By Jock Finlayson, ICBA Chief Economist
Evidence is mounting that the job market is losing steam just as the brewing Canada-U.S. tariff war signals a weakening Canadian economy in the months ahead.
While the national economy expanded at an above-consensus pace in the last quarter of 2024 and also showed some surprising pep in January 2025, the labour market is clearly cooling. The unemployment rate has been edging higher over the last year or so. In addition, the number of job vacancies has been diminishing for many months, after soaring in 2022 and remaining at an elevated level over much of 2023.
According to Statistics Canada, “job vacancies” are computed as the number of job openings relative to the size of the total labour force (which consists of employed people plus those who are unemployed but looking for work). It is usually reported in percentage terms. A rising vacancy rate points to a tighter labour market, where more employers struggle to fill job openings. A dwindling job vacancy rate signals the opposite. The data is available for Canada, the provinces, and a number of specific industries, including construction.
As of late last year, overall job vacancies nationally had been trending lower for nine consecutive quarters. There was essentially no change in the absolute number of job openings in the final quarter of 2024: 548,000. One year earlier, in Q3 2023, Statistics Canada counted 674,000 unfilled positions. The national job vacancy rate stood at 3.1% in Q4 2024.
Measured relative to the unemployment rate, job vacancies have also been declining. The ratio of unemployed persons per job opening was 2.8 in Q4 of 2024. In Q3 2022, the unemployed person/job vacancy ratio reached a record low of 1.1. It has trended higher since then. Statistics Canada notes that the steady increase in the ratio over the course of 2024 was driven by both “fewer job vacancies…and more unemployed persons…”
Turning to B.C. and Alberta, in B.C. the average all-industry job vacancy rate decreased to 3.7% in late 2024; in mid-2022, it peaked at 6.8%. In Alberta, the vacancy rate also fell in Q4 2024, dropping to 3.1%.
Focus on Construction
Most Canadian industries have seen job openings decline over the last 12-18 months. Construction is no exception. Nationally, the job vacancy rate for construction was 2.9% in the last quarter of 2024. The industry’s job vacancy rate peaked in Q2 2022, at 7.1%.
The provinces of B.C. and Alberta have exhibited the same trend toward fewer construction industry openings. In B.C., the construction job vacancy rate ended 2024 at 4.5%, down from 6.7% in Q4 2023 and an all-time high of 10.6% in mid-2022. According to Statistics Canada, there were 9,160 construction job vacancies in B.C. as of Q4 2024.
In Alberta, the construction industry job vacancy rate was 4.2% in late 2024, down from 5.6% in Q3 2023 and 7.4% in the second quarter of 2022. In both provinces, the construction industry continues to experience a higher job vacancy rate than the overall economy. Statistics Canada counted some 8,800 unfilled construction jobs in Alberta in the final quarter of last year.
Canada’s two Western-most provinces report relatively more construction job openings than other parts of the country. This underscores the persistence of skill shortages in construction, even if the acute labour supply pressures seen in 2022-23 have eased.
