Calgary’s unemployment rate is trending higher than Canada’s — but it’s not because of layoffs

Calgary’s unemployment rate has been consistently higher than the national average, but the reason behind this trend may surprise you. It’s not due to mass layoffs by local companies, but rather because people are moving to Alberta at a faster pace than jobs are being created.

Mark Parsons, chief economist at ATB Financial, explained that although job growth in the province has been strong, it hasn’t been able to keep up with the influx of people moving to Alberta. This has led to Calgary’s unemployment rate reaching 7.9 percent in November, above the national average of 6.8 percent.

The trend of higher unemployment rates in Calgary compared to the rest of Canada started after the collapse of oil prices in 2014 and continued throughout the COVID-19 pandemic. Despite the two rates briefly converging in 2022, Calgary’s rate has since diverged due to significant gains in interprovincial and international migration.

Cristina Schultz, recruitment manager at About Staffing, noted that many job-seekers from Ontario and B.C. have been drawn to Alberta, even moving without a job lined up. This has led to a preference among employers for hiring locally, further contributing to the mismatch between job seekers and available opportunities.

While Calgary is not alone in facing these challenges, with Edmonton’s unemployment rate even higher at 8.3 percent, Alberta as a whole has been experiencing significant population growth. The province added around 204,000 people between July 2023 and July 2024, with Calgary and Edmonton absorbing a large portion of this increase in the working-age population.

Despite the positive aspect of population growth, there are concerns about the longer time it may take for newcomers to find jobs, particularly recent graduates. Studies have shown that entering the job market during a period of high unemployment can have long-term impacts on earning potential.

Certain industries in Alberta are facing labor shortages, such as home-building and hospitality, despite the overall job market conditions. It is expected that as population growth slows, the unemployment rate will begin to stabilize, although it is likely to remain higher in Alberta compared to the rest of the country.

In conclusion, the adjustment to the rapid influx of people moving to Alberta will take time, with Parsons predicting that the unemployment rate will remain elevated in 2025 before gradually decreasing in 2026. The ongoing migration to Alberta in search of affordable living opportunities will continue to shape the labor market in the coming years.