2%

5%7%

25%25%

27%

Competitive salaryCompetitive benefits

Learning/growth opportunitiesPositive work environment

PerksExcellent management/supervisionReward and recognition programs

Company cultureInteresting/challenging work

Flexible work measuresEmployee engagement

Cash bonusesExcellent communication

Performance reviewOther

Work/life balanceJob security

Employee referral programNothingUnsure 12%

1%1%1%1%

2%2%2%

4%4%4%4%

5%5%5%

6%6%

11%13%

14%


EMPLOYER SURVEYThe Q1 2015 survey has supplemental questions focused on employee training and development practices.

Q1-2015

12

“Employee training and development is a top priority for our company.”

Seventy-six per cent of employers strongly agreed or agreed that employee training and development is a top priority in their company. Only 6% of employers disagreed or strongly disagreed.

Ninety per cent of the health care and social assistance employers and 80% of the accommodation and food services/arts and entertainment, finance, insurance, real estate and leasing and mining and oil and gas employers agreed that employee training and development is a top priority in their company. Only 60% of the professional, scientific and technical services employers agreed.

Employers reported that the biggest challenge faced by their companies in terms of training employees was “Time constraints - too busy.”

Time constraints - too busyManaging employees’ diverse learning needs - knowing what training is relevant and available

Too costly/not in budgetTurnover - employee leave once trained

Employees aren’t interested in training - they are fully trainedThe locations where employees work are not near the training

English is a second language for many of our employees - language barrierOther

Employees don’t need training - they are fully trainedThe length of training that is required

Communicating effectively with staff about their training needsUnsure

None 4%7%

1%1%2%2%

4%5%5%

9%13%

17%29%


2%4%

18%

37%

39%

Strongly AgreeAgreeNeutralDisagreeStrongly disagree

The Economy

Calgary Region EconomyThis section on the Calgary Region Economy includes a discussion of: Economic Growth, Inflation, Housing, Non-Residential Building Construction, Average Weekly Earnings, Employment Insurance and Population.

Economic GrowthThe steep drop in crude oil prices since mid-2014 has adversely affected the Calgary Region economy. In the first quarter of 2015, several energy companies announced layoffs, including ConocoPhillips Canada, Talisman Energy, Nexen Energy, Cenovus, Newalta Corp. and Suncor Energy. Head office staff in Calgary as well as field workers were directly impacted. Many energy firms have also implemented wage cuts and salary freezes, eliminated bonuses, and offered sabbaticals and shortened workweeks.

“Industry-wide layoffs since the start of the year now number in the thousands, although most have been in field operations. The loss of white-collar jobs shows the slowdown has entered a new phase that could further crimp already-weakening Alberta and Canadian economies.” 1

While the majority of the downsizing in the first quarter occurred in the energy sector, many Human Resource firms specializing in corporate layoffs are increasingly working with organizations in other sectors of the economy.

"An interesting shift we are seeing is that a number of our new clients are outside the oil and gas industry, who realize the marketplace is a little bit tougher," says Jennifer Doiron, a career transition consultant with Cenera. "We are seeing everything – finance, manufacturing, the service industry, not for profits."2

The Calgary Census Metropolitan Area (CMA) economy expanded by a robust 4.5 per cent in 2014. Calgary posted the third highest Gross Domestic Product (GDP) growth rate among the 28 major CMAs in Canada in 2014, behind Edmonton (5.6 per cent) and Saskatoon (5.3 per cent). Calgary’s goods-producing sector led the way in 2014, with a 6.4 per cent increase in construction output and a 5.6 per cent increase in primary and utilities output. Manufacturing output also expanded by 2.7 per cent in 2014. Output in the services-producing sector rose by 3.7 per cent in 2014, led by growth in transportation and warehousing (+7.8 per cent) and wholesale and retail trade (+5.6 per cent). Output in


1 The Globe and Mail, Canadian oil patch layoffs spread to downtown Calgary, Jeffrey Jones and Shawn McCarthy, March 18, 2015.

2 CBC News, Energy industry layoffs in Calgary a boon for HR companies, Kyle Kakx, March 18, 2015.

THE ECONOMYThe Calgary region economy is affected by global and U.S. economic activity and by economic drivers in the Canadian economy and elsewhere in Alberta.

13

the business and personal services sectors also rose by more than 4.0 per cent in 2014, while public administration was the only major sector to contract (-2.9 per cent).3

More moderate economic growth of 1.5 per cent is projected for the Calgary CMA in 2015, according to the Conference Board of Canada’s most recent economic forecast.4 This rate of growth would place the city in second last place among the 28 major CMAs in Canada, just ahead of Greater Sudbury (+1.3 per cent). Weak oil prices are expected to limit growth in several sectors in Calgary, including manufacturing (+0.2 per cent), primary and utilities (+0.3 per cent) and transportation and warehousing (+1.5 per cent). The wholesale and retail trade (+2.4 per cent) and construction sectors (+2.5 per cent) are also forecast to advance at a more modest rate in 2015. Public administration, which contracted for the third consecutive year in 2014, is projected to expand by 1.0 per cent in 2015.5

The risk of a recession in Calgary cannot be dismissed. The Conference Board of Canada will likely downgrade its next forecast for the Calgary economy, given the ongoing energy sector weakness.

“...the dramatic decline in oil prices over the past few months will lead to sharply slower growth this year. Primary and utilities output and manufacturing output are expected to be essentially flat. The services sector will be affected as well, especially those industries with big ties to the oil and gas sector. Consumers are likely to be more cautious as well, hampering growth in wholesale and retail trade. In all, real GDP is forecast to increase by a modest 1.5 per cent in 2015. Unfortunately, oil prices have fallen even further than expected since this forecast was completed, and so our current 2015 outlook for Calgary’s economy must be viewed as optimistic. Next year, economic growth is expected to improve to 2.6 per cent, in line with recovering oil prices.” 6


3 The Conference Board of Canada, Metropolitan Outlook 1: Winter 2015, Economic Insights into 13 Canadian Metropolitan Economies, March 2015, p.4-5.

4 Ibid.

5 Ibid and Calgary Real Estate Board 2015 Economic Outlook & Regional Market Forecast, p.8.

6 The Conference Board of Canada, Metropolitan Outlook 1: Winter 2015, Economic Insights into 13 Canadian Metropolitan Economies, March 2015, p.4.

14 THE ECONOMY

Calgary CMA Real GDP Growth by Industry2015 Forecast (annual growth rate)7

Source: The Conference Board of Canada, Metropolitan Outlook 1: Winter 2015, Economic Insights into 13 Canadian Metropolitan Economies, March 2015.

The City of Calgary’s most recent economic outlook is slightly more pessimistic and projects the Calgary Economic Region (CER) economy to contract by 1.0 per cent in 2015, following growth of 4.0 per cent in 2014.

“Economic growth will stagnate in 2015 as the CER adjusts to sharply lower oil prices. Energy firms have cut or are planning to cut capital expenditures in 2015, and this should have an indirect impact on Calgary given Calgary’s role as the head office location for a significant portion of Canada’s energy firms. All sectors of Calgary’s economy will be adversely affected by reduced capital expenditures by energy firms and by the provincial government, given the importance of oil to Alberta and Calgary.” 8

0.7%%

1.5%%

2.1%%

2.2%%

2.4%%

2.8%%

1.5%%

0.0%% 0.5%% 1.0%% 1.5%% 2.0%% 2.5%% 3.0%%

Industrial%

Transporta9on%&%warehousing%

Office%

NonCcomercial%services%

Wholesale%&%retail%trade%

Personal%services%

All%industries%

!2.0%&!1.0%&0.0%&1.0%&2.0%&3.0%&4.0%&5.0%&6.0%&

2010& 2011& 2012& 2013& 2014& 2015f& 2016f& 2017f& 2018f& 2019f& 2020f&

Source:&City&of&Calgary,&Calgary&&&Region&Economic&Outlook,&2015&!&2020,&Spring&2015.&

Calgary'Economic'Region'(CER)'Annual'Real'GDP'Growth'Rates,'Actual'and'Forecast'(%)'


7 The office sector includes the information and cultural, finance, insurance and real estate, business services and public administration industries. The industrial sector includes the manufacturing, construction and primary and utilities industries.

8 City of Calgary, Calgary and Region Economic Outlook, 2015 - 2020, Spring 2015, p.14.

15 THE ECONOMYTHE ECONOMY

InflationConsumer prices in Calgary declined 0.1 per cent in the twelve months to March 2015, following a 1.1 per cent increase the previous month. Much of the deceleration in Calgary’s inflation rate was due to lower energy prices. Transportation costs declined 3.6 per cent year-over-year in March 2015, driven by a 23 per cent drop in the price of gasoline. Calgarians also paid 2.4 per cent less for shelter in March, as natural gas prices were down 42 per cent year-over-year and electricity prices fell 12.5 per cent.

Consumer prices rose in the remaining six major categories in March, led by increases in household operations, furnishing and equipment (+3.2 per cent) and food (+3.1 per cent). Prices for vegetables and meat were up 9 and 10 per cent respectively.9

In Alberta, consumer prices also declined 0.1 per cent in March 2015, following a 0.9 per cent increase in February. Similar to Calgary, lower energy prices were the main cause of the slight deflation, as consumer prices excluding energy increased 2.6 per cent in the 12-months to March 2015. Nationally, the inflation rate in March was 1.2 per cent, up slightly from 1.0 per cent in February.

All-Items Consumer Price Index, Canada, Alberta and CalgaryYear-Over-Year Per Cent Change, January 2012 - March 2015

Source: Statistics Canada, CANSIM Table 326-0020.

!0.1%&3.1%&

!2.4%&3.2%&

0.9%&!3.6%&

1.0%&1.8%&2.1%&

!6.0%& !4.0%& !2.0%& 0.0%& 2.0%& 4.0%&

All!items&Consumer&Price&Index&Food&

Shelter&Household&ops.,&furnishings&&&equip.&

Clothing&and&footwear&TransportaKon&

Health&and&personal&care&RecreaKon,&educaKon&and&reading&Alcoholic&beverages&and&tobacco&

12#month)per)cent)change)

Consumer)Price)Index,)Calgary,)March)2015)12#Month)Change)in)the)Major)Components)

!1.0%&

0.0%&

1.0%&

2.0%&

3.0%&

4.0%&

5.0%&

Jan!12&

Mar!12&

May!12&

Jul!1

2&Sep!12&

Nov!12&

Jan!13&

Mar!13&

May!13&

Jul!1

3&Sep!13&

Nov!13&

Jan!14&

Mar!14&

May!14&

Jul!1

4&Sep!14&

Nov!14&

Jan!15&

Mar!15&

Canada& Alberta& Calgary&


9 Statistics Canada CANSIM table 326-0020 and City of Calgary, March 2015 Inflation Review, April 17, 2015.

16 THE ECONOMYTHE ECONOMY

“Consumer prices rose in eight provinces in the 12 months to March, with Ontario posting the largest increase [+1.6 per cent]. Among the Atlantic provinces, three recorded year-over-year gains in their CPIs in March, following declines the previous month. Prince Edward Island was the exception, recording its fourth consecutive decline [-0.8 per cent]. Consumer prices in Alberta also decreased year over year [-0.1 per cent].” 10

HousingBuilders in Calgary started work on 3,177 housing units during the first quarter of 2015, a considerable decline of over 25 per cent compared to the first quarter of 2014. Multi-family starts in Calgary fell 29 per cent year-over-year to 1,988 units, while single-family starts declined 19 per cent to 1,189 units.

“Existing home supply continued to rise throughout the first quarter of 2015, increasing competition with the new home market and contributing to the reduction in single-detached starts. [...] Weaker current economic conditions, along with an elevated level of units under construction, have contributed to a slowdown in multifamily starts in the first quarter.” 11

Housing starts in the Edmonton CMA drove much of Alberta’s 25 per cent year-over-year increase in the first quarter of 2015. Single-family starts in Edmonton rose 8.6 per cent to 1,422 units, and multi-family starts increased 306 per cent to 4,083 units. Overall, housing starts in Edmonton were up 138 per cent year-over-year in the first quarter of 2015.

“On a year-to-date basis, multi-family starts reached 4,083 units in the first quarter of 2015, up from 1,006 in the same period of 2014. Low inventory in the new multi-family market, coupled with a relatively low vacancy rate, has spurred production in this segment. However, a relatively high number of units under construction should slow the pace of multi-family housing starts in the remaining months of 2015.” 12

Housing Starts, Alberta, Calgary and Edmonton, Q1 2014 and Q1 2015

Area Q1 2014 Q1 2015 Q1 2014 Q1 2015 Q1 2014 Q1 2015

Alberta 3,691 3,524 4,461 6,659 8,152 10,183 24.9%

Calgary CMA 1,460 1,189 2,805 1,988 4,265 3,177 -25.5%

Edmonton CMA 1,309 1,422 1,006 4,083 2,315 5,505 137.8%

Single Multiple Total % Change 2014-2015

Source: Canada Mortgage and Housing Corporation


10 Statistics Canada, The Daily, Consumer Price Index March 2015, April 17, 2015.

11 Canada Mortgage and Housing Corporation, Housing Now Calgary, April 2015, p.2.

12 Canada Mortgage and Housing Corporation, Housing Now Edmonton, April 2015, p.2.

17 THE ECONOMY

Housing starts in Calgary reached a record in 2014, surpassing the previous high in 2006. Calgary builders started 17,131 housing units in 2014, a 36 per cent increase from 2013. Total annual housing starts in the Calgary CMA are forecast to decline 23 per cent in 2015 to 13,200 units. Single-detached starts are expected to fall 12 per cent to 5,700 units, while multi-family starts are projected to drop almost 30 per cent to 7,500 units. Overall starts are projected to decline by a further 13 per cent in 2016 to 11,500 units, led by a 20 per cent drop in multi-family starts.

“Positive net migration and low mortgage rates will continue to support housing demand in the Calgary region. However, upward pressure on housing demand in recent years will be diminished by increased economic uncertainty brought on by low oil prices and subsequent announcements of layoffs in the energy sector. In addition, rising supply on the existing home market will offer buyers more options, which will compete with the new home market.” 13

Annual Housing Starts, Actual and Forecast, Single-Detached and MultipleCalgary CMA, 2011 - 2016

Source: Canada Mortgage and Housing Corporation

Housing starts in Alberta are also projected to decline over the next two years. After reaching 40,590 units in 2014, total starts are forecast to fall 14 per cent in 2015 to 35,000 units and a further 9.1 per cent in 2016 to 31,800 units.14

New housing prices in the Calgary CMA were up 2.8 per cent year-over-year in March 2015, according to Statistic Canada’s New Housing Price Index (NHPI). While this was the smallest yearly price increase in Calgary since November 2012, it was still the largest increase across the 16 major CMAs in Canada. Nationally, the index rose 1.2 per cent year-over-year. New housing prices in the Edmonton

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13 Canada Mortgage and Housing Corporation, Housing Market Outlook Calgary CMA, Spring 2015, p.2.

14 Canada Mortgage and Housing Corporation, Housing Market Outlook Prairie Region Highlights, Second Quarter 2015.

18 THE ECONOMY

CMA rose 0.7 per cent on an annual basis in March, while seven CMAs in Canada posted annual price declines.15

New Housing Price Index (Annual % Change)Canada and Select CMAs in Canada, March 2015

Source: Statistics Canada, CANSIM table 327-0046.

Calgary’s resale housing market demonstrated buyer’s market conditions in the first quarter of 2015. Residential sales in the Calgary CMA totaled just 4,921 units, down 33 per cent from 7,335 units in the first quarter of 2014.16

“Concerns in the energy sector continue to persist, and employment figures are starting to support those concerns. [...] In February, employment figures pointed towards job losses related to the energy sector. While monthly employment gains offset the losses, most of the gains were in the traditionally lower paying industries such as the personal services sector. If this trend continues, it may influence the composition of housing demand.” 17

The average price for an existing home in Calgary declined 2.0 per cent in the first quarter of 2015 to $448,522, from $457,510 in the first quarter of 2014. Significant supply increases along with more moderate demand resulted in downward pressures on the average price in Calgary, with all unit types within city limits recording year-over-year declines.18

After reaching a record high of 33,615 in 2014, existing home sales in Calgary are expected to fall 27 per cent to 24,700 in 2015. In 2016, sales are expected to rebound slightly by 0.8 per cent and total

!2.0% !1.0% 0.0% 1.0% 2.0% 3.0%

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15 Statistics Canada, The Daily, New Housing Price Index, March 2015, May 14, 2015.

16 Canada Mortgage and Housing Corporation, Housing Now Calgary CMA, April 2015, p.28.

17 Calgary Real Estate Board, Calgary Regional Housing Market Statistics, March 2015, p.1.

18 Canada Mortgage and Housing Corporation, Housing Now Calgary CMA, April 2015, p.3.

19 THE ECONOMY

24,900. The average price for an existing home in Calgary is forecast to decline by 2.7 per cent in 2015 to $448,000. In 2016, the average price is projected to increase 1.1 per cent to $453,000 as market conditions firm.19

Non-Residential Building ConstructionInvestment in non-residential building construction in the Calgary CMA, which includes commercial building, industrial developments and institutional and government construction, amounted to $1.07 billion in the first quarter of 2015, up 11 per cent from the first quarter of 2014. Among the largest CMAs in Canada, Calgary’s growth in non-residential investment over the past year was outpaced only by Edmonton (+17.2 per cent).

Investment in Non-Residential Building Construction (Q1 2014 and Q1 2015)Selected Census Metropolitan Areas (CMAs)


Calgary’s commercial and institutional and governmental sectors drove the year-over-year increase in non-residential construction investment in the first quarter of 2015, increasing to $869.4 million (+9.4 per cent) and $181.8 million (+37 per cent) respectively. Investment in the industrial sector declined to $36.8 million in the first quarter of 2015, a 23 per cent drop year-over-year.

In Alberta, developers spent $2.74 billion on non-residential construction projects in the first quarter of 2015, an increase of 4.6 per cent compared to the first three months of 2014.

Investment in institutional and government projects in the province remained solid, increasing by 19 per cent year-over-year to $476 million.

CMA Q1 2014 Q1 2015 % ChangeToronto $2,432 $2,509 3.2%Montreal $1,519 $1,510 -0.6%Calgary $961 $1,068 11.1%Vancouver $814 $858 5.4%Edmonton $663 $777 17.2%Ottawa $602 $523 -13.1%

($millions)

0"200"400"600"800"1000"1200"1400"

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19 Canada Mortgage and Housing Corporation, Housing Market Outlook Calgary CMA, Spring 2015.

20 THE ECONOMY

Commercial activity, which makes up the majority of non-residential construction spending in Alberta, was also up 3.1 per cent year-over-year in the first quarter of 2015 to $1.89 billion. Investment in industrial structures declined 3.1 per cent year-over-year to $374 million. However, building permit data suggested that investment in commercial construction might begin to slow. In February 2015, non-residential building permits as a whole were down 46 per cent compared to June 2014,20 and commercial permits fell to $191 million, the lowest level in over three years.21

“...a drop in non-residential construction spending [in Alberta] later this year is the most probable scenario. Construction projects are lagging indicators—that is, they give a representation of economic activity and optimism that existed in the past. Building permits, on the other hand, are leading indicators that point to construction spending in the future. As The Owl on April 9, 2015 showed, non-residential building permits have dipped to their lowest level in about three years. The good news? This dip is normal and expected. Construction is set to slow down later this year and in 2016, with another cycle of expansion likely starting in 2017.” 22

Average Weekly EarningsThe average weekly earnings of payroll employees in Calgary rose by $61 or 5.7 per cent year-over-year in February 2015 to $1,135. In Alberta, average weekly earnings increased by $37 or 3.3 per cent to $1,167 over the same period. On average, Calgarians earned $184 more per week in February 2015 than the average Canadian.

Calgary’s year-over-year growth in average weekly earnings outpaced growth in consumer inflation for the third consecutive month in February 2015. In February, average weekly earnings in Calgary increased by 5.7 per cent annually, while inflation rose by 1.1 per cent. Real earnings in Calgary, therefore, rose by about 4.6 per cent year-over-year in February. Prior to December 2014, the last time average weekly earnings outpaced inflation was in August 2013.

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20 ATB Financial, The Owl, Building Permits Soften in March, April 9, 2015.

21 ATB Financial, The Owl, Commercial building permits: A ten-year perspective, April 13, 2015.

22 ATB Financial, The Owl, Non-residential construction stable at start of 2015, April 16, 2015.

21 THE ECONOMY

Average Weekly Earnings and Inflation in CalgaryPer cent change year-over-year

Source: Statistics Canada, CANSIM Table 326-0020 and CMHC, Housing Now Calgary CMA.

Employment InsuranceThere were 38,750 Albertans receiving regular Employment Insurance (EI) benefits in March 2015, an increase of 3,180 people (+8.9 per cent) compared to the previous month and an increase of 7,670 people (+25 per cent) compared to March 2014. This was the third consecutive month that Alberta led all provinces in terms of growth in the number of beneficiaries and the second largest monthly increase for the province since June 2009.23 The most significant month-over-month increases in beneficiaries occurred among those whose last occupation was in processing, manufacturing and utilities (+22 per cent or +360 people), natural and applied sciences (+20 per cent or +560) or primary industry (+19 per cent or +460). Forty per cent of all EI beneficiaries in Alberta in March 2015 were in trades, transport and equipment operator occupations, where the total number of beneficiaries increased by 830 (+5.6 per cent) to 15,620.

“There are several factors that have caused the spike in employment insurance beneficiaries. Most notable is the unemployment rate, hitting 5.5 per cent in March. Still, given the economic slowdown, a rising number of people collecting employment insurance is to be

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23 Statistics Canada, The Daily, Employment Insurance Beneficiaries, March 2015, May 21, 2015.

