Canada Manufacturing Jobs: Sales Are Back, But 200,000 Jobs Are Missing

Canada Manufacturing Sales Jobs

First Posted: 02/17/2012 5:02 am Updated: 02/17/2012 2:30 pm

Canadian manufacturing sales may have rebounded to near pre-recession levels, but the same cannot be said of manufacturing employment.

New figures released by Statistics Canada on Thursday show that December marked the fifth increase in manufacturing sales in six months, with sales rising to $49.9 billion -- not far off the $50.2 billion logged in October 2008.

Manufacturing employment, however, shows little sign of bouncing back: over the same period, says Statscan analyst Vincent Ferrao, the sector posted a net loss of more than 200,000 jobs; in January, total manufacturing employment was 11 per cent lower than it was in the fall of 2008.

The relatively weak employment numbers highlight the legacy of a downturn that evaporated hundreds of thousands of jobs, and quickened the pace of a fundamental labour market shift.

Angelo DiCaro, a national communications representative for the Canadian Auto Workers’ union, characterizes the gap between the rebound in manufacturing sales and employment as “tremendous.”

“Any uptick in manufacturing sales is really not being seen or felt by the legion of laid off manufacturing workers across the country, that’s for sure,” he said.

In the aftermath of an economic shock, it’s common for employment levels to lag production as companies test the waters before expanding their ranks. But RBC economist Nathan Janzen concedes that the gap in this instance remains wider than expected.

“We were a little surprised. Given that the manufacturing recovery in Canada started really a couple of years ago, we should have already been seeing the manufacturing employment keeping up with production,” he told The Huffington Post.

It’s tough to know what, precisely, is behind the discrepancy, but the challenges that have long plagued Canadian manufacturing are no doubt partly to blame.

Even before the recession, the combination of a strong Canadian dollar, increasing automation and competition from cheap imports was taking a significant bite out of output and employment. Since 2002, DiCaro says the sector has shed nearly 600,000 jobs, over half of which were lost in Ontario, where manufacturing sales “are still below levels seen in the late ’90s and early 2000s.”

“We’ve seen such a collapse in manufacturing production that any uptick that we’re starting to see, we’re just nowhere near where we were,” he said. “When you start looking at the jobs, I don’t know if we’ll ever be where we were less than a decade ago.”

The downturn sped up the decline, with the bulk of the employment loss in the past decade occurring in 2008 and 2009 in Ontario’s once-robust auto industry hubs.

“A lot of that employment has been difficult to recover,” he said. “It’s difficult to say if those jobs will come back or not.”

As employment growth moves to other sectors, such as service and construction, DiCaro says the shift does not bode well for workers, who are often faced with lower wages, greater job insecurity and fewer employer benefits than traditional manufacturing jobs offered.

“We’re not trading off those job losses for equivalent jobs,” he said.

The recent uptick in manufacturing sales in December was concentrated in the transportation equipment industry, where sales rose by 3.7 per cent in December to $8.5 billion. Plastics and rubber products producers and primary metal manufacturers also posted sales gains, while a decline in prices pushed down the dollar value of sales for petroleum and coal product manufacturers.

But Ferrao suspects that a still-shaky global economic climate continues to make employers, who have become accustomed to doing more with less, hesitant to take on a significant number of new hires.

“In order to increase productivity, manufacturers would probably use less labour, or get the labour they have to work more hours,” Ferrao said, adding, “there’s not necessarily a correlation between sales and employment.”


Manufacturing jobs in Canada went into a steep decline even before the recent economic troubles began. According to StatsCan, employment has been in decline since 2004. Here are the 10 fastest-shrinking sectors from 2004 to 2008, when the recession began.

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  • Printing: 11,900 Jobs Lost Before Recession's Start

  • Paper: 13,200 Jobs Lost Before Recession's Start

  • Food: 14,000 Jobs Lost Before Recession's Start

  • Metals: 15,000 Jobs Lost Before Recession's Start

  • Furniture: 23,100 Jobs Lost Before Recession's Start

  • Machinery: 26,200 Jobs Lost Before Recession's Start

  • Plastics & Rubber: 35,300 Jobs Lost Before Recession

  • Clothing: 37,800 Jobs Lost Before Recession

  • Vehicles & Parts: 56,500 Jobs Lost Before Recession

  • Wood Products: 57,300 Jobs Lost Before Recession

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  • 5 Signs Canada's Workers Are In For A Rough 2012