22 THE ECONOMY

expected. Despite this, we’re still well below the peak of 70,100 that we experienced in September 2009.” 24

In March 2015, 31 per cent of the EI recipients in the province were in Calgary. Approximately 12,000 Calgarians were receiving regular EI benefits, up 8.0 per cent from February 2015 and up 17 per cent compared to March 2014. The number of EI beneficiaries also increased 18 per cent year-over-year in Edmonton to 12,690 in March. In the rest of Alberta, the number of beneficiaries was up 39 per cent year-over-year to 14,060.

PopulationThe city of Calgary’s population reached an estimated 1,195,200 as of April 1, 2014, representing a 3.3 per cent annual increase.25 Looking ahead, Calgary’s population is forecast to increase by approximately 200,000 over the next seven years, reaching an estimated total of 1.395 million by April 2021. Over this period, natural increase is projected to account for 44 per cent of the population growth (87,800) and net migration is expected to account for 56 per cent (112,000).26

Calgary’s annual level of natural increase is projected to increase from 10,500 in 2014 to 12,900 in 2019 and then decline to 12,600 by 2021. At the same time, the annual population contribution from net migration is projected to decline from 28,000 in 2014 to 13,000 in 2020 and increase slightly in 2021 to 14,000. As net migration continues to moderate over the forecast period, a slowdown in Calgary’s population growth is inevitable.

“The rapid rate of population growth between 2010 and 2014, which was driven by net migration, is unsustainable. Therefore, population growth would moderate in the short to medium term as the pace of growth in economic activity quickens in Central Canada.” 27


24 ATB Financial, The Owl, Employment Insurance levels move higher, May 21, 2015.

25 City of Calgary, 2014 Civic Census Results.

26 City of Calgary, Spring 2015 Calgary and Region Economic Outlook, 2015 - 2020.

27 City of Calgary, Spring 2015 Calgary and Region Economic Outlook, 2015 - 2020, p.10.

23 THE ECONOMY

Calgary Actual and Forecasted Annual Natural Increase,Net Migration, Population Growth, 1992 - 2021

Source: City of Calgary

Alberta EconomyThis section on the Alberta Economy includes a discussion of: Economic Growth, Oil Prices, Major Construction Projects, Crude Oil Production, Active Drilling Rigs, Housing Affordability, Retail Sales and Population.

Economic GrowthAlberta’s economy grew at a very healthy 4.0 per cent in 2014. Output growth was positive across most major industry categories, led by transportation and warehousing (+7.3 per cent), construction (+6.4 per cent), wholesale and retail trade (+6.3 per cent), manufacturing (+4.9 per cent) and mining (+4.6 per cent).28 However, the precipitous drop in crude oil prices since mid-2014 has considerably altered the near term growth outlook for the province.

“After benefiting tremendously over the past five years from strong energy prices that saw investments and people pour into the province, lifting overall real GDP growth above 4 per cent a year, the party appears to be over—at least for the medium term.” 29

Mounting concern over weak oil prices and announcements from energy companies of layoffs and cuts to operational plans, which began in the final months of 2014, carried over into the first quarter of

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28 The Conference Board of Canada, Provincial Outlook, Winter 2015.

29 Ibid, p.62.

24 THE ECONOMY

2015. The Canadian Association of Petroleum Producers (CAPP) anticipates a 33 per cent drop in short-term capital spending in Western Canada, with investment in the oil sands forecast to fall by 24 per cent.

“Accounting for one-quarter of Alberta’s economic activity, the sharp drop in non-residential business investment is expected to cut more than 1.5 percentage points directly off real economic growth in 2015. The lingering price uncertainty is also expected to have an unambiguously negative effect on drilling activity in the province, although producers are expected to continue to churn out non-conventional production as an increasing number of new and expanded projects come online.” 30

The Alberta economy is expected to slow substantially in 2015, and there is debate as to whether the province will enter a recession. Real GDP growth forecasts for 2015 range between -1.5 per cent (Conference Board of Canada) and +0.6 per cent (RBC Economics, March 2015). While RBC Economics is at the higher end of the forecast range, it acknowledges the risk of a recession.

“Alberta saw a dramatic turn of events in recent months when it became clear that the steep drop in crude oil prices since June 2014 will have profound adverse repercussions for the province’s all-important energy sector. The risks of a recession cannot be dismissed; however, the initial position of strength in the economy is likely sufficient to keep the province in slightly positive growth territory in 2015. The persistence of energy sector weakness and an unfolding spillover into confidence prompted us to revise our forecast for 2015 real GDP growth significantly lower to 0.6% from 2.8% in our outlook in December 2014. A modest recovery in energy prices in the latter half of 2015 should stem further deterioration in confidence and support improved performance in 2016, when we expect real growth will pick up slightly to 1.1%.” 31

The Conference Board of Canada is projecting the Alberta economy to contract by 1.5 per cent in 2015. Output in Alberta’s goods-producing industries is forecast to contract 4.3 per cent in 2015, led by declines in construction (-11.5 per cent), forestry (-9.4 per cent) and mining (-3.0 per cent). Output in the services-producing industries is projected to advance by a moderate 0.9 per cent in 2015, led by 2.7 per cent growth in education and health and social assistance and 2.3 per cent growth in finance, insurance, real estate and leasing. Output in the transportation and warehousing and wholesale and retail trade industries is forecast to decline 2.8 per cent and 1.6 per cent respectively in 2015.32


30 RBC Economics, Provincial Outlook, March 2015.

31 RBC Economics, Provincial Outlook, March 2015.


25 THE ECONOMY

Contributions to Alberta Real GDP Growth, Select Industries2014 Actual and 2015 Forecast

Source: Conference Board of Canada, Provincial Outlook: Alberta, Economic Forecast, Winter 2015.

Alberta’s economic prospects are expected to improve gradually in 2016, with real GDP growth forecasts in the range of 1.1 per cent (RBC Economics, March 2015) to 2.3 per cent (CIBC Economics, February 2015).

Oil PricesWest Texas Intermediate (WTI) crude prices, the North American benchmark for high quality oil, continued to drop in the first quarter of 2015, averaging US$48.64 per barrel. This was down from an average of US$73.15 per barrel the previous quarter and from US$98.68 in the first quarter of 2014. Western Canada Select (WCS), the Canadian heavy oil benchmark, averaged US$33.90 per barrel in the first quarter of 2015, down from US$58.90 per barrel in the fourth quarter of 2014 and from US$75.54 year-over-year.

The price differential between Western Canada Select and West Texas Intermediate has narrowed by about US$8.40 since the first quarter of 2014. The WCS-WTI dollar differential averaged US$14.73 per barrel in the first quarter of 2015, offering some modest relief to Canadian producers.

“In the face of increased supply and limited storage capacity, a lacklustre Canadian dollar has offered some support to our oil producers. The differential between West Texas Intermediate and the Western Canadian Select blend has fallen almost $5 (Canadian) since the last Economic Outlook (Q1, 2015) and currently hovers slightly below $C 15 per barrel; this has somewhat cushioned the blow of lower prices.” 33

!15%%!12%%!9%% !6%% !3%% 0%% 3%% 6%% 9%%

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33 ATB Financial, Alberta Economic Outlook, Q2 2015,March 31, 2015, p.3.

26 THE ECONOMY

Benchmark Oil Prices (US$/Barrel) and WCS DifferentialQuarterly Average, Q1 2009 - Q1 2015

Source: Baytex Energy Corp, Historical Oil Pricing

The outlook for oil prices, as outlined in the Government of Alberta’s 2015 Budget34, is for WTI to average US$51.50 per barrel in 2015 and US$61.50 per barrel in 2016, gradually rising to just below US$83 per barrel by 2019. This represents a drastic downgrade from the Budget 2014 forecast of above US$90 per barrel for 2015-2016. The WTI-WCS differential is projected to widen to around US$23 per barrel by 2017-18 due to constraints in the pipeline network.35

Major Construction ProjectsAs of March 2015, there was an inventory of 250 major construction projects (a minimum estimated cost of $5 million) under construction in Alberta, valued at an estimated $71.6 billion. Oil sands projects accounted for 53 per cent of the value of the projects ($37.8 billion).

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34 Note: the 2015 budget did not pass through the legislature and is being changed by the new NDP government.

35 Government of Alberta, Budget 2015, Fiscal Plan 2015-20, Economic Outlook, p.58.

27 THE ECONOMY

Inventory of Alberta Major Projects Under Construction

Crude Oil ProductionAlberta produced 41.9 million cubic metres of crude oil in the final quarter of 2014, up 7.0 per cent from the fourth quarter of 2013. Production of crude bitumen (oil sands) was the main driver of growth, increasing 16.7 per cent year-over-year. Light and medium crude oil production also increased 2.5 per cent year-over-year, while heavy crude production declined 3.2 per cent and synthetic crude (upgraded bitumen) production was relatively unchanged (-0.3 per cent). In February 2015, year-to-date crude oil production in Alberta had risen 12 per cent compared to the first two months of 2014, with crude bitumen production up 21 per cent. Conventional oil production (light, medium and heavy oil) was down 0.8 per cent year-to-date February 2015, a result of reduced drilling activity.

“While conventional oil production will be impacted by lower prices in 2015, oil sands production will continue to expand. Projects nearing completion are expected to add over 500,000 barrels per day of production in the next three years, including Kearl Mine, Cold Lake, Foster Creek, Surmont and Christina Lake. Those already operating are not expected to shut-in production, as per barrel operating costs are below expected prices. Even in 2009, for example, production continued to grow steadily as prices fell below US$40/bbl. Projects that are well into construction, such as Fort Hills, are expected to proceed due to large amounts of sunk capital. Lower investment and project delays in 2015 and 2016, however, may affect production towards the end of the forecast horizon. If prices fall below forecast levels, some production may be at risk, particularly in 2019 and 2020.” 36

Project Sector# of

ProjectsValue of Projects

($millions)Oil Sands 11 $37,834.0Pipelines 13 $8,707.1Commercial / Retail 29 $6,140.0Infrastructure 46 $4,719.8Power 4 $3,745.0Institutional 39 $3,250.3Residential 59 $2,456.0Tourism / Recreation 34 $2,217.2Other Sectors 4 $1,112.9Oil and Gas 4 $885.0Commercial / Retail and Residential 6 $466.4Agriculture / Forestry and Related 1 $34.0Total 250 $71,567.7Source: Alberta Enterprise and Advanced Education, as of March 2015


36 Government of Alberta, Budget 2015, Fiscal Plan 2015 - 20, Economic Outlook, p.59.

28 THE ECONOMY

Alberta Crude Oil Production

Source: Statistics Canada: CANSIM Table 126-0001.

Active Drilling RigsThere was an average of 291 active drilling rigs in Alberta during the first quarter of 2015, down approximately 44 per cent from an average of 521 active rigs in the first quarter of 2014. The Canadian Association of Oilwell Drilling Contractors (CAODC) issued an updated drilling activity forecast in January 2015 to reflect the dramatic drop in oil prices since mid-2014. The CAODC projects the number of active drilling rigs to decline to an average of 203 in 2015, from an average of 370 in 2014, representing a 45 per cent decline.37

“The new reality of $55 oil means that the entire industry will hurt for a period, and drillers and service rig contractors are not immune to that,” said CAODC President, Mark Scholz. “We have been through rough patches before and come out strong on the other end, and I’m confident that we will do that again, but right now, that’s going to involve buckling in.” 38

With the assumption that each active drilling rig represents 135 jobs (20 direct jobs and 115 indirect jobs), the CAODC projects that decreased drilling activity in 2015 could result in the loss of approximately 3,400 direct jobs and 19,300 indirect jobs compared to 2014.39 During the 2008-2009 recession, job losses in the drilling sector were estimated at 19,440, based on 144 fewer rigs in 2009.40

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37 CAODC Forecast - 2015.

38 CAODC, Media Room, Oil Drillers Buckling In as Prices Decline,January 22, 2015.

39 CAODC Forecast - 2015.

40 Financial Post, Nearly 23,000 jobs linked to oil drilling industry to be slashed this year, group says, Geoffrey Morgan, January 22, 2015.

29 THE ECONOMY

Housing AffordabilityHousing 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. The higher the measure, the more difficult it is to afford a house. For example, a reading of 43 per cent means that homeownership costs would take up 43 per cent of a typical household’s monthly pre-tax income.41

Overall, housing affordability in Canada deteriorated slightly in the final quarter of 2014 (the most recent data). Nationally, the RBC HA Measure increased 0.1 percentage points to 42.7 per cent for detached bungalows and 0.2 percentage points to 48.1 per cent for two-storey homes. The measure for condos was unchanged at 27.4 per cent.

“Solid home price increases in Ontario were a main factor contributing to a slight erosion of housing affordability in Canada in the fourth quarter of 2014. Higher home prices in Ontario (mainly Toronto) across all categories, and in specific segments of other provincial markets (including British Columbia and Saskatchewan), boosted what the monthly costs of owning a home would be, at current market values, by more than household income rose last quarter. The effects of plunging oil prices on affordability were still modest and largely isolated to Calgary during the period in question; however, more substantial consequences (although still contained geographically) are likely to emerge in the coming quarters. Interest rates played a neutral role for affordability for the second straight quarter, as posted mortgage rates remained unchanged.” 42

Overall, housing affordability in Alberta improved in the fourth quarter of 2014. Alberta’s HA Measure for a detached bungalow declined 0.4 percentage points on the quarter to 32.4 per cent. Alberta had the second lowest measure among regions in Canada in the final quarter, behind the Atlantic region (30.1 per cent).

Affordability improved in Calgary in the final quarter of 2014, but deteriorated slightly in Edmonton. Calgary’s measure for a detached bungalow fell 0.6 percentage points to 33.7 per cent while Edmonton’s measure increased 0.1 percentage points to 33.5 per cent. Affordability measures for bungalows in Calgary and Edmonton were the lowest among major metropolitan areas in Canada in the fourth quarter, and were significantly lower than Vancouver’s bungalow affordability measure of 82.4 per cent.


41 RBC Economics, Housing Trends and Affordability, March 2015.

42 Ibid, p.1.

30 THE ECONOMY

“Housing affordability improved for the second time in the past three quarters in the Calgary area in the fourth quarter; however, this development received little consideration from homebuyers who exited the market en masse by December (and continued to do so in January). [...] In these circumstances, demand-supply conditions swung swiftly in favour of buyers and set the stage for some weakening in prices in the area.” 43

Retail SalesAfter falling for four consecutive months, retail sales in Alberta rose over the final two months of the first quarter of 2015. Retail sales in Alberta totaled $6.41 billion in March 2015, up 1.1 per cent from the previous month.

“Retail sales are one of the best barometers of the overall health of the economy. When oil prices started to slide in October of last year, economic pessimism gripped the province. By early in 2015, when West Texas Intermediate oil hit a low of $US 43 per barrel, consumer confidence had been shaken. That had an almost immediate effect in retail sales, which fell nearly six per cent between September and January. But since then, consumer confidence appears to be rebuilding somewhat. Two months of data does not make a trend—and certainly overall sales remain lower than their peak last fall. But cautious optimism may be taking root that 2015 will not be the economic catastrophe some commentators were predicting. It’s looking less like the recession of the century, and more like a garden-variety downturn.” 44

On an annual basis, retail sales were down 1.7 per cent in March 2015. Sales at gasoline stations in Alberta fell over 22 per cent, mainly as a result of lower prices. The retail categories that posted the highest annual sales growth in March included miscellaneous store retailers (+12.6 per cent) and building materials and garden equipment stores (+11.7 per cent).

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43 RBC Economics, Housing Trends and Affordability, March 2015.

44 ATB Financial, The Owl, Retail sales shaking off the economic blues, May 22, 2015.

31 THE ECONOMY

Year-over-Year Change in Retail Spending Categories, AlbertaMarch 2015


Alberta led the nation with estimated retail sales growth of 7.7 per cent in 2014. Retail sales in Alberta rose to $78.7 billion in 2014, from $73.1 billion in 2013. Retail sales in Alberta are forecast to decline by 1.9 per cent in 2015 to $77.2 billion,45 as lower oil prices weigh on incomes and act as a headwind to consumer spending.

PopulationAccording to the most recent estimates from Statistics Canada, Alberta’s population increased by 14,050 in the final quarter of 2014 to an estimated 4,160,000. The quarterly population change represented an increase of 0.34 per cent, well below 0.51 per cent growth in the final quarter of 2013. Still, Alberta’s rate of population growth was the highest in the country for the sixteenth consecutive quarter, and was more than four times the national average of 0.08 per cent.

Migration continued to add to Alberta’s population in the fourth quarter of 2014, but at a much slower pace than the previous year. The province welcomed 6,530 net migrants during the final quarter - 4,178 from other parts of Canada and 2,352 from other parts of the world. Net migration had exceeded 14,000 in the fourth quarter of 2013.

ATB Financial is forecasting that Alberta will see fewer net migrants in 2015.“...migration to Alberta is likely to continue to slow—both from other parts of the country and internationally. The energy sector slowdown will result in fewer new job openings. As well, better economic results in Ontario and Quebec in 2015 will discourage as much migration from those provinces to the Prairies. Total net in-migration is likely to fall from

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32 THE ECONOMY

over 75,000 in 2014 to closer to 40,000 in 2015, with the most significant drop coming from fewer interprovincial migrants.” 46

Interprovincial migration (4,178) accounted for about 30 per cent of Alberta’s population growth in the fourth quarter of 2014. Most of the migrants arrived from Ontario (+2,768), Quebec (+625) and Nova Scotia (+459).

Net international migration totaled 2,353 in the fourth quarter of 2014, accounting for 18 per cent of the province’s population growth. A record number of new permanent residents was offset by a significant outflow of non-permanent residents (NPRs).

“The province settled 9,180 new permanent residents, a record number for the fourth quarter. However, this strong inflow of immigrants was tempered by a net outflow of NPRs (-5,488), the largest outflow since the fourth quarter of 2010. In the past few years, strong inflows of net NPRs have helped to boost Alberta’s population growth, but this component can be variable. The outflows seen this quarter have weighed on international migration and slowed population growth.” 47

Alberta led all provinces with a natural growth rate of 0.18 per cent in the final quarter of 2014. Natural increase (births minus deaths) totaled 7,522 in the quarter, the result of 13,534 births and 6,012 deaths.

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46 ATB Financial, Alberta Economic Outlook, Q2 2015, March 31, 2015, p.8.

47 Alberta Treasury Board and Finance, Quarterly Population Report, Fourth Quarter 2014, p.2.

33 THE ECONOMY

Alberta recorded the highest annual population growth rate among provinces for the ninth consecutive quarter in the final quarter of 2014. The rate of 2.5 per cent was two and a half times the national growth rate of 1.0 per cent. Saskatchewan had the second highest annual population growth rate of 1.6 per cent, and Manitoba placed third with a growth rate of 1.3 per cent. Year-over-year, the populations of Newfoundland and Labrador and New Brunswick decreased by 0.4 per cent and 0.1 per cent respectively.

Alberta’s population growth is expected to moderate to 2.0 per cent in 2015 and 1.7 per cent in 2016.48

Canadian EconomyThis section on the Canadian Economy includes a discussion of: Economic Growth, Inflation, Trade, Housing, Monetary Policy and Oil.

Economic GrowthFollowing solid real GDP growth of about 2.4 per cent (annualized) in the fourth quarter of 2014, economic growth in the Canadian economy slowed to a crawl through much of the first quarter of 2015. As many forecasters had anticipated, the negative impacts of the collapse in oil prices were most acute in early 2015. Further, an examination of the components of growth in late 2014 suggested that economic conditions were fragile, even in the absence of an oil shock.

“…a closer look reveals that [fourth quarter 2014] growth came almost entirely from a buildup in inventories, which points to slackening future production. The quarter also saw a modest decline in business investment. As oil companies had only just begun to pare their capital budgets, we expect significantly larger declines through the first half of 2015. Add in weaker consumer spending and still high levels of fiscal restraint, and we expect economic growth to weaken to an underwhelming 1.9 per cent in 2015, down from a more average (by historical standards) 2.4 per cent last year.” 49

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48 Government of Alberta, Budget 2015, Fiscal Plan 2015 - 20, Economic Outlook, p.65.

49 Conference Board of Canada, Economic Forecast – Canadian Outlook Spring 2015, April 28, 2015.

34 THE ECONOMY

Initial estimates placed annualized first quarter real GDP growth at near-zero in 2015.50 However, fueled by a strengthening U.S. economy, a depreciated Canadian dollar, and a gradual recovery in oil prices, the Canadian economy is expected to post real growth of around 2.0 per cent in 2015.

In February 2015, growth was supported by service industries, where output increased by 0.1 per cent on the month.51 Sub-industries posting relatively high growth included retail trade (+1.5 per cent), finance and insurance (+0.7 per cent) and the public sector (+0.2 per cent).

Conversely, goods-producing industries as a whole posted a 0.2 per cent output contraction on the month. The weakest sub-industries in this group included manufacturing (-0.8 per cent) and mining, quarrying and oil and gas extraction (-0.6 per cent). Support activities for mining, quarrying and oil and gas extraction posted a decline of 15.4 per cent in February, its third consecutive monthly drop. Output in this industry was down by more than 30 per cent from its high in April 2014.52

Monthly Change in Real Output Across Canadian IndustriesDecember 2014 to February 2015

Source: BMO Economics, EconoFACTS: Cdn GDP: Flat is the New Up, April 30, 2015.

The relatively poor performance of the Canadian economy in the first quarter of 2015 was not entirely unexpected, as the impact of the oil price shock had already been incorporated into growth forecasts. As well, a very weak start to the year in the U.S. economy (+0.2 per cent) likely reduced demand for Canadian manufactured goods, despite the supportive level of the Canadian dollar.53 Overall, the composition of growth suggested that the oil price shock had not (yet) spread to the non-commodity,


50 Scotia Economics, Flash: Canadian Growth Flatlines In February, April 30, 2015.

51 TD Economics, Data Release: Canadian GDP fails to move in February, April 30, 2015.

52 Scotia Economics, Flash: Canadian Growth Flatlines In February, April 30, 2015.

53 TD Economics, Data Release: Canadian GDP fails to move in February, April 30, 2015.

35 THE ECONOMY

non-manufacturing side of the economy. These sectors, as well as business investment in general, are expected to struggle through the second quarter of 2015.54 However, forecasters did not generally view the poor first quarter result as a signal of a weakening Canadian economy.

“The winter months were no treat for Canada’s economy, but it now looks like GDP managed to hold roughly steady through a rough patch for oil & gas and the auto sectors — arguably the two most important industries in the country. Given the U.S. economy also stumbled out of the gate in 2015, a flat growth profile in Q1 is far from a horrendous/foul/shocking/troublesome/vexatious or entirely disagreeable outcome.” 55

InflationConsumer price growth as reflected by the all-items Consumer Price Index (CPI) picked up in March 2015 to 1.2 per cent year-over-year, from about 1.0 per cent in both January and February – its lowest reading since October 2013. The primary cause of persistently low price growth has been gasoline and energy prices, which recovered somewhat in February and March but remained approximately 20 per cent and 10 per cent below year ago levels respectively.

More notably, Core CPI (which excludes many of the most volatile components of the standard index) increased above expectations to 2.4 per cent, matching its fastest pace since 2007. Price growth was broad based across a variety of categories in March, and was partially attributable to the depreciated dollar making imports relatively more costly for Canadians.

“The Canadian dollar made its mark big time, as there were rampant signs of currency pass-through scattered across this release. To wit, sports equipment shot up almost 11% in March alone, one of the biggest monthly moves on record. Clothing prices jumped 3.5% y/y. Travel services are up 5.6% y/y. Car prices were up 2.3% in the month (and 1.6% y/y). Meantime, meat prices, which have been a steady source of upward pressure on core, just keep chugging, up 0.5% m/m and 11.8% y/y.” 56

The inflation report in March generally suggested that the period of slow price growth observed throughout much of 2012 to 2014 had come to an end, as Core CPI has increased at a rate above 2.0 per cent (the mid-point of the Bank of Canada’s target range) since August 2014.


54 Conference Board of Canada, Economic Forecast – Canadian Outlook Spring 2015, April 28, 2015.

55 BMO Economics, EconoFACTS: Cdn GDP: Flat is the New Up, April 30, 2015.

56 BMO Economics, EconoFACTS: CPI: The Force is with Core, April 17, 2015.

36 THE ECONOMY

Year-over-Year Percentage Change in CPI and Core CPIJanuary 2012 to March 2015

Source: Statistics Canada, CANSIM Table 326-0020

The inflation outlook is mixed. Although gasoline and energy prices have crept up since February, the Canadian dollar has appreciated relative to its March average, which should provide some relief in terms of import prices.

The impact of the oil price slide heavily influenced March’s CPI. Regionally, prices in Alberta were down 0.1 per cent from year-ago levels, joining Prince Edward Island as the only provinces posting negative inflation. Ontario led the country in overall price growth at 1.6 per cent, with Quebec close behind at 1.5 per cent.

TradeCanada’s merchandise trade deficit widened to about $3.0 billion in March of 2015 from $2.2 billion in February. While monthly growth in the volume of imports did outpace that of exports, the substantial deterioration was also attributable to price effects.

“Nominal exports rose by 0.4%, but mostly due to a -1.5% drop in export prices as export volumes grew by 1.9%. Nominal imports were higher by 2.2%, in part inflated by a 0.6% increase in import prices, but import volumes still rose a solid 1.5%.” 57

In March, broad import strength was observed as volumes were up in seven of the 11 major categories of goods, with notable increases in consumer goods (+7.9 per cent) and motor vehicles and parts (+3.7 per cent).58


57 Scotia Economics, Flash: Canadian Trade Deficit Widens Further But Details Are Encouraging, May 5, 2015.

58 TD Economics, Data Release: Goods trade deficit widened in March, May 5, 2015.

37 THE ECONOMY

Conversely, energy exports fell 8.9 per cent in March, led by a 30 per cent drop in refined petroleum energy products and a 16.2 per cent decline in natural gas exports.59

Excluding energy, exports looked much stronger and grew by 2.4 per cent in March, led by a surge in autos (+11.7 per cent). Following the drop in oil prices, it has become increasingly important for Canada to rely on non-energy exports and a solid U.S. recovery to offset weaker domestic energy activity. While Canada’s trade surplus with the U.S. widened to $2.2 billion in March, the improvement was driven by a 1.7 per cent decline in imports outpacing a 0.9 per cent drop in exports. Canada’s trade deficit with countries other than the U.S. widened to $5.2 billion in March 2015 from $4.2 billion in February.60

Canada's Merchandise Trade Balance, Seasonally AdjustedJanuary 2008 to March 2015

Source: Statistics Canada, CANSIM Table 228-0069

Overall, exports declined by 3.0 per cent in the first quarter of 2015, while imports were up 0.6 per cent during the same period. Forecasters expect trade to positively contribute to Canada’s GDP through the remainder of 2015 due to the depreciated Canadian dollar, strengthening U.S. economy, a gradual recovery in oil prices.

HousingCanadian housing starts rebounded ahead of expectations to 189,700 units in March 2015 from February’s 151,200 units. Starts in February were the lowest outside of a recession in more than 13 years – primarily the result of poor weather conditions in Ontario, Quebec and Atlantic Canada.61


59 Scotia Economics, Flash: Canadian Trade Deficit Widens Further But Details Are Encouraging, May 5, 2015.

60 TD Economics, Data Release: Goods trade deficit widened in March, May 5, 2015.

61 BMO Economics, EconoFACTS: Cdn Homebuilding Thaws in March, April 10, 2015.

38 THE ECONOMY

However, forecasters suggest that homebuilding activity remains stable and in-line with fundamentals, with volatility primarily driven by the multiple-unit segment of the market.

“Recent volatility aside, housing starts averaged 176k units for all of Q1, down slightly from 184k in Q4. And, over the past twelve months, starts ran at an average pace of 188.8k units, roughly in-line with demographic demand.” 62

Annualized Single-Detached and Multiple Unit Housing StartsCanada, Monthly, January 2014 to March 2015

Source: Canada Mortgage and Housing Corporation (CMHC)

The oil price shock has yet to reveal itself in housing starts data. In fact, building activity in Alberta was still nearing the highs of 2006-07 in March of this year. However, starts in oil-producing provinces are expected to head lower through the remainder of the year.

Existing home sales in Canada were also up in March by 4.1 per cent on a seasonally adjusted basis (+9.5 per cent year-over-year).63 Home purchasing activity demonstrated broad strength throughout most of the country on the month.

“The drop in mortgage rates and less-harsh weather appears to have stoked buyers in the month, with sales rising in 22 of 26 major cities (21 of 26 are up from a year ago). That helped tighten the overall market balance, with the months’ supply of homes edging down two ticks to 6.1, while the sales-to-new listings ratio rose for a second straight month.” 64


62 Ibid.

63 BMO Economics, EconoFACTS: Cdn Housing: Booster Shot, April 15, 2015.

64 Ibid.

39 THE ECONOMY

However, the oil price shock and its impact on the economy were evident in the housing markets of Calgary and Edmonton, where existing home sales dropped by 30.1 and 6.1 per cent year-over-year, respectively. Similarly, existing home price growth in Calgary (-1.2 per cent) and Edmonton (+3.5 per cent) were significantly below the national average of 9.4 per cent.

Monetary PolicyIn January 2015, the Bank of Canada became the first G7 central bank to ease monetary policy in response to the slump in oil prices when it surprised forecasters and cut its key interest rate to 0.75 per cent from 1.00 per cent.65 Bank Governor Poloz referred to the cut as “insurance” against the impact of the downturn, and argued that it would be enough to support the Canadian economy through its anticipated recovery.

Since implementing the rate cut, Governor Poloz has adopted a more optimistic view, and in April stated, “We know a lot more today than we knew in January. Our biggest risk I think today is the U.S. economy will prove to be quite a bit stronger than most of us are assuming.” 66 He also stated that the anticipated interest rate increases in the U.S. later in 2015 would prove to be positive for Canada’s economy, as they would signal a stronger U.S. economy leading to beneficial spillover effects. Further, the Bank of Canada indicated that it perceived the worst of the oil shock’s impact to be over in the Canadian economy, noting improvements ranging from early signs of labour market strength to gains in the non-energy exporting sector.67

While some forecasters had anticipated another interest rate cut, in April the Bank of Canada held its rate unchanged.68 While acknowledging a stagnant rate of GDP growth in the first quarter of 2015, the Bank also upwardly revised its quarterly growth projections for the remainder of the year.

OilBank of Canada Governor Poloz has suggested that the negative economic effects related to the recent plunge in oil prices will dissipate into the second quarter of 2015 and be virtually non-existent by the second half of the year.69 This optimism was reflected in the Bank of Canada’s most recent quarterly GDP projections, which suggested a relatively quick rebound from the stagnant growth observed in the first quarter of 2015 to a trend rate of growth above 2.0 per cent by the second half of the year.70 Other forecasters have pointed out that consensus private sector growth projections are typically significantly lower than those of the Bank of Canada.


65 Financial Post, Stephen Poloz just quashed any hope of another Bank of Canada rate cut, April 20, 2015.

66 Ibid.

67 Bank of Canada, Monetary Policy Report, April 2015.

68 BMO Economics, EconoFACTS: Banking On A Spring Rebound, April 15, 2015.

69 Scotia Economics, Special Report: The BoC Has History On Its Side, But The Future Is Uncertain, April 24, 2015.

70 Bank of Canada, Monetary Policy Report, April 2015.

40 THE ECONOMY

The chart below presents real annualized quarterly GDP growth rates in Canada during periods of negative WTI oil price shocks, from two quarters prior to the WTI price low through one year following the price low. Actual and forecasted GDP growth during the current oil shock (as predicted by the Bank of Canada) is presented with the solid black line, with the correlated WTI low representing the first quarter of 2015.

Canadian Annualized Quarterly GDP Growth During WTI Oil Price Shocks, Six Months Prior to Price Low to 12 Months Following Price Low

Source: Statistics Canada, CANSIM Table 380-0064, Bank of Canada Monetary Policy Report April 2015

While each scenario shown reflects a unique set of economic circumstances and are not perfectly comparable, the chart suggests that the Bank of Canada’s forecasts are in line with Canadian economic performance during past bouts with low oil prices. Further, the current oil shock is supported by a period of currency depreciation that should aid growth potential through trade channels. While the plunge in oil prices has certainly dampened the economic outlook across a number of indicators (particularly in oil rich provinces such as Alberta), sectors such as the labour market have yet to post a substantial decline on a national level.

“[Canada has] gained 143,000 jobs since oil prices peaked last summer for a total employment gain of over 1%. Seasonally adjusted employment levels are at a record high. The labour force participation rate has been unchanged over this period, and the unemployment rate has dropped by a couple of tenths. Total hours worked have risen by almost 1% even though they dipped a touch in March.” 71

Nevertheless, the Canadian economy now faces several headwinds to growth that were less prevalent in the past, including record high levels of household indebtedness as well as a much greater reliance on the energy sector to support growth in trade and capital expenditure.


71 Scotia Economics, Global Views, May 1, 2015.

41 THE ECONOMY

“While history is on the BoC’s side in forecasting a fairly rapid rebound into the second half of this year and beyond, there are enough differences between today and those past shocks that may justify a more conservative posture toward the risks facing the outlook.” 72

Global/U.S. EconomyThis section on the Global/U.S. Economy includes a discussion of: Global Economic Growth, Forecast Risks, U.S. Economic Growth, Consumer Spending, Trade, Housing and Oil.

Global Economic GrowthGlobal growth disappointed in 2014, coming in at 3.4 per cent. So far in 2015, the outlook has been characterized by a weak start across many advanced economies due in part to a winter-related slowdown in the U.S. economy, ongoing quantitative easing programs in the Euro Area and Japan with mixed success, and inconsistent performances in emerging markets brought on by heightened currency volatility and capital outflow.

As the U.S. economy achieves better traction through the remainder of 2015 and into 2016, advanced economies are projected to take the reins as the primary driver of global growth. World GDP growth is expected to average a slightly better 3.5 per cent in 2015 before improving to 3.8 per cent in 2016.73

Annual Real GDP Growth Rates, Actual and Forecasted2014 to 2016 Advanced Economies

Source: IMF, World Economic Outlook, April 2015.

Despite a soft, partially weather-related GDP report in the first quarter of the year, an improved outlook for global growth in 2015 will likely be driven by the U.S. economy. American consumers and their


72 Scotia Economics, Special Report: The BoC Has History On Its Side, But The Future Is Uncertain, April 24, 2015.

73 International Monetary Fund, World Economic Outlook, April 2015.

42 THE ECONOMY

high propensity to import are expected to provide a much-needed lift to other advanced economies as well as the rest of the world.

“The acceleration in job growth is the fastest in 15 years, and small and medium sized businesses are increasingly expecting to raise wages. Meanwhile, inflation has fallen due to the decline in energy prices and a sky rocketing U.S. dollar. The result of a buoyant job market and falling consumer inflation is robust gains in real disposable income. This bodes well for strengthening consumer spending. Despite the anticipated drag from international trade, the acceleration in domestic spending will fuel a rise in overall economic growth.” 74

In the Euro Area, the relatively successful implementation of stimulus measures along with low levels of inflation and cheaper gasoline prices led to improved real wage growth during early 2015, strengthening domestic demand across many of the net oil-importing economies.75 As well, the aggregate Euro Area trade balance climbed to a high of more than €22 billion in early 2015, and has exhibited consistent improvement since reaching a low of -€10 billion in 2008. However, there is some concern as to whether demand can be sustained as gasoline prices and inflation gradually recover, with nominal wage growth still at a 15-year low. Further, the heightened trade balance is primarily a result of weak imports, as the growth outlook for exports has dampened following the economic slowdown in China.

Advanced economies as a group are expected to drive much of global growth over the near-term horizon. Following a modest increase of 1.8 per cent in 2014, real GDP growth in advanced economies is expected to increase to 2.4 per cent in 2015 and 2016.76

Economic growth across emerging market economies (EMEs) has generally decelerated since 2013, after an initial strong recovery following the financial crisis of 2008-09. Net-exporting economies such as Russia and Venezuela have been strongly affected by the drop in commodity prices; cyclical downturns and structural issues have restrained growth in Argentina, Malaysia and Brazil; and in the first quarter of 2015 China posted its lowest rate of growth since early 2009.77

While EMEs will continue to account for more than 70 per cent of GDP growth in 2015, overall growth in these economies is forecast to continue to decelerate. One of the primary factors expected to restrain growth in 2015 is a projected move on part of the U.S. Federal Reserve to raise its interest rate later this year in response to strengthened economic conditions. Higher interest rates in the U.S. can cause capital outflow in EMEs as investors seek higher returns in relatively safer U.S. markets. In addition, the currency devaluation already occurring across many EMEs, while making exports more globally competitive, may be met with insufficient levels of global demand.


74 TD Economics, Quarterly Economic Report: Global Outlook, March 24, 2015.

75 Conference Board, European View, April 29, 2015.


77 Conference Board, Emerging Markets View, April 2015.

43 THE ECONOMY

“Compared to the first half of 2014, emerging markets’ currencies, as a whole, have lost more than 20 percent of their aggregated value against the US dollar. A weaker currency may help improve a country’s export price competitiveness. However, with slower global trade growth due to persistently weak global demand, it is unlikely that cheaper export prices will result in a significant and sustainable boost to economic growth.” 78

After posting 4.6 per cent real GDP growth in 2014, EMEs as a group are expected to slow to 4.3 per cent growth in 2015 before recovering to 4.7 per cent by 2016 as headwinds fade and stronger global economic momentum takes hold.79

Forecast RisksOne of the major risks to materialize in the global economy over the past two quarters was the plunge in oil prices that began in the second half of 2014. The decline represents an upside risk to most oil importing economies (and the global economy in general) as consumers benefit from cheaper gasoline prices and importers from lower global energy prices.

However, the drop in oil prices poses a serious downside risk to oil exporting countries (such as Canada) where trade balances deteriorate, investment in the oil and gas (and support) sector declines, and corporate profits drop. The ongoing oil price collapse is primarily the result of supply factors, including a rapid increase in unconventional shale production in the U.S. over the past few years coupled with the Organization of the Petroleum Exporting Countries (OPEC) refusing to cut its production levels. Nevertheless, a sustained recovery in the price of oil is highly dependent on global demand, which in turn is strongly correlated with global economic performance. The U.S. Energy Information Administration expects world oil demand to grow at a trend rate of slightly above 1.0 per cent annually over the next five years as global GDP growth stabilizes – a rate that is likely insufficient to induce a similarly rapid price increase but should be enough to support a long-term recovery (assuming supply-side issues are gradually resolved).


78 Ibid.


44 THE ECONOMY

World GDP and World Oil Demand Growth RatesActual and Forecasted, 2006 to 2020

Source: U.S. Energy Information Administration, Oil and Natural Gas Supply and Demand Trends in North America and Beyond, April 7, 2015.

U.S. Economic GrowthFollowing a moderate real GDP report of 2.2 per cent (annualized) growth in the fourth quarter of 2014 to close the year at an average of 2.4 per cent, momentum faltered in the first quarter of 2015 and the U.S. economy expanded by just 0.2 per cent.80 The first quarter’s estimate disappointed expectations for growth of 1.0 per cent.

Growth in the first quarter was driven by personal consumption expenditures, which increased slightly ahead of expectations at 1.9 per cent.81 However, despite a 6.2 per cent increase in real disposable income, consumer spending was down markedly from the fourth quarter of 2014 when it grew by 4.4 per cent. Inventory investment also contributed about three-quarters of a percentage point to growth on the quarter following two consecutive quarters of modest decline.

In the first quarter, sectors exhibiting weakness in the U.S. economy included business fixed investment (-3.4 per cent), where the decline was primarily the result of plummeting investment in oil and gas drilling activity.82 Government spending also fell by 0.6 per cent – the second consecutive quarterly decline. Trade was a major impairment to the U.S. economy in the first quarter, subtracting 1.25 percentage points from growth due to a 7.2 percent reduction in exports coupled with a 1.8 per cent increase in imports.


80 Bureau of Economic Analysis, Current-Dollar and “Real” Gross Domestic Product, April 29, 2015.

81 Scotia Economics, US Q1 GDP Disappoints, Should Add To Caution At FOMC, April 29, 2015.

82 TD Economics, Data Release: Another weak first quarter for the American economy, April 29, 2015.

45 THE ECONOMY

Contribution to Percent Change in Real GDP (Annualized)U.S, Q1 2015

Source: Bureau of Economic Analysis, Gross Domestic Product: First Quarter 2015 (Advance Estimate)

Despite the soft reading in the first quarter, the strong performance of the U.S. economy through most of 2014 was still enough to push year-over-year real GDP growth to about 3.0 per cent. Average GDP growth is trending at around 2.5 to 3.0 per cent in the U.S. economy, a rate at which forecasters believe is adequate to support the ongoing global economic recovery and domestic labour market rebound. Further, some of the factors that acted to restrain economic growth during the first quarter are expected to recede through the remainder of the year.

“The downturn in economic growth reflects a number of factors, some fleeting and others more lasting. On the temporary front, poor weather and West coast port disruptions contributed to the weakness. Another relatively fleeting factor is the fall in oil and gas investment. Reduced drilling activity will likely continue to subtract from growth in the second quarter, but not nearly to the same degree as the first. More lasting is the impact of the rising dollar, which will continue to weigh on net-exports in the quarters ahead.” 83

Consumer SpendingAfter fourth months of consecutive decline, consumer expenditure in the U.S. saw some pickup at the end of the first quarter as retail sales increased by 1.1 per cent on the month. While most goods sectors posted gains in March, the increase was primarily driven by stronger auto sales (+2.9 per cent month-over-month) and building materials (+2.3 per cent).84 Core retail sales (which excludes autos, gas and building materials) rose 0.5 per cent on the month, the first positive report since November 2014.

Unfortunately, the pickup in spending may not have been sustained, as preliminary data for April 2015 suggested that overall U.S. retail spending growth was flat on the month. Given the improvements to


83 Ibid.

84 BMO Economics, EconoFACTS: U.S. Retail Sales….A Flicker of Light, April 14, 2015.

46 THE ECONOMY

both consumer confidence and real disposable income (up approximately 2.5 per cent since September 2014)85 in the first quarter, this was an unexpected result. A 0.4 per cent drop in auto purchases on the month was particularly disappointing. While retail sales reports are often revised, do not take price variability into account, and do not include spending on services (which comprises about two-thirds of consumer spending), April’s report did not bode well for an anticipated economic rebound heading into the second quarter of 2015.

“For the purposes of 2nd quarter growth, this does not start Q2 off on a strong footing. Sales excluding autos, gas stations and building materials were also flat in April, after 0.5% gain in March. This poses downside risk for consumer spending in the quarter.” 86

TradeIn March 2015, the U.S. international trade deficit widened substantially to $51.4 billion, from $35.4 billion in February and an average of $42.1 billion in 2014.87 The primary cause of the deficit increase was a large surge in imports following the end of a strike at West Coast ports. Controlling for the impact of prices, exports managed a moderate increase on the month (+1.1 per cent) but was vastly outpaced by a 10.3 per cent rise in imports.

While the climbing trade deficit dragged on growth (and may bring about a revision to negative levels to first quarter U.S. GDP), the increase in trading activity was viewed as a positive sign among some forecasters. First, despite the appreciation of the U.S. dollar, real exports increased after four consecutive months of contraction. Second, the strong rate of import growth could signal a strengthening economy, which would provide a boost to major trading partners such as Canada.