    Photo: CP/Andrew Vaughan

  • Good Jobs Few And Far Between

    When it comes to evaluating Canadian job growth, the employment numbers are just part of what worries Benjamin Tal, deputy chief economist at CIBC World Markets. "It's not only the quantity, but also the quality of employment that's falling in Canada," says Tal. "A lot of the jobs that are being created are low-quality, especially part-time jobs and low-paying jobs." Though -- unlike the U.S. -- Canada has regained all the jobs lost in the recession, he says that an absence of good-paying jobs is the "main reason" why wages have stagnated. Adjusted for inflation, personal after-tax income is now rising at the slowest rate since 1995. Meanwhile, the skills mismatch in many jurisdictions has left employers short on skilled labour despite still-high unemployment levels in other regions. "If you lose a job, you don't have the skill set to go an find a job elsewhere that companies want and need," says Tal. (Alamy photo)

  • Globalization

    When Caterpillar decided to stop assembling locomotives in its Electro-Motive facility in London, Ont., it was a poignant reminder of how globalization is giving deep-pocketed, transnational corporations the ultimate trump card in bargaining with workers: a cheaper alternative. According to Mike Moffatt, a labour expert at the University of Western Ontario's Ivey School of Business, because of automation and an increase in imports from lower wage jurisdictions like China and Mexico, Canadian workers are competing for fewer manufacturing jobs. "That's given firms real power to negotiate down wages," says Moffatt, who points to the <a href="" target="_hplink">Rio Tinto lockout in Quebec</a> as another illustration of the might afforded to companies with global reach. Since locking out workers at its aluminum smelter in Saguenay-Lac-Saint-Jean on December 31, the Anglo-Australian mining giant has used non-union workers to operate the facility at one-third capacity. With no plans to return to the bargaining table, the company recently announced it is restarting two suspended lines, and is expecting to return to full capacity in May. As Tal maintains, "In this environment, the bargaining power of labour is diminishing."

  • Austerity Agenda

    Just as the power has shifted toward private-sector employers, Michael Lynk, a labour law expert at the University of Western Ontario, says there is a sense that governments are becoming emboldened amid the post-recession climate of austerity that has swept from Toronto's City Hall to Parliament Hill. "There's increasingly an attitude of take-it-or-or leave-it by [private sector] employers, but we may begin to see that with public sector bargaining as well, where they basically say, 'You have to meet our bargaining objectives this round, and we're going to be prepared to endure a short or lengthy lockout to prove our point," he says. Though global economic instability recently prompted federal Finance Minister Jim Flaherty to pull back on his earlier commitment to deep cost-cutting in the upcoming budget, government departments are expecting spending to be slashed by between five and 10 per cent, a goal that will be met at least in part at the expense of public service jobs and benefits. The Canadian Centre for Policy Alternatives recently estimated that the <a href="" target="_hplink">federal government's budget cuts could push unemployment up half a percentage point, to 8 per cent</a>. (CP photo)

  • Pension Problems

    From <a href="" target="_hplink">Dalhousie University</a> to <a href="" target="_hplink">Air Canada</a>, employers no longer able -- or willing -- to fund costly pension plans are mounting attempts to roll back retirement benefits, stoking labour unrest and a growing sense of financial insecurity among workers. As Dalhouse University labour economist Lars Osberg explains, the financial crisis took a huge bite out of the value of corporate pension portfolios and the interest rate required to generate the stream of returns to make these programs sustainable. All of which explains why experts anticipate a deepening of the trend away from inflation-protected, gold-plated defined-benefit pension plans, shifting responsibility for retirement savings from employers to workers.

  • Decline Of Unions

    The power in numbers that enabled Big Labour to negotiate better wages and benefits in the aftermath of the Second World War is a distant memory today, as the <a href="" target="_hplink">erosion of unions continues to whittle away the strength of collective bargaining</a>. This is particularly true in the private sector, where unionization sits at 16 per cent of employees, less than a quarter of public sector unionization. "I think you will see more disputes with unions having to compromise more than in the past," says Tal. "I really don't see that they have the upper hand at this point." Given the yawning gap between private and public sector unionization, Lynk warns that pressure on public sector unions could mount as it has in the U.S. in recent months. "The argument they've been floating is, 'Why should public sector workers have jobs for life, good pensions, and decent wages? They're eating up your taxes,'" he says. "I wouldn't be surprised if we're not [starting] to see the beginnings of that kind of argument here in Canada."