“…stronger imports aren’t per se a bad thing — they are a sign of a robust economy. Imports of cars were higher by 10.2% m/m, consumer goods by 20% m/m, and capital goods by 8.3% m/m.” 88


85 Scotia Economics, Flash: US Savings Rate Slips, April 30, 2015.

86 BMO Economics, EconoFACTS: U.S. Retailers Continue To Wonder When Spring Is Coming, May 13, 2015.

87 TD Economics, Data Release: Another huge swing in the trade deficit, now at its largest since October 2008, May 5, 2015.

88 Scotia Economics, Flash: US Imports Surge On End To Port Strike, May 5, 2015.

47 THE ECONOMY

U.S. Exports, Imports and Monthly Percentage Change in Trade BalanceSeasonally Adjusted, 2012 to 2015

Source: U.S. Census Bureau, International Trade in Goods and Services

March also saw U.S. crude petroleum import volumes increase by a substantial 17.9 per cent as refineries took advantage of the lowest average price per barrel since the crisis (USD46.50/barrel).89 Whether the increase in oil imports was purely a temporary result of low prices, a reflection of improving demand, or a combination of both has yet to be revealed.

HousingThe pace of housing activity in the U.S. in the first months of 2015 was slow, but demonstrated some improvement at the end of the first quarter. Housing starts increased to 926,000 units (annualized) in March, up 2.0 per cent from February’s weather-related low.90 Further, all of the monthly growth was driven by the single-family component, which makes up about two-thirds of total starts and is typically far less volatile than the multi-family component. However, the modest recovery in March was not enough to compensate for losses in prior months, and total starts in the first quarter were down 2.5 per cent year-over-year.

The number of building permits issued declined 5.7 per cent in March to 1.039 million (annualized).91 However, permits for the more important single-unit category increased on the month. Further, this was the first monthly decline in total permits issued since October 2014, and the current level being well above the number of housing starts points to stronger homebuilding activity in the coming months.

New home sales in the U.S. dropped a substantial 11.4 per cent to 481,000 units (annualized) in March. However, the decline followed three consecutive monthly gains, and in February new home sales


89 Ibid.

90 BMO Economics, EconoFACTS: U.S. Housing: Finding It Difficult to be Started Up?, April 16, 2015.

91 Ibid.

48 THE ECONOMY

reached a seven-year high.92 As well, growth in existing home sales (+6.1 per cent) was strong enough to increase total home sales by 4.4 per cent in March, as new home sales generally comprise just 7.0 to 8.0 per cent of the total.93 The increased number of new mortgage applications, soft price growth, rising number of first-time buyers, and persistently low borrowing costs suggests that the U.S. housing market should heat up later in the year.94

OilWhile the fall in oil prices is overall positive for the U.S. economy, investment in oil and gas drilling, which has grown substantially over the past several years, will decline sharply during the first half of 2015 and likely subtract about 0.5 percentage points from growth.95 Historically, drilling investment has lagged oil prices by about six months. As oil prices began to decline in the third quarter of 2014, the investment impact was anticipated during the first quarter of 2015. This was supported by a significant downward trend in the active oil rig count in the U.S. beginning early in the year, which is expected to continue through 2015.

U.S. Active Oil and Natural Gas Rig Count, Weekly, 2005 to 2015

Source: Baker Hughes, North America Rotary Rig Count

“The benefit to consumers from lower oil prices will outweigh the damage to producers. However, the timing of the two will not necessarily align. … Drilling investment will drag on economic growth through the remainder of this year, albeit at a diminishing rate. Over time


92 BMO Economics, EconoFACTS: U.S. New Home Sales Cool Off, April 23, 2015.

93 Scotia Economics, Flash: US New Home Sales Swing Backward, April 23, 2015.

94 BMO Economics, EconoFACTS: More First-Timers Step Up To Buy A Home, April 22, 2015.

95 TD Economics, Falling Oil & Gas Investment to Weigh Sharply on Near-Term U.S. Growth, April 2, 2015.

49 THE ECONOMY

this will be offset by greater household and business spending, but not without a few bumps in the road.” 96

During the first quarter of 2015, a political development that will hold important ramifications for Alberta’s struggling oil sector was U.S. President Obama’s veto of a bill that would have approved the Keystone XL pipeline, and the successive failure of the U.S. Senate to override that veto.

“The $8 billion, 1,800-kilometre pipeline, proposed by the TransCanada Corporation, would bring 800,000 barrels of Canadian oil to refineries on the U.S. Gulf Coast every day. It is proving to be one of the major political footballs of the year leading up to the 2016 presidential election, when there will be someone new elected to the White House.” 97

Proponents of the pipeline suggest that it will create jobs, allow Canadian producers better access to U.S. refineries, and bolster U.S. energy self-sufficiency. However, opponents cite environmental concerns, and President Obama remained unconvinced as to whether the project was in the national interest.

An ongoing review by the U.S. State Department continues to weigh the economic and environmental impacts of the proposed pipeline. Further, President Obama’s veto does not mean the end of the debate, as congressional Republicans have pledged to attach a Keystone provision to future bills in an effort to reach a compromise.98


96 Ibid.

97 CBC News, U.S. Senate fails to override Obama’s Keystone XL veto, March 4, 2015.

98 USA Today, Obama: Keystone pipeline bill ‘has earned my veto’, February 25, 2015.

50 THE ECONOMY

Labour Market Review

Calgary Census Metropolitan Area (CMA)This section on the Calgary CMA Labour Market includes a discussion of: Employment and Unemployment.

EmploymentEmployment in the Calgary CMA continued to increase throughout the first quarter of 2015, with March marking the eleventh consecutive month of net job growth. Overall, employment in the Calgary CMA rose by 11,700 or 1.5 per cent on a quarterly basis in the first quarter of the year, following a gain of 6,700 new jobs in the final quarter of 2014.

“...Calgary’s strong annual employment growth and decent quarter-over-quarter gains suggest that despite high profile staffing cuts at energy firms based in the city, the region’s overall labour market has not yet slowed down significantly. Nonetheless, Calgary’s rate of employment growth is widely expected to decrease over the coming year.” 99

Employment growth in the Calgary CMA is forecast to moderate to 0.9 per cent in 2015, translating into approximately 7,000 net new jobs. In 2016, employment in Calgary is projected to increase by 15,000 or 1.9 per cent.100

Labour Force Statistics - Calgary CMA

Calgary CMA Jan-15 Feb-15 Mar-15

Population 1,163,400 1,166,100 1,168,700Labour Force 855,900 860,600 865,300

Employed 815,800 817,900 819,900Unemployed 40,100 42,700 45,400

Participation Rate 73.6% 73.8% 74.0%Employment Rate 70.1% 70.1% 70.2%Unemployment Rate 4.7% 5.0% 5.2%Source: Statistics Canada, CANSIM Table 282-0135, Labour Force Survey, 3-month moving average, seasonally adjusted

Q1 2015 Q4 2014Quarterly Change Q1 2014

Annual Change

1,166,100 1,158,200 7,900 1,127,700 38,400860,600 846,700 13,900 832,200 28,400817,900 806,200 11,700 791,600 26,30042,700 40,400 2,300 40,600 2,10073.8% 73.1% 0.7% 73.8% 0.0%70.1% 69.6% 0.5% 70.2% -0.1%5.0% 4.8% 0.2% 4.9% 0.1%

Source: Statistics Canada, CANSIM Table 282-0135, Labour Force Survey, 3-month moving average, seasonally adjusted


99 Employment and Social Development Canada, Labour Market Bulletin - Alberta: March 2015 (Quarterly Edition).

100 Conference Board of Canada, Metropolitan Outlook1, Winter 2015.

LABOUR MARKET REVIEWThis section examines labour market information for the Calgary Region, Alberta and Canada.

51

On an annual basis, employment in the Calgary CMA rose by 26,300 or 3.3 per cent in the first quarter of 2015. The most significant year-over-year employment gains were in transportation and warehousing (+15,500), health care and social assistance (+9,800), trade (+3,800) and educational services (+3,700). Growth in these industries more than offset weakness in the accommodation and food services (-11,100), utilities (-2,500) and finance, insurance, real estate and leasing industries (-1,800).101

In 2015, Calgary’s services-producing sector is forecast to lead employment growth with an increase of 1.2 per cent. Significant growth in the information and cultural (+8.9 per cent), personal services (+4.4 per cent) and non-commercial services (+4.0 per cent) industries is projected to be offset by losses in the finance, insurance and real estate (-5.6 per cent) and wholesale and retail trade (-1.4 per cent) industries. Employment in public administration is forecast to contract for the fourth consecutive year in 2015 (-1.5 per cent).102

Employment growth in Calgary’s goods-producing sector is projected to be virtually flat in 2015 (+0.1 per cent). Healthy growth in the construction industry (+4.3 per cent) is expected to be offset by losses in the manufacturing (-3.0 per cent) and primary and utilities (-2.7 per cent) industries.103

Calgary’s labour force participation rate rebounded in the first quarter of 2015 and averaged 73.8 per cent, up from 73.1 per cent in the final quarter of 2014. The increase is good news, as Calgary’s participation rate had dropped below 73 per cent in October 2014, a low not seen in about 17 years.

UnemploymentCalgary’s unemployment rate increased from 4.7 per cent in January 2015 to 5.2 per cent in March 2015, averaging 5.0 per cent for the quarter. The number of unemployed in the Calgary CMA averaged 42,700 in the first quarter of 2015, up by 2,300 from the previous quarter and by 2,100 year-over-year. Calgary’s unemployment rate is forecast to average 5.1 per cent in 2015 and 4.6 per cent in 2016.104

Calgary and Edmonton had the fourth lowest unemployment rate among major metropolitan areas in the first quarter of 2015. Regina, Victoria and Saskatoon posted the lowest unemployment rates in the first quarter, all below 5.0 per cent.

!11,100%!2,500%!1,800%

!900%!400%!300%

200%1,000%

3,000%3,300%3,300%3,700%3,800%

9,800%15,500%

!20,000% !10,000% 0% 10,000% 20,000%

Accommoda3on%&%food%services%U3li3es%

Fin.,%insurance,%real%est.%&%leasing%Manufacturing%

Prof.,%scien3fic%&%tech.%services%Other%services%Construc3on%

Forestry,%fishing,%mining,%oil%&%gas%Bus.,%bldg.%&%other%support%services%Informa3on,%culture%&%recrea3on%

Public%administra3on%Educa3onal%services%

Trade%Health%care%&%social%assistance%Transporta3on%&%warehousing%

Annual&Change&in&Employment&by&Industry&Calgary%CMA%!%Q1%2015%


101 Statistics Canada. Table 282-0130.

102 Conference Board of Canada, Metropolitan Outlook1, Winter 2015.

103 Ibid.

104 Ibid.

52 LABOUR MARKET REVIEW

Unemployment Rates of Canadian Cities (CMAs) - Q1 2015


AlbertaThis section on the Alberta Labour Market includes a discussion of: Employment and Unemployment.

EmploymentAlthough the pace of job growth moderated, Alberta continued to create new jobs in the first quarter of 2015. Employment in the province averaged 2,305,100 in the first quarter, an increase of 10,800 (+0.5 per cent) compared to the final quarter of 2014 and an increase of 49,100 (+2.2 per cent) year-over-year.

“Alberta’s ongoing job gains may be somewhat unexpected given the sharp downturn in oil prices seen world-wide. Through the first three months of 2015 the benchmark price of North American oil averaged about $49 US per barrel, one half what it was during the same period one year ago. This matters because to a large extent the oil industry powers the broader Albertan economy. While the price slump has weighed heavily on oil producing firms and government royalty streams, so far it has had only a minor effect on Alberta’s overall employment levels.” 105

4.6$ 4.8$ 4.9$5.0$ 5.0$

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8.0$

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Regina$

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Calgary$

Edmonton$

Quebec$

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Vancouver$

Winnipeg$

Halifax$

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Toronto$

Montreal$

Saint$John$

Windsor$

Une

mploymen

t*Rate*(%

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105 Employment and Social Development Canada, Labour Market Bulletin - Alberta: March 2015 (Quarterly Edition).


Labour Force Statistics - Alberta

Employment growth varied significantly across Alberta’s economic regions this quarter.106 Annual employment growth was strong in the Lethbridge-Medicine Hat (+4.9 per cent), Red Deer (+4.8 per cent) and Calgary (+3.9 per cent) regions and weak in the Banff-Jasper-Rocky Mountain House-Athabasca-Grande Prairie-Peace River (-1.8 per cent), Camrose-Drumheller (-1.4 per cent) and Wood Buffalo-Cold Lake (-0.8 per cent) regions.

“In Wood Buffalo—Cold Lake, the heart of the oil sands, the number of people working was largely unchanged from a year ago. However, with the region’s population continuing to grow and employment not expanding, the unemployment rate jumped from 4.3% to 7.4%—hitting its highest level in more than a decade.” 107

Alberta employers added more part-time positions (+6,400) than full-time positions (+4,300) on a quarter-over-quarter basis in the first quarter of 2015. The swing towards part-time job creation is an indication of a softer job market. Year-over-year, part-time employment in the province increased by 3.9 per cent (+14,200) while full-time employment rose by 1.9 per cent (+35,000).

In addition, women accounted for all of the employment increase (+14,900) on a quarterly basis in the first quarter of 2015, offset by a loss of 4,100 jobs among men. On a year-over-year basis, employment for men increased by 2.3 per cent while employment for women rose 2.0 per cent.

Alberta Jan-15 Feb-15 Mar-15Population 3,323,000 3,327,800 3,332,600Labour Force 2,423,500 2,429,200 2,434,100

Employed 2,313,900 2,299,900 2,301,400Unemployed 109,700 129,300 132,700

Participation Rate 72.9% 73.0% 73.0%Employment Rate 69.6% 69.1% 69.1%Unemployment Rate 4.5% 5.3% 5.5%Source: Statistics Canada, CANSIM Table 2820087, Labour Force Survey, seasonally adjusted


Annual Change

3,327,800 3,311,900 15,900 3,246,000 81,8002,428,900 2,402,400 26,500 2,366,600 62,3002,305,100 2,294,300 10,800 2,256,000 49,100

123,900 108,000 15,900 110,600 13,30073.0% 72.5% 0.5% 72.9% 0.1%69.3% 69.3% 0.0% 69.5% -0.2%5.1% 4.5% 0.6% 4.7% 0.4%

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

!1.8%&

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4.9%&

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Banff!Athabasca&

Camrose&!&Drumheller&

Wood&Buffalo!Cold&Lake&

Edmonton&

Calgary&

Red&Deer&

Lethbridge&!&Medicine&Hat&

Change'in'Employment'by'Economic'Region'in''Alberta'Q1'2014'to'Q1'2015'(year<over<year'per'cent'change)'


106 Statistics Canada Labour Force Survey – CANSIM Table 282-0122, seasonally unadjusted.

107 Employment and Social Development Canada, Labour Market Bulletin Alberta: March 2015.


Employment growth was the strongest for adults aged 55 years and older on both a quarterly (+2.8 per cent) and yearly basis (+2.9 per cent) in the first three months of 2015. While all three major age categories recorded employment growth year-over-year, employment among youth aged 15 - 24 years declined by 7,600 or -2.3 per cent compared to the previous quarter.

Employment by Type of Work, Gender and Age - Alberta

Alberta’s goods-producing sector added 3,900 net jobs in the first quarter of 2015, led by growth in utilities (+9.5 per cent or +1,700), agriculture (+6.2 per cent or +3,800) and construction (+1.7 per cent or +4,400). In February 2015, total construction employment jumped to 268,900, up by 7,000 compared to the previous month.

“Construction industry employment hit a historic high this quarter, thanks to strong monthly gains in February. Nonetheless, employment remained basically flat over the course of the quarter, with slightly fewer people working in the industry in March than in January (-700). Indeed, the short-term outlook for this industry appears neutral at best, given the billions of dollars in cuts to capital spending in the oil-patch, along with a sizeable drop in the value of building permits across all sectors.” 108

Employment declined by 2.3 per cent or -3,900 in the resource industry (forestry, fishing, mining and oil and gas) quarter-over-quarter and by 1.4 per cent or -2,000 in the manufacturing industry.

Year-over-year, employment in the goods-producing sector was up by 9,800 or 1.5 per cent in the first quarter. Employment in the resource industry was down by 9,100 or 5.1 per cent on an annual basis, as conventional drilling activity slowed.

Employment in Alberta’s services-producing sector increased by 6,800 or 0.4 per cent in the first quarter of 2015 relative to the previous quarter. Employment in the transportation and warehousing industry was up by a solid 5.9 per cent (+8,200), and gains in health care and social assistance (+8,000) and public administration (+4,600) were also notable. Four industries posted employment losses on a

AlbertaEmploymentFull-timePart-timeMenWomen15 - 24 years25 - 54 years55 years +Source: Statistics Canada, CANSIM Table 282-0087, Labour Force Survey, seasonally adjusted


Annual Change

2,305,100 2,294,300 10,800 2,256,000 49,1001,923,700 1,919,400 4,300 1,888,700 35,000

381,400 375,000 6,400 367,200 14,2001,269,100 1,273,200 -4,100 1,240,100 29,0001,036,000 1,021,100 14,900 1,015,900 20,100

323,200 330,800 -7,600 315,000 8,2001,561,500 1,554,500 7,000 1,532,600 28,900

420,400 409,100 11,300 408,400 12,000Source: Statistics Canada, CANSIM Table 282-0087, Labour Force Survey, seasonally adjusted




quarterly basis; professional, scientific and technical services (-9,500 or -5.2 per cent), trade (-6,500 or -2.1 per cent), finance, insurance, real estate and leasing (-2,700 or -2.6 per cent) and educational services (-2,000 or -1.5 per cent).

“The considerable drop in the number of people working in the professional, scientific, and technical services industry has been closely linked to weaker energy sector activity. Just as oil prices began to slump in mid-2014, the industry set a new record, employing nearly 190,000 people in Alberta. Since that time it has lost more positions than any other industry, with the largest decline being seen in management, scientific, and technical services.” 109

Year-over-year, Alberta’s services-producing sector added 39,400 net jobs, an increase of 2.5 per cent. Five of eleven industries in the sector recorded annual gains, led by health care and social assistance (+28,900) and transportation and warehousing (+25,200). The trade industry (-21,300) and the professional, scientific and technical services industry (-9,200) posted the most significant annual losses in the first quarter of 2015.

Employment by Industry - Alberta

AlbertaAll IndustriesAgricultureForestry, fishing, mining, oil & gasUtilitiesConstructionManufacturingTradeTransportation & warehousingFinance, insurance, real estate & leasingProfessional, scientific & technical servicesBusiness, building & other support servicesEducational servicesHealth care & social assistanceInformation, culture & recreationAccommodation & food servicesOther servicesPublic administrationSource: Statistics Canada, CANSIM Table 2820088, Labour Force Survey, seasonally adjusted


Annual Change

2,305,100 2,294,300 10,800 2,256,000 49,10065,400 61,600 3,800 61,900 3,500

168,200 172,100 -3,900 177,300 -9,10019,600 17,900 1,700 19,800 -200

264,000 259,600 4,400 251,800 12,200144,900 146,900 -2,000 141,600 3,300307,500 314,000 -6,500 328,800 -21,300147,800 139,600 8,200 122,600 25,200101,600 104,300 -2,700 104,500 -2,900173,300 182,800 -9,500 182,500 -9,20082,000 80,000 2,000 78,300 3,700

130,200 132,200 -2,000 119,800 10,400260,000 252,000 8,000 231,100 28,90071,700 71,300 400 73,000 -1,300

156,800 155,200 1,600 152,000 4,800123,500 120,800 2,700 121,600 1,90088,500 83,900 4,600 89,500 -1,000


!21,300'!9,200'!9,100'

!2,900'!1,300'!1,000'!200'

1,900'3,300'3,500'3,700'4,800'

10,400'12,200'

25,200'28,900'

!40,000' !20,000' 0' 20,000' 40,000'

Trade'Prof.,'scien:fic'&'tech.'services'

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Annual&Change&in&Employment&by&Industry&Alberta&7&Q1&2015&




Looking ahead, employment growth in Alberta is forecast to average between -0.1 per cent and 0.6 per cent in 2015.110

UnemploymentThere were 123,900 unemployed people in Alberta on average in the first quarter of 2015, up substantially from 108,000 in the prior quarter and 110,600 in the first quarter of 2014. Alberta’s unemployment rate jumped from 4.5 per cent in January 2015 to 5.5 per cent in March, averaging 5.1 per cent for the quarter. This was up from 4.5 per cent in the previous quarter and 4.7 per cent in the first quarter of 2014.

Among economic regions in Alberta, the Wood Buffalo-Cold Lake region had the highest average unemployment rate in the first quarter of 2015 at 7.4 per cent, followed by Camrose-Drumheller (5.8 per cent) and Edmonton (5.7 per cent). The Red Deer region had the lowest unemployment rate at 4.7 per cent.

Alberta’s unemployment rate is forecast to average between 5.5 and 5.7 per cent in 2015.111

The average duration of unemployment in Alberta increased slightly to 13.0 weeks in the first quarter of 2015, from 12.8 weeks the previous quarter. In contrast, at the national level the average length of unemployment declined from 18.6 weeks in the fourth quarter of 2014 to 17.3 weeks in the first quarter of 2015. Saskatchewan had the lowest average duration of unemployment in the first quarter at 12.3 weeks, followed by Alberta (13.0 weeks) and Manitoba (14.0 weeks). British Columbia recorded the highest figure at 19.4 weeks.112

The number of long-term unemployed in Alberta (those jobless for 27 weeks or more) rose to 18,900 in March 2015, from 17,200 in March 2014, and accounted for 13 per cent of the total unemployed in the province. Nationally, the number of long-term unemployed (250,900) made up 18 per cent of the total unemployed.113

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110 RBC Economics, Provincial Outlook, March 2015, TD Economics, Provincial Economic Forecast April 2015, BMO Economics, Provincial Economic Outlook, May 2015, Scotia Economics, Global Forecast Update, April 2015.

111 Ibid.

112 Statistics Canada, CANSIM table 282-0047.

113 Ibid.


CanadaThis section on the Canadian Labour Market includes a discussion of: Employment, Unemployment and Job Vacancies.

EmploymentEmployment in Canada increased by 31,300 or 0.2 per cent on a quarterly basis in the first quarter of the year, following a gain of 70,400 jobs in the final quarter of 2014. Year-over-year, employment rose by 131,900 or 0.7 per cent in the first quarter of 2015.

Labour Force Survey Statistics - Canada

The majority of forecasters project moderate employment growth of 1.0 per cent or less for Canada over the next two years. TD Economics is forecasting employment in Canada to increase by 0.8 per cent in 2015, led by growth in Manitoba (1.2 per cent), Nova Scotia (1.1 per cent), Ontario (1.0 per cent) and British Columbia (1.0 per cent). Employment in Newfoundland and Labrador is forecast to decline over the next two years.

Full-time employment accounted for all of the quarterly employment increase in Canada during the first quarter of 2015. Full-time employment increased by 33,400 or 0.2 per cent while part-time employment declined by 2,000 or -0.1 per cent. Year-over-year, full-time employment was up 0.8 per cent in the first quarter of 2015, slightly higher than the growth rate of 0.6 per cent for part-time employment.

Women accounted for the bulk of the job gains on a quarterly basis in the first quarter, as the number of women employed in Canada increased by 25,800 or 0.3 per cent. Year-over-year, employment growth for men (0.9 per cent) outpaced employment growth for women (0.6 per cent) in the first quarter of 2015.

Canada Jan-15 Feb-15 Mar-15Population 29,139,200 29,160,700 29,183,300Labour Force 19,148,400 19,197,600 19,224,000

Employed 17,886,900 17,885,900 17,914,600Unemployed 1,261,500 1,311,700 1,309,300

Participation Rate 65.7% 65.8% 65.9%Employment Rate 61.4% 61.3% 61.4%Unemployment Rate 6.6% 6.8% 6.8%Source: Statistics Canada, CANSIM Table 2820087, Labour Force Survey, seasonally adjusted


Annual Change

29,161,100 29,094,300 66,800 28,856,000 305,10019,190,000 19,138,600 51,400 19,103,500 86,50017,895,800 17,864,500 31,300 17,763,900 131,9001,294,200 1,274,200 20,000 1,339,600 -45,400

65.8% 65.8% 0.0% 66.2% -0.4%61.4% 61.4% 0.0% 61.6% -0.2%6.7% 6.7% 0.0% 7.0% -0.3%




On a quarterly basis, job growth was the strongest for mature workers in Canada. Employment for Canadians aged 55 years and older increased by 34,600 or 1.0 per cent in the first quarter of 2015. Meanwhile, employment for youth aged 15 - 24 years declined by 8,700 on the quarter, while employment for adults aged 25 - 54 years increased by 5,400.

On an annual basis, employment rose in all three major age categories in the first quarter, with the majority of gains once again concentrated in the 55 years and older category (+72,000 or +2.1 per cent).

Employment by Type of Work, Gender and Age - Canada

Canada’s services-producing sector added 36,100 net jobs in the first quarter of 2015, led by growth in educational services (+2.1 per cent or +26,400), health care and social assistance (+0.9 per cent or +19,200) and professional, scientific and technical services (+1.3 per cent or +17,700). In contrast, Canada’s goods producing sector shed 5,100 jobs on a quarterly basis, led by a loss of 15,700 resource jobs (forestry, fishing, mining and oil and gas) and 9,200 manufacturing jobs. Canada’s construction sector added 16,000 net new jobs on the quarter.

Year-over-year, employment increased by 66,000 in health care and social assistance and by 59,800 in educational services, accounting for 95 per cent of the net new jobs in Canada in the first quarter of 2015. Employment gains were also significant in construction (+34,100 or +2.5 per cent), professional, scientific and technical services (+22,700 or + 1.7 per cent) and business, building and other support services (+21,400 or +2.9 per cent). Six industries recorded annual employment losses in the first quarter of 2015. Other services experienced the greatest loss (-39,600), followed by manufacturing (-28,800) and forestry, fishing, mining and oil and gas (-12,700). Employment

CanadaEmploymentFull-timePart-timeMenWomen15 - 24 years25 - 54 years55 years +Source: Statistics Canada, CANSIM Table 2820087, Labour Force Survey, seasonally adjusted


Annual Change

17,895,800 17,864,500 31,300 17,763,900 131,90014,467,500 14,434,100 33,400 14,354,300 113,2003,428,400 3,430,400 -2,000 3,409,600 18,8009,387,600 9,382,100 5,500 9,302,300 85,3008,508,200 8,482,400 25,800 8,461,700 46,5002,494,300 2,503,000 -8,700 2,467,000 27,300

11,871,800 11,866,400 5,400 11,839,200 32,6003,529,700 3,495,100 34,600 3,457,700 72,000


!39,600'!28,800'

!12,700'!12,200'!9,500'

!2,400'1,000'1,400'4,300'7,400'

19,000'21,400'22,700'

34,100'59,800'66,000'

!75,000'!50,000'!25,000' 0' 25,000'50,000'75,000'

Other'services'Manufacturing'

Forestry,'fishing,'mining,'oil'&'gas'Agriculture'

InformaFon,'culture'&'recreaFon'UFliFes'Trade'

Public'administraFon'Fin.,'insurance,'real'est.'&'leasing'

TransportaFon'&'warehousing'AccommodaFon'&'food'services'

Bus.,'bldg.'&'other'support'services'Professional,'scienFfic'&'technical'

ConstrucFon'EducaFonal'services'

Health'care'&'social'assistance'

Annual&Change&in&Employment&by&Industry&Canada'!'Q1'2015'



in public administration and trade was essentially unchanged year-over-year.

Employment by Industry - Canada

Employment in Canada’s manufacturing industry is projected to rebound in 2015. Many non-energy exporters are expected benefit from the weak Canadian dollar and the strengthening U.S. economy.

“Exports of such things as wood products, aerospace products, and machinery and equipment are expected to post solid gains this year. [...] Canadian manufacturers of autos and parts are expected to benefit from the improving labour market conditions and rising consumer confidence in the U.S.—factors that will maintain U.S. households’ appetite for motor vehicles in 2015. Furthermore, a 40 per cent reduction in oil prices will help boost U.S. consumption of vehicles in 2015, since vehicle sales are particularly sensitive to gasoline prices. This will benefit Canadian manufacturers of autos and parts and encourage hiring in the manufacturing sector.” 114

UnemploymentCanada’s unemployment rate averaged 6.7 per cent in the first quarter of 2015, unchanged from the previous quarter but down from 7.0 per cent in the first quarter of 2014.

CanadaAll IndustriesAgricultureForestry, fishing, mining, oil & gasUtilitiesConstructionManufacturingTradeTransportation & warehousingFinance, insurance, real estate & leasingProfessional, scientific & technical servicesBusiness, building & other support servicesEducational servicesHealth care & social assistanceInformation, culture & recreationAccommodation & food servicesOther servicesPublic administrationSource: Statistics Canada, CANSIM Table 2820088, Labour Force Survey, seasonally adjusted


Annual Change

17,895,800 17,864,500 31,300 17,763,900 131,900301,700 299,300 2,400 313,900 -12,200359,500 375,200 -15,700 372,200 -12,700138,300 136,900 1,400 140,700 -2,400

1,399,500 1,383,500 16,000 1,365,400 34,1001,696,500 1,705,700 -9,200 1,725,300 -28,8002,726,200 2,729,200 -3,000 2,725,200 1,000

906,100 901,400 4,700 898,700 7,4001,092,500 1,094,200 -1,700 1,088,200 4,3001,349,800 1,332,100 17,700 1,327,100 22,700

750,200 747,000 3,200 728,800 21,4001,276,800 1,250,400 26,400 1,217,000 59,8002,261,500 2,242,300 19,200 2,195,500 66,000

753,800 755,700 -1,900 763,300 -9,5001,220,400 1,225,000 -4,600 1,201,400 19,000

761,600 773,200 -11,600 801,200 -39,600901,300 913,600 -12,300 899,900 1,400



114 Conference Board of Canada, Canadian Outlook, Economic Forecast, Winter 2015, p.34.


Across Canada, Saskatchewan had the lowest average unemployment rate among provinces in the first quarter of 2015 at 4.6 per cent, followed by Alberta (5.1 per cent) and Manitoba (5.7 per cent). Newfoundland and Labrador had the highest unemployment rate in Canada at 12.4 per cent in the first quarter of 2015, up from 11.9 per cent in the first quarter of 2014.

Forecasters expect Canada’s unemployment rate to average 6.4 to 6.9 per cent in 2015 and 6.3 to 6.8 per cent in 2016. RBC Economics is forecasting Canada’s unemployment rate to drop to 6.4 per cent in 2015 and 6.3 per cent in 2016. Saskatchewan and Manitoba are projected to post the lowest unemployment rates over the next two years, while the Atlantic provinces are forecast to record unemployment rates in the range of 8.0 to 13.0 per cent over the same period.115

Job VacanciesCanadian employers had an estimated 220,300 job vacancies in February 2015. With approximately 1.289 million unemployed in the same month, Canada had 5.9 unemployed people for every job vacancy, down from 7.1 in February 2014.116

The lowest ratios of unemployed to job vacancies in February 2015 were in Alberta, Saskatchewan, British Columbia and Manitoba. A low ratio implies low unemployment and/or many job openings. Newfoundland and Labrador had the highest ratio at 19.9 unemployed for every job vacancy.

With 35,600 vacancies and 119,200 unemployed in February 2015, Alberta’s ratio was 3.4, up from 2.4 the previous year.

0.0%$

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10.0%$

12.0%$

14.0%$

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PE$

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NB$

QC$

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SK$

AB$

BC$

Unemployment*Rates,*Canada*and*Provinces*

Q1$2014$ Q1$2015$

19.9$

13.4$10.4$

7.9$ 6.9$ 6.7$ 5.9$4.5$ 4.0$ 3.5$ 3.4$

0.0$

5.0$

10.0$

15.0$

20.0$

25.0$

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QC$

Canada$

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AB$

Ra#o

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Unemployment.to.Job%Vacancies%Ra#o,%Canada%and%Provinces,%three%month%average%Feb.%2014%and%2015%

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115 RBC Economics, Provincial Outlook, March 2015, p.12.

116 Statistics Canada, CANSIM table 284-0003.


Employer Survey

The purpose of the quarterly survey is to gather information from Calgary and area employers on their recruitment and retention practices and various other employment issues they are facing. Over the course of the year, employers will be divided into four categories based on the number of employees in the company and results of the survey will be reported on as follows:

✓ Q1 2015: Large-sized companies with 100+ employees

✓ Q2 2015: Medium-sized companies with 50 – 99 employees

✓ Q3 2015: Small-sized companies with 10 – 49 employees

✓ Q4 2015: Micro-sized companies with <10 employees

Survey ProfileThe 201 employers surveyed employ approximately 141,245 people. Of this total, 62 per cent are full-time employees, 24 per cent are part-time employees, and 14 per cent are either contract, seasonal, casual, temporary or relief staff.

How many people does your company employ in the Calgary region?

”Other” represents companies in any of the following industries: agriculture, utilities, information & culture,management of companies, administrative & support services, educational services, other services or public administration.

Industry Total Employees

Number of Companies

Mining & Oil & Gas 14,652 20Construction 8,881 20Manufacturing 4,899 20Wholesale & Retail Trade 15,327 21Transportation & Warehousing 9,982 20Professional, Scientific & Technical Services 5,254 20Health Care & Social Assistance 46,067 20Accommodation & Food Services/Arts & Entertainment 5,592 20Finance, Insurance, Real Estate & Leasing 5,929 20Other 24,662 20Total 141,245 201


EMPLOYER SURVEYQ1 2015 Survey Results: Large-sized employers with 100+ employees

62

Business ActivityOn balance, 15 per cent of the employers said their company expanded, down from 21 per cent in Q1 2014.Thirty-seven per cent of the employers surveyed in Q1 2015 said their company expanded in the 12 months prior to their survey and 22 per cent reported their company downsized, resulting in a positive balance of 15 per cent.117 In Q1 2014, 32 per cent of the employers reported they expanded and 11 per cent said they downsized, for a positive balance of 21 per cent.

On balance, 15 per cent of the mining and oil and gas and construction employers and 10 per cent of the manufacturing employers downsized in the last year, as oil prices began their descent mid-2014. In addition, the balance of opinion was neutral for employers in the professional, scientific and technical services industry, with 35 per cent reporting they expanded and 35 per cent reporting they downsized. However, many companies appear to be benefitting from a weaker Canadian dollar and a more optimistic economic outlook in the U.S. In particular, 43 per cent of the wholesale and retail trade employers on balance said their company expanded in the last year, up from 35 per cent when surveyed in Q1 2014.Past Business ActivityPercentage of companies that expanded or downsized in the 12 months prior to their survey

Expanded Downsized Balance Expanded Downsized BalanceOverall Results 32% 11% 21% 37% 22% 15%

Results by IndustryMining & Oil & Gas 40% 15% 25% 35% 50% -15%Construction 35% 20% 15% 25% 40% -15%Manufacturing 20% 20% 0% 25% 35% -10%Wholesale & Retail Trade 40% 5% 35% 48% 5% 43%Transportation & Warehousing 40% 10% 30% 50% 25% 25%Professional, Scientific & Technical Services 40% 10% 30% 35% 35% 0%Health Care & Social Assistance 25% 10% 15% 50% 5% 45%Accommodation & Food Services/Arts & Entertainment 10% 0% 10% 20% 0% 20%Finance, Insurance, Real Estate & Leasing 25% 10% 15% 30% 10% 20%Other 40% 10% 30% 50% 15% 35%

Q1 2014 Q1 2015

Comments‣ “We expanded, but then with the downturn in the economy we began to downsize.” - Construction

‣ “We took on a new building to manage, which increased our employee count by 150.” - Health Care & Social Assistance

21%$15%$

&30%$

&20%$

&10%$

0%$

10%$

20%$

30%$

40%$

Q1$2014$ Q1$2015$

Has$your$company$expanded$or$downsized$$in$the$last$12$months?$

Expanded$ Downsized$ Balance$


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

63 EMPLOYER SURVEY

‣ “We downsized. We went through a big merger and laid off some of our staff.” - Manufacturing

‣ “We had to close a department in December.” - Manufacturing

‣ “We're letting quite a lot of our contract staff go. We're becoming a smaller organization generally. However, for our permanent full-time staff, we haven't let anyone go.” - Mining & Oil & Gas

‣ “Like others in our industry, we've downsized.” - Mining & Oil & Gas

‣ “We're always expanding. We're a janitorial service provider, so the demand is always there.” - Other

‣ “We have added a couple of stores in the Calgary area.” - Wholesale & Retail Trade

‣ “We had to close some of our stores, but we acquired more too. Overall, we expanded.” - Wholesale & Retail Trade

On balance, only 5 per cent of the employers anticipate a business expansion in the next 12 months, down significantly from 31 per cent in Q1 2014.Twenty-four per cent of the employers anticipate their company will expand in the 12 months following their survey and 19 per cent anticipate their company will downsize, for a positive balance of 5 per cent.118 In Q1 2014, 35 per cent anticipated an expansion and only 4 per cent anticipated a downsize, for a positive balance of 31 per cent.

Not surprisingly, mining and oil and gas employers are the most pessimistic about the near-term outlook. On balance, 20 per cent of the employers in the mining and oil and gas industry anticipate a business downsize over the next year. In addition, 15 per cent of the construction employers and 10 per cent of the professional, scientific and technical services employers on balance anticipate a downsize, while employers in the manufacturing industry are neutral. On the other hand, several industries are optimistic about the next 12 months, with one-quarter of the finance, insurance, real estate and leasing employers, 20 per cent of the transportation and warehousing employers and 15 per cent of the “other” employers on balance anticipating a business expansion.

31%$

5%$

&20%$

&10%$

0%$

10%$

20%$

30%$

40%$

Q1$2014$ Q1$2015$

Do#you#an(cipate#a#business#expansion#or#downsize#in#the#next#12#months?#

Expansion$ Downsize$ Balance$


118 Percentage of companies anticipating a business expansion minus percentage of companies anticipating a business downsize.

64 EMPLOYER SURVEY

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 35% 4% 31% 24% 19% 5%

Results by IndustryMining & Oil & Gas 40% 10% 30% 20% 40% -20%Construction 35% 0% 35% 20% 35% -15%Manufacturing 35% 5% 30% 15% 15% 0%Wholesale & Retail Trade 40% 5% 35% 24% 14% 10%Transportation & Warehousing 45% 0% 45% 35% 15% 20%Professional, Scientific & Technical Services 40% 5% 35% 20% 30% -10%Health Care & Social Assistance 30% 5% 25% 35% 25% 10%Accommodation & Food Services/Arts & Entertainment 20% 0% 20% 10% 0% 10%Finance, Insurance, Real Estate & Leasing 20% 5% 15% 25% 0% 25%Other 40% 5% 35% 40% 25% 15%

Q1 2014 Q1 2015

Comments‣ “Yes, we expect more growth in number of visitors and therefore in our programming.” -

Accommodation & Food Services/Arts & Entertainment

‣ “We have the funding and backing to expand. However, we're waiting to see how our current new restaurants operate and to see what happens with the economy.” - Accommodation & Food Services/Arts & Entertainment

‣ “We will be closing our home health branch, so we will be a couple hundred less by June.” - Health Care & Social Assistance

‣ “With oil prices the way they are, we could potentially be downsizing due to a reduction in budget from the government.” - Health Care & Social Assistance

‣ “I expect we will be continuing our downsizing, but that really depends on the economy.” - Mining & Oil & Gas

‣ “We are currently in the process of gearing up to recruit for 200 positions.” - Mining & Oil & Gas

‣ “We hope to expand. However, on a daily basis, certainly every day all summer, I have to turn down work because I don't have enough drivers to do it.” - Transportation & Warehousing

‣ “We're hoping to expand. That was in the proposal, but we haven't heard back on that from head office yet.” - Wholesale & Retail Trade

‣ “We may be joining a larger company, so I'm not sure. They may close our stores, or merge them, or rebrand them.” - Wholesale & Retail Trade


65 EMPLOYER SURVEY

Employment: Past Layoffs, Vacant Positions and Future EmploymentApproximately one-third of the employers laid off workers in the three months prior to their survey. The majority of the layoffs were in the mining and oil and gas industry.Thirty-two per cent of the employers reported they laid off workers in the three months prior to their survey (for reasons other than seasonality). This was up significantly from 20 per cent of the employers in the first quarter of 2014, and was led by mining and oil and gas (60 per cent), professional, scientific and technical services (50 per cent), manufacturing (45 per cent) and construction (45 per cent).

Overall, employers reported over 3,200 people were laid off. Fifty-eight per cent of the layoffs were in the mining and oil and gas industry, while another 30 per cent were in the construction industry. Additional details on layoffs can be found in Appendix B.

5%#10%#

19%#30%#30%#30%#

45%#45%#

50%#60%#

32%#

0%# 10%# 20%# 30%# 40%# 50%# 60%# 70%#

Fin.,#Insurance,#Real#Est.#&#Leasing#Accomm.#&#Food/Arts#&#Ent.#

Wholesale#&#Retail#Trade#TransportaHon#&#Warehousing#Health#Care#&#Social#Assistance#

Other#ConstrucHon#

Manufacturing#Professional,#ScienHfic#&#Technical#

Mining#&#Oil#&#Gas#Overall#

Percentage)of)companies)that)laid)off)employees)in)the)three)months)prior)to)survey)

Q1#2015# Q1#2014#

Industry Total Layoffs

Mining & Oil & Gas 1,853Construction 955Manufacturing 130Professional, Scientific & Technical Services 78Wholesale & Retail Trade 64Transportation & Warehousing 58Health Care & Social Assistance 45Other 11Finance, Insurance, Real Estate & Leasing 8Accommodation & Food Services/Arts & Entertainment 5Total 3,207

Number of layoffs in the three months prior to survey


66 EMPLOYER SURVEY

Seventy-two per cent of the employers had a total of 2,248 vacant positions that needed to be filled.Overall, 72 per cent of the employers reported they had vacant positions that needed to be filled at the time of their survey, down from 81 per cent in the first quarter of 2014. Eighty-five per cent of the health care and social assistance employers had vacant positions, compared to only 40 per cent of the manufacturing employers.

Employers reported they had 2,248 vacancies that need to be filled. Half of all the vacancies were in the ‘other’ and health care and social assistance industries. Additional details on vacant positions can be found in Appendix B.

40%$

65%$

65%$

70%$

76%$

80%$

80%$

80%$

80%$

85%$

72%$

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

Manufacturing$

Mining$&$Oil$&$Gas$

Transporta=on$&$Warehousing$

Construc=on$

Wholesale$&$Retail$Trade$

Professional,$Scien=fic$&$Tech.$

Accomm.$&$Food/Arts$&$Ent.$

Fin.,$Insur.,$Real$Est.$&$Leasing$

Other$

Health$Care$&$Social$Assistance$

Overall$

Percentage)of)companies)with)vacant)posi3ons)that)needed)to)be)filled)at)3me)of)survey)

Q1$2015$ Q1$2014$

Industry Total Vacant Positions

Other 648Health Care & Social Assistance 482Accommodation & Food Services/Arts & Entertainment 324Wholesale & Retail Trade 236Construction 170Transportation & Warehousing 127Finance, Insurance, Real Estate & Leasing 93Professional, Scientific & Technical Services 76Mining & Oil & Gas 60Manufacturing 32Total 2,248

Number of vacant positions at time of survey


67 EMPLOYER SURVEY

On balance, 10 per cent of the employers anticipate employment in their company will increase over the next three months.Once any current vacant positions are filled, 20 per cent of the employers anticipate employment in their company will increase over the next three months, 10 per cent anticipate employment will decrease, and 70 per cent anticipate employment will stay the same, for a positive balance of 10 per cent.119 This is down significantly from the Q1 2014 results when 30 per cent of the employers on balance anticipated employment would increase.

Employers from the accommodation and food services/arts and entertainment industry are the most positive about future employment levels. On balance, one-quarter of the employers in this industry anticipate an increase in employment in the next three months. And while 20 per cent of the construction employers on balance anticipate an increase in employment, this is down significantly from 60 per cent in the first quarter of 2014. In contrast, 10 per cent of the mining and oil and gas employers and 5 per cent of the professional, scientific and technical services employers on balance anticipate employment will decrease over the next three months, significantly more pessimistic when compared to the previous year’s results.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 36% 6% 30% 20% 10% 10%

Results by IndustryMining & Oil & Gas 45% 10% 35% 10% 20% -10%Construction 60% 0% 60% 40% 20% 20%Manufacturing 30% 0% 30% 25% 10% 15%Wholesale & Retail Trade 30% 5% 25% 10% 5% 5%Transportation & Warehousing 40% 15% 25% 25% 10% 15%Professional, Scientific & Technical Services 50% 0% 50% 15% 20% -5%Health Care & Social Assistance 25% 5% 20% 25% 10% 15%Accommodation & Food Services/Arts & Entertainment 35% 15% 20% 25% 0% 25%Finance, Insurance, Real Estate & Leasing 25% 0% 25% 10% 0% 10%Other 20% 5% 15% 15% 5% 10%

Q1 2014 Q1 2015

Overall, employers anticipate employment will increase by a net 623 people in the three months following their survey. ‘Other’ employers anticipate a net increase of 350 people and accommodation and food services/arts and entertainment employers anticipate a net increase of 310 people. Employers in the health care and social assistance (-14 people), mining and oil and gas (-46 people) and

30%$

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20%$

30%$

40%$

Q1$2014$ Q1$2015$

Do#you#an(cipate#employment#will#increase,##decrease#or#stay#the#same#in#the#next#3#months?#

Increase$ Decrease$ Balance$


119 Percentage of employers that anticipate employment in their company will increase in the next three months minus the percentage of employers that anticipate employment will decrease.

68 EMPLOYER SURVEY

transportation and warehousing (-148 people) industries anticipate a net decrease in employment in the three months following their survey.

Recruitment ResourcesNinety-eight per cent of the employers use word of mouth/employee referrals to find applicants. Employers were asked to list all of the resources they use to find applicants. The top three resources employers use are word of mouth/employee referrals (98 per cent), company website/internal postings (93 per cent) and career and classified websites (90 per cent). Sixty nine per cent of the employers said they use social media as a resource, up from 51 per cent in the first quarter of 2014. One quarter of the employers mentioned they use Alberta Works/employment resource centres.Comments‣ “There's word of mouth through the kids that work here. They get bonuses if they refer friends to

work here. We keep our signage up all the time and continue to advertise online.” - Accommodation & Food Services/Arts & Entertainment

‣ “We recruit across Canada, at almost every post-secondary institution that offers accredited programs related to our positions. There's about 30 schools that we track regularly.” - Finance, Insurance, Real Estate & Leasing

‣ “We post on numerous career and classified websites, including job aggregators like Indeed and Wowjobs. We post on Facebook, Twitter, Youtube, Google+, and Linkedin. We post in newspapers

Industry Increase #

Decrease # Net #

Other 370 20 350Accommodation & Food Services/Arts & Entertainment 310 0 310Construction 236 126 110Manufacturing 28 2 26Wholesale & Retail Trade 21 1 20Professional, Scientific & Technical Services 29 21 8Finance, Insurance, Real Estate & Leasing 7 0 7Health Care & Social Assistance 190 204 -14Mining & Oil & Gas 215 261 -46Transportation & Warehousing 87 235 -148Total 1,493 870 623

Anticipated change in employment over the next three months

2%#3%#8%#11%#12%#

25%#27%#29%#

43%#44%#

53%#55%#

64%#69%#72%#

90%#93%#98%#

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

Other#Television#

Radio#Magazines#

High#schools#Alberta#Works/emp.#resource#centres#

Newspapers#Signage#

Technical/trade#insMtutes#Colleges/universiMes#

Employment#agencies#Job#fairs#

Industry#associaMons#Social#media#

WalkTins/unsolicited#resumes#Career#and#classified#websites#

Company#website/internal#posMngs#Word#of#mouth/employee#referrals#

Resources(used(to(find(applicants(


69 EMPLOYER SURVEY

nationally across Canada. We post with industry associations, technical/trade institutes, colleges/universities and magazines on a profession-specific basis.” - Health Care & Social Assistance

‣ “We will be recruiting at schools this year for the first time. We're looking at SAIT, MRU, U of L, Red Deer College, U of C, and one other.” - Manufacturing

‣ “We have a referral program, so we encourage that. We use Monster, social media and our own website. I'm part of a manufacturing exchange group and we collaborate on recruitment matters. We attended job fairs in the 2008-09 era when the market was tough, but we have not recruited using job fairs in recent years.” - Manufacturing

‣ “We will recruit at universities for engineering positions. Newspapers are only used if there's a very specified role that we are willing to spend the advertising money on. We post jobs on industry association websites such as APEGA.” - Mining & Oil & Gas

‣ “We use signage in store. We have partnerships with U of C, SAIT, and MRU. We give presentations at high schools for both the Calgary Board of Education and the Calgary Catholic School District. We utilize many Aboriginal, persons with disabilities, and immigrant-serving agencies. We post at the Youth Employment Centre and other employment resource centres. We will post in community newspapers and magazines on occasion.” - Wholesale & Retail Trade

‣ “Newspapers are our best recruitment resource. We partner with the local high school learning centre for mechanics. The industry as a whole does need more technical people, so we will likely attend more job fairs down the road.” - Wholesale & Retail Trade

However, career and classified websites was the most successful resource over the last 12 months.Employers were then asked to specify the resource that was the most successful over the last 12 months. Of all the resources mentioned, career and classified websites were the most successful, reported by 27 per cent of the employers, followed by company website/internal postings (25 per cent) and word of mouth/employee referrals (25 per cent). While almost 70 per cent of the employers reported they use social media as a resource to find applicants, only 5 per cent said it was the most successful over the last year.

2%#1%#1%#1%#1%#1%#1%#1%#2%#2%#2%#

5%#7%#

25%#25%#

27%#

0%# 10%# 20%# 30%#

Unsure#Other#

Television#Magazines#

Colleges/universi=es#Technical/trade#ins=tutes#

Signage#Industry#associa=ons#

Newspapers#Job#fairs#

Employment#agencies#Social#media#

WalkMins/unsolicited#resumes#Word#of#mouth/employee#referrals#Company#website/internal#pos=ngs#

Career#and#classified#websites#

Most%successful%resource%over%last%12%months%


70 EMPLOYER SURVEY

Recruiting DifficultiesHalf the employers reported having difficulty recruiting qualified employees.Overall, 50 per cent of the employers said they had difficulty recruiting qualified employees in the 12 months prior to their survey, down from 60 per cent in the first quarter of 2014. Three quarters of the accommodation and food services/arts and entertainment employers had difficulty recruiting qualified employees, compared to only one-quarter of the manufacturing employers.

The 100 employers that reported having difficulty recruiting were also asked to specify the occupations that were the most difficult to fill. Cooks was the top occupation, reported by 8 per cent of the employers, followed by information system analysts and consultants (6 per cent) and retail and wholesale trade managers, construction managers and food counter attendants and kitchen helpers (5 per cent each).

Comments‣ “We have had some difficulty for all our positions, but mainly the management and supervisory

roles.” - Accommodation & Food Services/Arts & Entertainment

‣ “Positions that require a specific skill set, education, and experience level are difficult.” - Accommodation & Food Services/Arts & Entertainment

25%$30%$

40%$50%$50%$50%$52%$55%$

70%$75%$

50%$

0%$ 20%$ 40%$ 60%$ 80%$

Manufacturing$Mining$&$Oil$&$Gas$

Fin.,$Insur.,$Real$Est.$&$Leasing$ConstrucDon$

Health$Care$&$Social$Assistance$Other$

Wholesale$&$Retail$Trade$TransportaDon$&$Warehousing$Professional,$ScienDfic$&$Tech.$Accomm.$&$Food/Arts$&$Ent.$

Overall$

Percentage)of)companies)that)had)difficulty)recrui6ng)in)the)12)months)prior)to)survey)

Q1$2015$ Q1$2014$

NOC Code Occupation Employers %

6322 Cooks 8%2171 Information systems analysts and consultants 6%621 Retail and wholesale trade managers 5%711 Construction managers 5%

6711 Food counter attendants, kitchen helpers and related occupations 5%311 Managers in health care 4%

3012 Registered nurses 4%7511 Truck drivers 4%631 Restaurant and food service managers 3%2145 Petroleum engineers 3%6731 Light duty cleaners 3%7237 Welders and related machine operators 3%7312 Heavy-duty equipment mechanics 3%

Note: 100 employers reported having difficulty recruiting qualified employees.

What occupations have been the most difficult to fill?

Only occupations with a response of 3 per cent or more are shown in the table.


71 EMPLOYER SURVEY

‣ “Our restaurant General Managers will move on to other companies once they gain experience. Line cooks and dishwashers will leave for jobs that offer more money.” - Accommodation & Food Services/Arts & Entertainment

‣ “Yes, for certain positions that are very specialized and for our senior executive leadership positions.” - Health Care & Social Assistance

‣ “It’s an ongoing challenge to find front line workers. The positions requiring the person to have a wheelchair accessible home are difficult to fill.” - Health Care & Social Assistance

‣ “We're in the seniors retirement business, so it's hard to find maintenance coordinators without a skewed perception of how much money they will make.” - Health Care & Social Assistance

‣ “The most difficult occupations to fill are the skilled trades for sure. Also, professional designations in the finance area and quality analytics for manufacturing roles. There's a lot of immigration into the country from Nigeria or India, and finding candidates with the language and education levels we need is a real challenge. Very few Canadians respond to our ads.” - Manufacturing

‣ “Yes, but difficulty is specific to the position. I would say it's the more specialized positions that are difficult to fill. The entry level positions are easier because we receive more applications and there are less qualifications needed.” - Mining & Oil & Gas

‣ “We always have difficulty finding counsellors with their Bachelor of Social Work. We get many people who apply without the qualifications. We require our counsellors to have a BSW, so it's finding the right educated people that's challenging.” - Other

‣ “The specific small niche roles and top roles are difficult to fill.” - Professional, Scientific & Technical Services

‣ “The positions that are middle management and higher up are very difficult.” - Wholesale & Retail Trade

‣ “Yes, some positions have been challenging. For example, management roles are difficult if we can't find someone from within to grow into that position.” - Wholesale & Retail Trade

Employers have responded to the difficulty finding qualified employees in a variety of ways. Of the 100 employers that reported having difficulty recruiting qualified employees, 88 per cent increased recruiting efforts, 73 per cent did not fill the job opening and 67 per cent increased the workload for current workers. Approximately one quarter of the 100 employers applied for or hired temporary foreign workers.


72 EMPLOYER SURVEY

Comments‣ “We're really focusing on recruiting and on building relationships with industry associations and

schools. We're looking to attract people right out of or during post-secondary school. We even work with high school career counsellors. We focus on social media coverage. We partner with culinary competitions to bring awareness to our opportunities. We also do paid employee referral.” - Accommodation & Food Services/Arts & Entertainment

‣ “Truthfully, I go to the Philippines to get temporary foreign workers. Now, with the new regulations, I can't staff our existing restaurants. We have to tackle that 20 per cent foreign workers because there are no Canadians coming in the door to apply.” - Accommodation & Food Services/Arts & Entertainment

‣ “We have had to close hotel floors and restaurants due to lack of staff. It was too time consuming to use temporary foreign workers.” - Accommodation & Food Services/Arts & Entertainment

‣ “We've had to go through recruiters that headhunt for us. There's just not any more in the budget to spend on wages, benefits, or training.” - Construction

‣ “I think recruiting resources like social media, word or mouth, and going to schools directly is most important. Our target workforce is the underutilized or new talent pools.” - Health Care & Social Assistance

‣ “Over time, we have been overworking our staff with long hours and stress. We pay out an enormous amount of overtime. We have pushed some work to our US offices.” - Manufacturing

‣ “We looked at other strategies and ways, like increased referral bonus program amounts and changing the job descriptions. We were going through the temporary foreign worker application process, but we didn't move forward with it before the downturn.” - Mining & Oil & Gas

‣ “We've had to go outside the province for recruiting.” - Mining & Oil & Gas

Response to hiring difficulties Employers %

Increased recruiting efforts 88%Did not fill the job opening 73%Increased workload for current workers 67%Increased investment in training provided by in-house staff 55%Redeployed employees to new roles where their skills were more needed 35%Increased wages/benefits to attract more applicants 32%Hired contingent workers, including temps, contractors and freelancers 32%Hired a less qualified applicant 32%Targeted underutilized or new talent pools* 30%Partnered with educational institutions to ensure programs develop candidates with the right skills 30%Applied for/hired temporary foreign workers 24%Increased investment in training provided by a third-party 18%Outsourced the work 16%Redesigned the job to change the required skills 13%Applied for a Canada-Alberta Job Grant 11%Implemented an employee referral program 5%Other 2%Note: 100 employers reported having difficulty recruiting qualified employees.* Mature workers, stay at home parents, persons with disabilities, Aboriginal peoples, etc.

How has your company responded to the difficulty recruiting qualified employees?


73 EMPLOYER SURVEY

‣ “We opened an office in Seattle to attract talent there. We have more career site postings and more focused headhunting.” - Professional, Scientific & Technical Services

‣ “We're trying to devise a program where we can help support schooling. Right now, we offer an educational allowance. Our employees have to be registered, so we can't hire less qualified applicants.” - Professional, Scientific & Technical Services

‣ “We have hired temporary foreign workers to respond to the difficulty finding qualified heavy equipment technicians and parts journeymen.” - Transportation & Warehousing

‣ “We have relied heavily on community based groups and we work with over 10 agencies in the Calgary region. Those include immigrant serving agencies such as the Calgary Catholic Immigration Society, Treaty 7 for Aboriginal applicants, and various agencies serving persons with disabilities. We rely heavily on those and that has worked well for us.” - Wholesale & Retail Trade

‣ “We have not applied for temporary foreign workers since the whole moratorium. We can't be waiting six months for LMIAs to be approved. If someone has an open work permit we will bring them on. Otherwise, we've kind of exhausted the process and given up on the program. The government is too restrictive and is putting way more pressure on employers to manage their workforce needs with Canadians. We've sponsored individuals through the Alberta Immigrant Nominee Program too.” - Wholesale & Retail Trade

‣ “We’re losing revenue and we can't keep up with demand. We work closely with SAIT and the RAP program for apprenticeships. We target mature workers and semi-retired workers for part time driving positions. We have applied for LMIAs.” - Wholesale & Retail Trade

‣ “We're recruiting all the time, instead of just when we need people. We currently have 38 temporary foreign workers.” - Wholesale & Retail Trade

On balance, 32 per cent of the employers anticipate they will have less difficulty recruiting qualified employees over the next 12 months.Three per cent of the employers anticipate they will have more difficulty recruiting qualified employees in the 12 months following their survey, 35 per cent anticipate they will have less difficulty and 65 per cent anticipate they will have about the same difficulty, for a balance of -32 per cent.120 In Q1 2014, 16 per cent of the employers on balance anticipated they would have more difficulty recruiting qualified employees.

On balance, employers in all of the industries

16%$

%32%$

%40%$%30%$%20%$%10%$0%$

10%$20%$30%$

Q1$2014$ Q1$2015$

Do#you#an(cipate#having#more,#less#or#the#same#difficulty#recrui(ng#qualified#employees#in#the#

next#12#months?#More$ Less$ Balance$


120 Percentage of employers that anticipate having more difficulty recruiting qualified employees in the 12 months following their survey minus the percentage of employers that anticipate having less difficulty.

74 EMPLOYER SURVEY

anticipate they will have less difficulty recruiting in the next 12 months, led by mining and oil and gas (-70 per cent), construction (-45 per cent) and professional, scientific and technical services (-45 per cent). 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 19% 3% 16% 3% 35% -32%

Results by IndustryMining & Oil & Gas 20% 0% 20% 0% 70% -70%Construction 25% 15% 10% 0% 45% -45%Manufacturing 20% 0% 20% 10% 35% -25%Wholesale & Retail Trade 30% 0% 30% 0% 38% -38%Transportation & Warehousing 30% 0% 30% 10% 30% -20%Professional, Scientific & Technical Services 15% 5% 10% 0% 45% -45%Health Care & Social Assistance 20% 0% 20% 0% 40% -40%Accommodation & Food Services/Arts & Entertainment 10% 0% 10% 5% 25% -20%Finance, Insurance, Real Estate & Leasing 15% 5% 10% 0% 10% -10%Other 5% 5% 0% 5% 15% -10%

Q1 2014 Q1 2015

Comments‣ “Right now, things have been changing in Alberta with the camp jobs not being in demand. We've

seen a huge increase in applications, more in Edmonton than Calgary, but it's trickling down to Calgary. The future recruiting will depend on if the oil prices go back up.” - Accommodation & Food Services/Arts & Entertainment

‣ “With layoffs happening in Calgary, I think it's going to get easier.” - Manufacturing

‣ “The people laid off in the oil industry don't help us at all. It could still possibly be less difficult, but not by much.” - Professional, Scientific & Technical Services

‣ “Less difficulty because there are going to be more people available to hire. More people are looking for work now than last year.” - Transportation & Warehousing

‣ “Less with the unfortunate economy and with Target closing. Once severance ends for those people, there will be a lot of talent back on the market. If the price of oil remains low we will see more people looking for work. In fact, we're already seeing layoffs and more people wanting jobs with us. With the purchase of some stores, we can move them around our business. Six months ago we closed stores and now we're looking at rehiring some of those people, so there's available talent for us to draw from there too.” - Wholesale & Retail Trade

‣ “If oil stays where it is, I expect I'll see an influx of quality resumes from the oil and gas sector.” - Wholesale & Retail Trade


75 EMPLOYER SURVEY

Employee TurnoverOver 90 per cent of the employers reported employees had voluntarily left their company in the prior year.Overall, 93 per cent of the employers reported employees had left their company in the 12 months prior to their survey as a result of voluntary turnover,121 up from 89 per cent in Q1 2014.

All of the finance, insurance, real estate and leasing, accommodation and food service/arts and entertainment, construction and mining and oil and gas employers said employees had voluntarily left in the prior year, compared to 80 per cent of the manufacturing employers.

Overall, the turnover rate was 7 per cent.Employers reported approximately 10,110 employees left their companies in the 12 months prior to their survey as a result of voluntary turnover. This equates to a turnover rate122 of 7 per cent, down from a rate of 10 per cent in the first quarter of 2014.

The accommodation and food services/arts and entertainment and wholesale and retail trade industries had the highest turnover rates on average at 29 per cent and 15 per cent respectively. The health care and social assistance industry had the lowest employee turnover rate at 2 per cent.

Employers were also asked to specify the occupations that experienced the most voluntary turnover. Food and beverage servers was the top occupation, mentioned by 5 per cent of the employers, followed by nurse aides, orderlies and patient service associates, cooks and construction trades helpers and labourers (4 per cent each).

80%$

85%$

90%$

90%$

90%$

95%$

100%$

100%$

100%$

100%$

93%$

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

Manufacturing$

Transporta:on$&$Warehousing$

Wholesale$&$Retail$Trade$

Health$Care$&$Social$Assistance$

Other$

Professional,$Scien:fic$&$Tech.$

Mining$&$Oil$&$Gas$

Construc:on$

Accomm.$&$Food/Arts$&$Ent.$

Fin.,$Insur.,$Real$Est.$&$Leasing$

Overall$

Percentage)of)companies)with)voluntary)turnover)in)the)12)months)prior)to)survey)

Q1$2015$ Q1$2014$

2%#4%#5%#

7%#7%#7%#

9%#9%#

15%#29%#

7%#

0%# 5%# 10%# 15%# 20%# 25%# 30%#

Health#Care#&#Social#Assistance#Construc<on#

Fin.,#Insur.,#Real#Est.#&#Leasing#Mining#&#Oil#&#Gas#

Other#Professional,#Scien<fic#&#Tech.#

Manufacturing#Transporta<on#&#Warehousing#

Wholesale#&#Retail#Trade#Accomm.#&#Food/Arts#&#Ent.#

Overall#

Employee(turnover(rates(Q1#2015# Q1#2014#


121 Initiated by the employee, not including retirement or maternity leave.

122 Total turnover divided by total employees.

76 EMPLOYER SURVEY

Comments‣ “We have high turnover because a lot of our servers and server assistants are really young. It's a first

job for them and they're still in school. They or their parents realize that they can't work five shifts a week or their marks will suffer.” - Accommodation & Food Services/Arts & Entertainment

‣ “I would say we have a turnover rate of at least 70%. There's always one reason or another that people quit. Either they find another job, or move out of the city, or just to a different part of the city and don't want to commute. Some can't handle the pace of the job and some aren't good at the multitasking.” - Accommodation & Food Services/Arts & Entertainment

‣ “The intermediates with 5-8 years of professional experience tend to leave.” - Construction

‣ “The most turnover happens with skilled account executives with insurance and risk management designations, or CFAs and CAs.” - Finance, Insurance, Real Estate & Leasing

‣ “Health care aides often go on to other continuing care organizations due to wages.” - Health Care & Social Assistance

‣ “The most voluntary turnover happens with the unskilled labourers in production assembly.” - Manufacturing

‣ “We experience the most turnover with our entry level positions.” - Mining & Oil & Gas

‣ “Finding and keeping field plant operators has been very difficult, but we have addressed the leaky dyke and we have found ways to deal with fierce competition for workers.” - Mining & Oil & Gas

‣ “Our counsellors tend to leave because that's a high stress position.” - Other

NOC Code Occupation Employers %

6513 Food and beverage servers 5%3413 Nurse aides, orderlies and patient service associates 4%6322 Cooks 4%7611 Construction trades helpers and labourers 4%1521 Shippers and receivers 3%4212 Community and social service workers 3%6421 Retail salespersons 3%1111 Financial auditors and accountants 3%1411 General office support workers 3%6711 Food counter attendants, kitchen helpers and related occupations 3%6731 Light duty cleaners 3%7511 Truck drivers 3%5254 Program leaders and instructors in recreation, sport and fitness 2%6622 Grocery clerks and store shelf stockers 2%2131 Civil engineers 2%2145 Petroleum engineers 2%7512 Bus drivers, subway operators and other transit operators 2%9614 Labourers in wood, pulp and paper processing 2%9619 Other labourers in processing, manufacturing and utilities 2%

Only occupations with a response of 2 per cent or more are shown in the table.

What occupations have experienced the most voluntary turnover?

Note: 187 employers reported employees had left their company in the previous 12 months as a result of voluntary turnover.


77 EMPLOYER SURVEY

‣ “The most turnover happens with our field staff, especially our survey assistants.” - Professional, Scientific & Technical Services

‣ “The occupations with the most voluntary turnover are the low skilled positions.” - Transportation & Warehousing

‣ “I would say the highest turnover is with our retail positions, and less with our warehousing, manufacturing and offices.” - Wholesale & Retail Trade

On balance, 21 per cent of the employers anticipate employee turnover will be lower over the next year.Nine per cent of the employers anticipate voluntary employee turnover will be higher in the 12 months following their survey and 30 per cent anticipate it will be lower, for a balance of 21 per cent anticipating turnover will be lower.123 In Q1 2014, 3 per cent of the employers on balance anticipated turnover would be lower in the year following their survey.

Forty-five per cent of the construction employers and forty per cent of the mining and oil and gas employers on balance anticipate employee turnover in their company will be lower in the next year. Employers in the manufacturing industry anticipate turnover will be about the same on balance over the next 12 months.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 11% 14% -3% 9% 30% -21%

Results by IndustryMining & Oil & Gas 10% 5% 5% 15% 55% -40%Construction 10% 20% -10% 0% 45% -45%Manufacturing 10% 10% 0% 25% 25% 0%Wholesale & Retail Trade 20% 15% 5% 5% 38% -33%Transportation & Warehousing 15% 15% 0% 15% 25% -10%Professional, Scientific & Technical Services 0% 20% -20% 5% 40% -35%Health Care & Social Assistance 25% 25% 0% 5% 10% -5%Accommodation & Food Services/Arts & Entertainment 10% 5% 5% 5% 15% -10%Finance, Insurance, Real Estate & Leasing 0% 15% -15% 5% 25% -20%Other 10% 5% 5% 10% 20% -10%

Q1 2014 Q1 2015

!3%$

!21%$

!40%$

!30%$

!20%$

!10%$

0%$

10%$

20%$

Q1$2014$ Q1$2015$

Do#you#an(cipate#employee#turnover#will#be#higher#or#lower#in#the#next#12#months?#

Higher$ Lower$ Balance$


123 Percentage of employers that anticipated voluntary turnover would be higher in the 12 months following their survey minus the percentage of employers that anticipated voluntary turnover would be lower.

78 EMPLOYER SURVEY

Comments‣ “I expect lower. We're really working hard on recruiting to attract better candidates through an

extensive interview process. We want to make sure we're hiring and targeting the right people.” - Accommodation & Food Services/Arts & Entertainment

‣ “It has been the same, around 71%, for the last several years.” - Transportation & Warehousing

‣ “Probably lower because we're in a bit of bind in Alberta. There aren't as many jobs available, so I think people want to stay with their employer. With the purchase of new stores, there are also new internal opportunities opening up for our staff to move around within the same company.” - Wholesale & Retail Trade

RetentionThe top successful retention strategy over the last 12 months was providing a competitive salary.Employers were asked to indicate an employee retention strategy that was the most successful over the last 12 months. The top successful strategy was providing a competitive salary, reported by 14 per cent of the employers, followed by providing competitive benefits (13 per cent) and providing learning/growth opportunities (11 per cent). One per cent of the employers said nothing was successful in retaining employees and 12 per cent were unsure. Comments‣ “I think it is the flexibility that's number one. It seems like people have appointments, other jobs, need

time off, or have children. For example, families with young children we give very flexible hours to, and we try to help out where we can.” - Accommodation & Food Services/Arts & Entertainment

‣ “We have quite nice incentives. Our great perks help to keep our staff. For referrals, employees can get up to $600.” - Accommodation & Food Services/Arts & Entertainment

‣ “Instead of offering large raises to management, we're trying to branch out to have their transit pass paid for or to give out golf memberships or to offer child care subsidies.” - Accommodation & Food Services/Arts & Entertainment

‣ “We are taking every possible means for engaging people in the workforce through things like apprenticeship programs. We're looking for people who want a career, not just a job.” - Construction

‣ “We have a lot of employee engagement. They do surveys and determine how employees are feeling working here. We usually apply those strategies and address those concerns.” - Health Care & Social Assistance

12%$1%$1%$1%$1%$

2%$2%$2%$

4%$4%$4%$4%$

5%$5%$5%$

6%$6%$

11%$13%$

14%$

0%$ 3%$ 6%$ 9%$ 12%$ 15%$

Unsure$Nothing$

Employee$referral$program$Job$security$

Work/life$balance$Other$

Performance$review$Excellent$communicaIon$

Cash$bonuses$Employee$engagement$Flexible$work$measures$

InteresIng/challenging$work$Company$culture$

Reward$and$recogniIon$programs$Excellent$management/supervision$

Perks$PosiIve$work$environment$

Learning/growth$opportuniIes$CompeIIve$benefits$$

CompeIIve$salary$

Most%successful%employee%reten0on%strategy%


79 EMPLOYER SURVEY

‣ “I would say the growth opportunities. We offer good education and we're an expanding and growing organization. There are added responsibilities and full time positions all the time.” - Health Care & Social Assistance

‣ “We have a four day workweek.” - Manufacturing

‣ “I think the most important thing is corporate culture. We offer a pleasant and relaxed work environment. We try to bring in corporate events. We have approachable owners and staff. We also offer challenging work for the professionals who want to move their resume and skills ahead and be engaged in special projects.” - Manufacturing

‣ “We used to rely pretty heavily on stock options and term investment bonuses. I'm not sure whether that has more influence on retention now, or if a poor labour market has a sufficient effect on retention.” - Mining & Oil & Gas

‣ “I would say it's the things we're rolling out for employee engagement. We're doing exit interviews and three and six months surveys, and following up on that data. We're emphasizing giving people a realistic job profile and expectations when hired. We're looking at what areas of training are needed. We're increasing referral program bonuses.” - Mining & Oil & Gas

‣ “It's probably the work environment. If people leave, they always end up coming back because of that.” - Transportation & Warehousing

One-third of the employers anticipate they will be focusing more on employee retention over the next year.Thirty-nine per cent of the employers anticipate they will be focusing more on employee retention over the next year, 6 per cent anticipate they will be focusing less and 55 per cent anticipate they will be focusing about the same, for a positive balance of 33 per cent.124 This is down significantly from the first quarter of 2014 when 51 per cent of the employers said they would be focusing more on employee retention. Fifty-five per cent of the health care and social assistance employers and half of the ‘other’ employers anticipate they will be focusing more on employee retention over the next year, compared to only 15 per cent of the professional, scientific and technical services employers and 10 per cent of the mining and oil and gas employers.

51%$

33%$

&10%$

0%$

10%$

20%$

30%$

40%$

50%$

60%$

Q1$2014$ Q1$2015$

Do#you#an(cipate#focusing#more,#less#or#the#same#on#employee#reten(on#in#the#next#12#months?#

More$ Less$ Balance$


124 Percentage of employers that anticipate they will be focusing more on employee retention in the 12 months following their survey minus the percentage of employers that anticipate they will be focusing less.

80 EMPLOYER SURVEY

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 51% 0% 51% 39% 6% 33%

Results by IndustryMining & Oil & Gas 55% 0% 55% 35% 25% 10%Construction 55% 0% 55% 40% 10% 30%Manufacturing 45% 0% 45% 25% 0% 25%Wholesale & Retail Trade 60% 0% 60% 48% 5% 43%Transportation & Warehousing 40% 0% 40% 40% 10% 30%Professional, Scientific & Technical Services 60% 0% 60% 25% 10% 15%Health Care & Social Assistance 60% 0% 60% 55% 0% 55%Accommodation & Food Services/Arts & Entertainment 45% 0% 45% 40% 0% 40%Finance, Insurance, Real Estate & Leasing 50% 0% 50% 35% 0% 35%Other 35% 0% 35% 50% 0% 50%

Q1 2014 Q1 2015

Comments‣ “Definitely more. We just want to hone in on what motivates all of our managers. For example, we

have never offered golf memberships before, but this is something we can offer that gives them work/life balance versus a raise.” - Accommodation & Food Services/Arts & Entertainment

‣ “With the economy, people will choose to stay regardless. We are focusing less on retention.” - Construction

‣ “We’re going to have to focus more on retention. The reason for that is we're implementing a new banking system, so we really need to keep the employees we've got.” - Finance, Insurance, Real Estate & Leasing

‣ “We’re focusing more on training and development for starters, but we will also be focusing more on employee engagement. We will be keeping a focus on developing our company and corporate culture.” - Manufacturing

‣ “I don't think we'll have trouble retaining people. The recession is a built in governor because there's not as many jobs out there. Plus, we've already done things to be more competitive in that area.” - Mining & Oil & Gas

‣ “We will be doing another engagement study to find out what we can be doing even better.” - Mining & Oil & Gas

‣ “We're going through massive layoffs, so we will have less focus on retention.” - Mining & Oil & Gas

‣ “Our employee survey indicated new ways to encourage staff retention. We will employ these strategies in the coming months.” - Other

‣ “We will definitely be focusing more on the learning and development.” - Wholesale & Retail Trade

‣ “We had a recent turnover in managers, so they have brought in some new policies of their own and they're good.” - Wholesale & Retail Trade


81 EMPLOYER SURVEY

Supplemental Questions - Focus on Employee Training and DevelopmentIn addition to the general questions about recruitment and retention practices, employers were asked the following specific questions about their training and development practices:

‣ On a scale of 1 to 5 with 1 being strongly disagree and 5 being strongly agree, please evaluate the following statement: Employee training and development is a top priority in our company.

‣ Does your company currently have a budget specifically for employee training and development? If yes, do you anticipate you will be spending more, less or the same on employee training and development in your next budget.

‣ What is the biggest challenge your company faces in terms of training employees?

‣ In terms of learning content, which of the following areas does your company either provide training or pay for training? (Employers were given a list).

Three quarters of the employers agreed that employee training and development is a top priority in their company.Thirty nine per cent of the employers strongly agreed that employee training and development is a top priority in their company, while 37 per cent of the employers agreed. Only 6 per cent of the employers disagreed.

Employee training and development is a top priority in our company

Ninety per cent of the health care and social assistance employers and 80 per cent of the accommodation and food services/arts and entertainment, finance, insurance, real estate and leasing and mining and oil and gas employers agreed that employee training and development is a top priority in their company. In contrast, only 60 per cent of the professional, scientific and technical services employers agreed.

Strongly)Disagree)

2%)

Disagree)4%)

Neutral)18%)

Agree)37%)

Strongly)Agree)39%)

76%)


82 EMPLOYER SURVEY

Three quarters of the employers have a budget specifically for employee training and development.Seventy-five per cent of the employers said they currently have a budget specifically for employee training and development, 22 per cent said they do not, and 2 per cent were unsure. Ninety five per cent of the health care and social assistance employers and 90 per cent of the ‘other’ employers reported they have a budget specifically for training and development. In contrast, less than two-thirds of the accommodation and food services/arts and entertainment, transportation and warehousing, manufacturing and wholesale and retail trade employers said they have a specific budget for training.

Does your company currently have a budget specifically foremployee training and development?

Comments‣ “There's really no budget here. When we need it, we do it.” - Construction

‣ “We normally do have a budget for training and development, but not this year.” - Construction

‣ “There's not a specific budget. They take some of the regional directors that all have training and use them for training staff. Occasionally we bring in professionals for training. We have our own nursing standards leadership team. We have a lot of people who have the experience to train internally.” - Health Care & Social Assistance

‣ “We have had a budget for training in the past, but we will not have one for 2015.” - Mining & Oil & Gas

‣ “We did, but it was recently cancelled during our downsizing.” - Mining & Oil & Gas

‣ “Yes we have a budget for internal training needs, but we have no budget for external training and development.” - Other

62%$65%$65%$65%$75%$75%$80%$80%$90%$95%$

75%$

0%$ 10%$20%$30%$40%$50%$60%$70%$80%$90%$100%$

Wholesale$&$Retail$Trade$Manufacturing$

TransportaBon$&$Warehousing$Accomm.$&$Food/Arts$&$Ent.$

ConstrucBon$Professional,$ScienBfic$&$Tech.$

Mining$&$Oil$&$Gas$Fin.,$Insur.,$Real$Est.$&$Leasing$

Other$Health$Care$&$Social$Assistance$

Total$

Yes$ No$ Unsure$


83 EMPLOYER SURVEY

Nineteen per cent of the employers on balance anticipate they will be spending more on employee training and development in their next budget.Of the 151 employers that have a budget specifically for training, 19 per cent on balance anticipate they will be spending more on employee training and development in their next budget. Almost half of the health care and social assistance employers anticipate they will be spending more. In contrast, 18 per cent of the mining and oil and gas employers and 7 per cent of the professional, scientific and technical services employers anticipate they will be spending less on balance.Future Spending on Employee Training and DevelopmentPercentage of companies that anticipated they would be spending more or less on employee training and development in their next budget

More Less BalanceOverall Results 32% 13% 19%

Results by IndustryMining & Oil & Gas 13% 31% -18%Construction 20% 20% 0%Manufacturing 54% 15% 39%Wholesale & Retail Trade 38% 8% 30%Transportation & Warehousing 46% 31% 15%Professional, Scientific & Technical Services 13% 20% -7%Health Care & Social Assistance 47% 0% 47%Accommodation & Food Services/Arts & Entertainment 31% 0% 31%Finance, Insurance, Real Estate & Leasing 25% 0% 25%Other 33% 6% 27%

Q1 2015

Note: 151 employers currently have a budget specifically for employee training and development.

Time constraints is the top challenge employers face in terms of training employees.Twenty-nine per cent of the employers said time constraints (too busy) is the biggest challenge they face when training employees. Managing employees’ diverse learning needs and knowing what training is relevant and available is the next biggest challenge, mentioned by 17 per cent of the employers. Another 13 per cent of the employers said training is too costly or is not in the budget.

Biggest Challenge Employers %

Time constraints - too busy 29%Managing employees' diverse learning needs - knowing what training is relevant and available 17%Too costly/not in budget 13%Turnover - employees leave once trained 9%Employees aren't interested in training 5%The locations where employees work are not near the training 5%English is a second language for many of our employees - language barrier 4%Other 2%Employees don't need training - they are fully trained 2%The length of training that is required 1%Communicating effectively with staff about their training needs 1%Unsure 7%None 4%

What is the biggest challenge your company faces in terms of training employees?


84 EMPLOYER SURVEY

Comments‣ “The challenge is the sheer volume when you have hourly staff in a seven day a week, 16 hours a day

operation. You try to make sure you’re updated on any changes on a regular basis but it's hard to manage that.” - Accommodation & Food Services/Arts & Entertainment

‣ “I think the biggest thing is getting the employees to understand how valuable training is to them.” - Construction

‣ “It’s hard finding the right courses.” - Construction

‣ “The English language skills of the people in health care typically coming out of places like NorQuest or other community colleges. They don't have a grasp of the English language and that becomes more problematic when they're serving our target senior demographic. They needed more ESL training before they proceeded on to health training.” - Health Care & Social Assistance

‣ “We have about 800 employees (about 73% of our staff) who don't have access to things like webinars or email. That eliminates the whole of computer possibilities for training.” - Manufacturing

‣ “It's location. Most of our bases are all over Alberta and our training centre is in Red Deer, so that makes it hard to bring in people for training. It's costly because not only are they away from their jobs, but we have to put them up in hotels.” - Mining & Oil & Gas

‣ “I would say it's finding training that's going to be pertinent. We don't want to throw our training dollars to the wind. We want something with a lasting effect.” - Mining & Oil & Gas

‣ “It's having the security guards actually show up for their training.” - Other

‣ “The biggest thing that affects our organization is the funding cuts coming from the government. I've been here for two years and I've seen the funding be a constant issue. Within the past two years, we have increased professional development training, but the funding will remain an issue.” - Other

‣ “The juniors are learning everyday with the seniors. We've had trouble getting our managers to go for management training at the university because of a time factor.” - Professional, Scientific & Technical Services

‣ “It's the commitment from the employee to the training process. For example, our driver training is 10 days of their time and it's difficult to get that time commitment from people.” - Transportation & Warehousing

‣ “To be honest, this is a private company and the owners don't feel it's important.” - Wholesale & Retail Trade

‣ “I wouldn't say we have any challenges. We offer a lot of in house training. For example, we have developed our own supervisor and leadership programs. We also rely on educational reimbursement for full time staff where they can apply for external training through any accredited training institution.” - Wholesale & Retail Trade


85 EMPLOYER SURVEY

‣ “I guess the biggest challenge is that the programs, policies, and procedures are changing so rapidly. It's having the resources to be able to create training programs. We have so many employees and not as many resources for all these individuals to receive training on a one-on-one basis, so we have to do mass group training. It's also difficult to determine what programs are needed and developing those, and training the facilitators for program so they can train the employees.” - Wholesale & Retail Trade

Employers indicated they provide training or pay for training in a variety of areas.The top areas in which employers either provide training or pay for training are new employee orientation (90 per cent), management and supervisory skills (85 per cent), professional and technical training (82 per cent) and occupational health and safety (82 per cent). Forty-three per cent of the employers either provide or pay for training in basis skills (numeracy/literacy).Comments‣ “We've created a training program where

our employees get certificates from a university and/or our restaurant group. We use some of our own facilitators and we bring in external facilitators in conjunction to teach these courses. We've tailored all courses specifically for our employees and the overall organization.” - Accommodation & Food Services/Arts & Entertainment

‣ “We pay for all types of training through a reimbursement program. For example, we will reimburse people who go into trades programs and attend post-secondary schools.” - Construction

‣ “We don't want to spend a lot on our employees due to the uncertainty in the markets.” - Construction

‣ “Basic skills is where we're lacking. We need to partner up with schools because of the nature of the workers we're getting coming out of those schools. They're missing the English as a second language training.” - Health Care & Social Assistance

‣ “Computer training will be a focus in the future as our company becomes more and more reliant on computers.” - Health Care & Social Assistance

‣ “Professional and technical training is paramount. We do shadowing and we train as needed, but there is the new employee orientation as well. We are ISO certified, so do need to do a lot of training to keep that designation.” - Manufacturing

‣ “We will be looking at basic skills training for our new program to hire Aboriginal operators coming from reserves.” - Mining & Oil & Gas

‣ “They get $2,500 per person for training on whatever they want.” - Mining & Oil & Gas

43%$49%$

60%$61%$64%$64%$69%$70%$71%$73%$

82%$82%$85%$90%$

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

Basic$skills$(numeracy/literacy)$Sales$

Quality$ExecuBve$development$

Interpersonal$skills$IT/computer$training$Product$knowledge$

Customer$service/relaBons$Team$building$skills$

Equipment$OccupaBonal$health$and$safety$

Professional$and$technical$training$Management$and$supervisory$skills$

New$employee$orientaBon$

In#which#of#the#following#areas#does#your#company#either#provide#training#or#pay#for#training?#


86 EMPLOYER SURVEY

‣ “We supply every one of our job classifications with a set continuing education allowance. How much is dependent on the level of job. Upkeep of skills, attending seminars, and continuing education are very important.” - Professional, Scientific & Technical Services

‣ “They come with professional and technical training, but everyone is offered $400 yearly for any courses. We also have a lot of in house training on software and new technology.” - Professional, Scientific & Technical Services

‣ “Each employee has $2,000 per year to use towards courses, seminars, educational advancement, and professional development. Employees can have their certifications paid for from other budgets within the company.” - Professional, Scientific & Technical Services

‣ “We do provide occupational health and safety, but there could be more focus on that. We don't provide training on any of the soft skills, just the hard skills.” - Wholesale & Retail Trade

‣ “Everybody has a yearly review where a dollar amount is determined to be put toward training, as long as it relates to their job function.” - Wholesale & Retail Trade

‣ “We just rolled out a new learning and development team with a whole customer service, communication, and decision-making component.” - Wholesale & Retail Trade

Employers have responded to the difficulty recruiting qualified employees in the last 12 months by increasing investment in training.As discussed earlier, employers have responded to the difficulty recruiting qualified employees in a variety of ways. In terms of training, 55 per cent of the 100 employers reported they increased investment in in-house training, 18 per increased investment in third-party training, and 11 per cent applied for a Canada-Alberta Job Grant. The Canada-Alberta Job Grant offers funding toward the cost of training provided by eligible third-party trainers. The total cost of training is shared between the Government of Canada and employers.

Response to hiring difficulties Employers %

Increased recruiting efforts 88%Did not fill the job opening 73%Increased workload for current workers 67%Increased investment in training provided by in-house staff 55%Redeployed employees to new roles where their skills were more needed 35%Increased wages/benefits to attract more applicants 32%Hired contingent workers, including temps, contractors and freelancers 32%Hired a less qualified applicant 32%Targeted underutilized or new talent pools* 30%Partnered with educational institutions to ensure programs develop candidates with the right skills 30%Applied for/hired temporary foreign workers 24%Increased investment in training provided by a third-party 18%Outsourced the work 16%Redesigned the job to change the required skills 13%Applied for a Canada-Alberta Job Grant 11%Implemented an employee referral program 5%Other 2%Note: 100 employers reported having difficulty recruiting qualified employees.* Mature workers, stay at home parents, persons with disabilities, Aboriginal peoples, etc.

How has your company responded to the difficulty recruiting qualified employees?


87 EMPLOYER SURVEY

Comments‣ “We will wait to hire the right candidate, rather than hiring someone who is not qualified. All of our

training is done in house.” - Accommodation & Food Services/Arts & Entertainment

‣ “We applied for temporary foreign workers, but we weren’t successful. We are focusing on adding external training.” - Accommodation & Food Services/Arts & Entertainment

‣ “We will hire a less qualified applicant and then spend more time on in house training than we were hoping on putting in. We used to apply for temporary foreign workers, but not anymore.” - Accommodation & Food Services/Arts & Entertainment

‣ “We offer more external training through the individual training budget given to certain employees.” - Construction

‣ “We focus on training our people and paying for their education internally.” - Health Care & Social Assistance

‣ “We're a custom shop and very project driven, so we focus on in-house training. There are also specialty roles that we have to bring in outside consultants for in order to train our employees.” - Manufacturing

‣ “Our specialized jobs generally take longer to fill, but aren't left vacant forever. To help fill them, we focus on internal training and skills development.” - Mining & Oil & Gas

‣ “We have been growing our own mentorship program. We hire new grads out of NAIT and SAIT and train them ourselves.” - Mining & Oil & Gas

‣ “We're working with universities such as MRU and SAIT to help groom the right kind of candidates. We're also bringing in greenhorns and training them from the ground up.” - Other

‣ “We spend a lot of time and effort on training and offer external courses for our environmental professionals.” - Professional, Scientific & Technical Services

‣ “We have increased our focus on internal training and development to create succession plans for existing employees to move into management roles.” - Wholesale & Retail Trade

‣ “We have worked with SAIT to develop talent for our meat cutting and bakery departments. We focus on internal development and internal succession planning with existing employees. Our training objective is to grow internal talent and offer cross training.” - Wholesale & Retail Trade

Canada-Alberta Job GrantAll 201 employers were asked if they have ever applied for or received or have plans to apply for a Canada-Alberta Job Grant, regardless of whether or not they had difficulty recruiting qualified employees in the last 12 months. Seventeen per cent of the employers reported they have applied for a


88 EMPLOYER SURVEY

grant in the past, or have plans to apply, 78 per cent said they have not applied or have no plans to and 5 per cent were unsure.

Of the 78 per cent (156 employers) that have never applied for or do not have plans to apply for a Canada-Alberta Job Grant, 44 per cent said they have never heard of it and 8 per cent said they don’t know much about it. Twelve per cent of the employers thought applying for a grant would be too much of an administrative burden.Comments‣ “We did apply for something like that a

long time ago. We have no current intentions of applying though. Honestly, there are a lot of hoops to go through. It takes too long. We do a lot of training ourselves.” - Accommodation & Food Services/Arts & Entertainment

‣ “I've never heard of that one, but we do apply annually for the summer student program. It used to be known as the STEP program.” - Accommodation & Food Services/Arts & Entertainment

‣ “Yes we applied, but we got denied. We wanted to move the funding to another position and we couldn't do that.” - Accommodation & Food Services/Arts & Entertainment

‣ “We just haven't needed to apply at this point. However, I do have an appointment with a government representative in a few weeks to learn more about it.” - Manufacturing

‣ “I go after every grant I can get. We are big on youth employment, so we draw from technologist fields from post-secondary schools. With the 3D transition going on in the industry, we need to train the young 3D modelers. I also apply for the research and design grants.” - Manufacturing

‣ “With some more information, we would certainly be interested in pursuing the grant. I just don't know anything about it yet.” - Manufacturing

‣ “I have the information right here in front of me, so I think we will submit.” - Manufacturing

‣ “I hadn’t heard of this, but I would certainly appreciate some more information.” - Manufacturing

‣ “We have applied for it for our class 1 operator training. We have completed a few of those applications.” - Mining & Oil & Gas

‣ “I've never heard of it. That depends, perhaps if we had more information we possibly would apply if we go into a new area. Training is always the best thing for our employees.” - Mining & Oil & Gas

‣ “We haven’t applied for this, but we do apply for Canada Summer Jobs every year. With this training grant, I would say the reason we haven’t applied is just lack of awareness.” - Other

5%#

1%#

3%#

5%#

8%#

8%#

12%#

15%#

24%#

44%#

0%# 10%# 20%# 30%# 40%# 50%#

No#reason/unsure#

Other#

Don't#think#we#qualify#

No#budget#for#training/too#costly#

Management/head#office#decision#

Don't#know#much#about#it#

AdministraGve#burden#

Don't#need#to#train#

Training#needs#met#through#inJhouse#training#

Never#heard#of#it#

Reasons'company'has'never'applied'for'or'has'no'plans'to''apply'for'a'Canada5Alberta'Job'Grant'


89 EMPLOYER SURVEY

‣ “The Summer Student Job Grant funding is not available to us, so we would love more information about the Canada-Alberta Job Grant.” - Other

‣ “I'm hoping we will apply. We have a training program we're preparing to launch and we would be applying for the grant after that.” - Other

‣ “We just discussed applying today actually.” - Professional, Scientific & Technical Services

‣ “Yes I applied, and I expect to be successful.” - Professional, Scientific & Technical Services

‣ “Yes, we're in the process of applying for mechanic positions.” - Transportation & Warehousing

‣ “We have no plans to apply. I am not sure we qualify. We have checked into it and it does not fit with what jobs we want to fill. We want to develop a journeyman program and our understanding is that the Canada-Alberta Job Grant doesn't apply to that.” - Wholesale & Retail Trade

‣ “We have applied for apprenticeship grants for our millwrights. We have never heard of this other grant.” - Wholesale & Retail Trade


90 EMPLOYER SURVEY

Job Bank Analysis

Service Canada’s Job Bank is the country’s largest bi-lingual online listing of job opportunities in Canada. Job seekers are able to view thousands of new job opportunities across Canada every day and access online tools such as Job Match, Job Alert, Resume Builder and Career Navigator free of charge. The site also has a training and careers section, which helps job seekers identify career options, as well as provides information on trends, employment prospects and salary ranges of occupations. Employers have access to a variety of HR management information resources and can advertise and manage their job postings online at their own convenience free of charge.

City of CalgaryFor the City of Calgary, there were 8,937 job postings125 on the Job Bank in the first quarter of 2015, advertising for a total of 21,540 positions. This was down from 25,815 positions the previous quarter and down from 27,276 positions in the first quarter of 2014. Thirty-nine per cent of the positions were sales and service occupations and 31 per cent were trades, transport and equipment operators occupations. The top five occupations advertised were food counter attendants, kitchen helpers and related occupations (1,556 positions), cooks (1,302 positions), food service supervisors (976 positions), truck drivers (788 positions) and retail salespersons and sales clerks (744 positions).

Number of Positions by OccupationQ1 2014 and 2015, City of Calgary

!169!!

!526!!

!545!!

!734!!

!896!!

!1,005!!

!1,031!!

!1,512!!

!6,729!!

!8,393!!

!276!!

!450!!

!708!!

!560!!

!1,319!!

!1,033!!

!1,077!!

!2,125!!

!7,374!!

!12,354!!

!-!!!! !2,500!! !5,000!! !7,500!!!10,000!!!12,500!!

Health!Social!Science,!Educ.,!Gov't!&!Religion!

Art,!Culture,!RecreaFon!&!Sport!Primary!Industry!

Processing,!Manufacturing!&!UFliFes!Management!

Natural!&!Applied!Sciences!Business,!Finance!&!Admin.!

Trades,!Transport!&!Equip.!Operators!Sales!&!Service!

Q1!2014! Q1!2015!


125 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.

JOB BANK ANALYSISThis section provides a summary of jobs posted to the Job Bank in the first quarter of 2015.

91

Communities Surrounding CalgaryFor the communities surrounding Calgary,126 there were 2,361 job postings on the Job Bank in the first quarter of 2015, advertising for a total of 6,482 positions. This was down from 7,235 positions the previous quarter and down from 7,605 positions in the first quarter of 2014. Thirty-three per cent of the positions were sales and service occupations and 29 per cent were trades, transport and equipment operators occupations. The top five occupations advertised were industrial butchers and meat cutters, poultry preparers and related workers (640 positions), food counter attendants, kitchen helpers and related occupations (443 positions), cooks (344 positions), food service supervisors (292 positions) and babysitters, nannies and parents’ helpers (269 positions).

Banff/Canmore AreaFor the Banff/Canmore area, there were 764 job postings on the Job Bank in the first quarter of 2015, advertising for a total of 2,552 positions. This was down from 3,416 positions the previous quarter but up slightly from 2,531 positions in the first quarter of 2014. Sales and service occupations accounted for 90 per cent of the total positions in the first quarter of 2015.

The top five occupations advertised in the first quarter of 2015 were food counter attendants, kitchen helpers and related occupations (794 positions, food service supervisors (588 positions), light duty cleaners (230 positions), cooks, (122 positions) and tour and travel guides (78 positions).

Number of Positions by OccupationQ1 2014 and 2015, Surrounding Communities

!44!!

!48!!

!56!!

!176!!

!218!!

!218!!

!799!!

!889!!

!1,883!!

!2,151!!

!54!!

!19!!

!78!!

!150!!

!173!!

!358!!

!874!!

!567!!

!2,444!!

!2,888!!

!-!!!! !500!! !1,000!!!1,500!!!2,000!!!2,500!!!3,000!!

Social!Science,!Educ.,!Gov't!&!Religion!Art,!Culture,!RecreaDon!&!Sport!

Health!Business,!Finance!&!Admin.!

Management!Natural!&!Applied!Sciences!

Primary!Industry!Processing,!Manufacturing!&!UDliDes!Trades,!Transport!&!Equip.!Operators!

Sales!&!Service!

Q1!2014! Q1!2015!

Number of Positions by OccupationQ1 2014 and 2015, Banff/Canmore Area

!3!!

!7!!

!8!!

!9!!

!16!!

!18!!

!22!!

!85!!

!96!!

!2,288!!

!13!!

!8!!

!7!!

!6!!

!25!!

!52!!

!31!!

!68!!

!104!!

!2,217!!

!-!!!! !500!! !1,000!! !1,500!! !2,000!! !2,500!!

Health!Primary!Industry!

Social!Science,!Educ.,!Gov't!&!Religion!Processing,!Manufacturing!&!ULliLes!

Natural!&!Applied!Sciences!Art,!Culture,!RecreaLon!&!Sport!

Business,!Finance!&!Admin.!Management!

Trades,!Transport!&!Equip.!Operators!Sales!&!Service!

Q1!2014! !Q1!2015!


126 Including but not limited to Airdrie, Chestermere, Cochrane, High River and Okotoks.

92 JOB BANK ANALYSIS

Calgary (city) Positions - Q1 2015127

NOC Code Occupation Positions

6641 Food Counter Attendants, Kitchen Helpers and Related Occupations 1,556 6242 Cooks 1,302 6212 Food Service Supervisors 976 7411 Truck Drivers 788 6421 Retail Salespersons and Sales Clerks 744 7452 Material Handlers 677 7271 Carpenters 661 7611 Construction Trades Helpers and Labourers 641 8612 Landscaping and Grounds Maintenance Labourers 565 6661 Light Duty Cleaners 541 6474 Babysitters, Nannies and Parents' Helpers 416 9619 Other Labourers in Processing, Manufacturing and Utilities 382 7284 Plasterers, Drywall Installers and Finishers and Lathers 366 1453 Customer Service, Information and Related Clerks 326 0631 Restaurant and Food Service Managers 293 5254 Program leaders and instructors in recreation, sport and fitness 293 6211 Retail Trade Supervisors 246 6453 Food and Beverage Servers 245 4212 Social and community service workers 228 0621 Retail Trade Managers 224 7291 Roofers and Shinglers 216 7441 Residential and Commercial Installers and Servicers 216 2171 Information Systems Analysts and Consultants 212 6411 Sales Representatives - Wholesale Trade (Non-Technical) 208 6671 Operators and Attendants in Amusement, Recreation and Sport 203 7321 Automotive service technicians, truck and bus mechanics and mechanical repairers 200 7412 Bus Drivers and Subway and Other Transit Operators 193 6622 Store shelf stockers, clerks and order fillers 189 6611 Cashiers 187 6651 Security Guards and Related Occupations 169 7282 Concrete Finishers 156 7293 Insulators 155 7421 Heavy Equipment Operators (Except Crane) 149 7312 Heavy-Duty Equipment Mechanics 148 6241 Chefs 143 0711 Construction Managers 139 1411 General office support workers 138 7414 Delivery and Courier Service Drivers 130 6215 Cleaning Supervisors 127 6623 Other sales related occupations 125 7251 Plumbers 124 1471 Shippers and Receivers 123 7265 Welders and Related Machine Operators 122 6662 Specialized Cleaners 121 7322 Motor Vehicle Body Repairers 118 7272 Cabinetmakers 114 7443 Automotive Mechanical Installers and Servicers 113 7244 Electrical Power Line and Cable Workers 111 4214 Early Childhood Educators and Assistants 108 7283 Tilesetters 101


127 Only occupations with 100 or more positions are shown in the table.


Communities Surrounding Calgary Positions - Q1 2015128


9462 Industrial Butchers and Meat Cutters, Poultry Preparers and Related Workers 6406641 Food Counter Attendants, Kitchen Helpers and Related Occupations 4436242 Cooks 3446212 Food Service Supervisors 2926474 Babysitters, Nannies and Parents' Helpers 2698612 Landscaping and Grounds Maintenance Labourers 2607411 Truck Drivers 2377611 Construction Trades Helpers and Labourers 1867312 Heavy-Duty Equipment Mechanics 1729617 Labourers in food, beverage and associated products processing 1718431 General Farm Workers 1676421 Retail Salespersons and Sales Clerks 1467271 Carpenters 1468253 Farm Supervisors and Specialized Livestock Workers 1407321 Automotive service technicians, truck and bus mechanics and mechanical repairers 1316661 Light Duty Cleaners 1097291 Roofers and Shinglers 978432 Nursery and Greenhouse Workers 957284 Plasterers, Drywall Installers and Finishers and Lathers 942225 Landscape and horticulture technicians and specialists 937283 Tilesetters 867421 Heavy Equipment Operators (Except Crane) 860631 Restaurant and Food Service Managers 847282 Concrete Finishers 716453 Food and Beverage Servers 696211 Retail Trade Supervisors 666611 Cashiers 667242 Industrial Electricians 567443 Automotive Mechanical Installers and Servicers 568256 Supervisors, Landscape and Horticulture 540621 Retail Trade Managers 516622 Store shelf stockers, clerks and order fillers 466215 Cleaning Supervisors 447294 Painters and decorators (except interior decorators) 437452 Material Handlers 437245 Telecommunications Line and Cable Workers 427219 Contractors & Supervisors, Other Construction Trades, Installers, Repairers & Servicers 416671 Operators and Attendants in Amusement, Recreation and Sport 381122 Professional occupations in business management consulting 372221 Biological Technologists and Technicians 366662 Specialized Cleaners 367241 Electricians (Except Industrial and Power System) 358615 Oil and Gas Drilling, Servicing and Related Labourers 347322 Motor Vehicle Body Repairers 337292 Glaziers 311454 Survey Interviewers and Statistical Clerks 306216 Other Service Supervisors 276623 Other sales related occupations 263112 General Practitioners and Family Physicians 25




Banff/Canmore Area Positions - Q1 2015129


6641 Food Counter Attendants, Kitchen Helpers and Related Occupations 7946212 Food Service Supervisors 5886661 Light Duty Cleaners 2306242 Cooks 1226441 Tour and Travel Guides 786421 Retail Salespersons and Sales Clerks 766435 Hotel Front Desk Clerks 610631 Restaurant and Food Service Managers 466442 Outdoor Sport and Recreational Guides 416453 Food and Beverage Servers 386671 Operators and Attendants in Amusement, Recreation and Sport 366241 Chefs 336622 Store shelf stockers, clerks and order fillers 296216 Other Service Supervisors 236663 Janitors, Caretakers and Building Superintendents 236211 Retail Trade Supervisors 207281 Bricklayers 207412 Bus Drivers and Subway and Other Transit Operators 185254 Program leaders and instructors in recreation, sport and fitness 156215 Cleaning Supervisors 156611 Cashiers 140621 Retail Trade Managers 126681 Dry Cleaning and Laundry Occupations 122225 Landscape and horticulture technicians and specialists 100632 Accommodation Service Managers 96483 Pet Groomers and Animal Care Workers 97241 Electricians (Except Industrial and Power System) 97611 Construction Trades Helpers and Labourers 90721 Facility Operation and Maintenance Managers 86431 Travel Counsellors 87251 Plumbers 80611 Sales, Marketing and Advertising Managers 66214 Dry Cleaning and Laundry Supervisors 66252 Bakers 66623 Other sales related occupations 61231 Bookkeepers 51414 Receptionists and Switchboard Operators 54214 Early Childhood Educators and Assistants 56474 Babysitters, Nannies and Parents' Helpers 57272 Cabinetmakers 59414 Concrete, Clay and Stone Forming Operators 5




Appendix A: Survey Methodology

The Q1 2015 Calgary and Area Employer Survey is based on responses to a telephone questionnaire conducted in January, February and March 2015 of Calgary and area employers with 100+ employees (large-sized employers). Following are the number of respondents from each industry sector.

Industry Number of Respondents

Mining & Oil & Gas 20Construction 20Manufacturing 20Wholesale & Retail Trade 21Transportation & Warehousing 20Professional, Scientific & Technical Services 20Health Care & Social Assistance 20Accommodation & Food Services/Arts & Entertainment 20Finance, Insurance, Real Estate & Leasing 20Other 20Total 201

The ‘Other’ 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.


APPENDIX ASurvey Methodology

96

Appendix B: Employer Survey Occupation Results

Approximately one-third of the employers laid off workers in the three months prior to their survey. The majority of the layoffs were in the mining and oil and gas industry.

Industry Occupation Number of Layoffs

Accommodation & Food Services/Arts & Entertainment Housekeeping 1 Maintenance 1 Servers 2 Cooks 1

Subtotal 5 Construction Engineers 150

Labourers 207 Project Managers 153 Not Specified 445

Subtotal 955 Finance, Insurance, Real Estate & Leasing Insurance Sales 8 Subtotal 8 Health Care & Social Assistance Front Line Community Support Workers 5

Front Line Workers 20 General Labourers 15 Administraton 3 Receptionists 2

Subtotal 45 Manufacturing Assembly Line Manufacturing 8

Entry Level Manufacturing 18 Labourers 66 Marketing 3 Plant Workers 9 Processing Specialist 1 Procurement Manager 1 Sales Engineer 1 Senior Designer 1 Not Specified 22

Subtotal 130 Mining & Oil & Gas Accounting 25

Contractors 1,300 Drillers 1 Engineers 25 Field 352 Field Drill Operators 40 Not Specified 110

Subtotal 1,853


APPENDIX BEmployer Survey Occupation Results

97

Industry Occupation Number of Layoffs

Other Accountant 1 Administration 2 Editorial Reporters 5 Front Line 1 Not Specified 2

Sub Total 11 Professional, Scientific & Technical Services Architect 1

Architectural Technologists 1 Engineers 2 Field 40 Immigration Consultant 1 IT 7 Labourers 3 Office 2 Survey Assistants 2 Not Specified 19

Subtotal 78 Transportation & Warehousing Inspector 1

Manufacturing Technicians 5 Recruiting & Payroll 1 Welders 2 Truck Drivers 6 Taxi Drivers 1 Not Specified 42

Subtotal 58 Wholesale & Retail Trade Automotive Service Technicians 24

Cosmetics 3 Landscaping 1 Project Manager 1 Sales 30 Wholesale Sales 3 Receptionists 2

Subtotal 64

Grand Total 3,207


98 APPENDIX B

Seventy-two per cent of the employers had a total of 2,248 vacant positions that needed to be filled.

NOC Code Occupation Vacant Positions

5254 Program leaders and instructors in recreation, sport and fitness 4813012 Registered nurses 1133413 Nurse aides, orderlies and patient service associates 858255 Landscaping and grounds maintenance contractors and managers 806513 Food and beverage servers 766322 Cooks 746711 Food counter attendants, kitchen helpers and related occupations 746622 Grocery clerks and store shelf stockers 566731 Light duty cleaners 564413 Elementary and secondary school teacher assistants 502145 Petroleum engineers 451521 Shippers and receivers 441411 General office support workers 404032 Elementary school and kindergarten teachers 344212 Community and social service workers 329617 Labourers in food, beverage and tobacco processing 304011 University professors 276311 Food service supervisors 267512 Bus drivers, subway operators and other transit operators 25631 Restaurant and food service managers 24711 Construction managers 24

2174 Computer programmers and interactive media developers 224167 Recreation, sports and fitness policy researchers, consultants and program officers 218612 Landscaping and grounds maintenance labourers 216421 Retail salespersons 197511 Truck drivers 181123 Professional occupations in advertising, marketing and public relations 152171 Information systems analysts and consultants 156531 Tour and travel guides 154165 Health policy researchers, consultants and program officers 134216 Other instructors 137322 Motor vehicle body repairers 133216 Medical sonographers 123233 Licensed practical nurses 126221 Technical sales specialists - wholesale trade 121241 Secretaries (except legal and medical) 117312 Heavy-duty equipment mechanics 11411 Government managers - health and social policy development and program administration 10

6411 Sales representatives - wholesale trade (non-technical) 107282 Concrete finishers 108412 Oil and gas well drilling workers and services operators 10

Note: Only occupations with 10 or more vacancies are shown.


99 APPENDIX B

calgary and area labour market 2015 - quarterly report - q1 · calgary and area labour market -...

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