The Fraser Institute

The Fraser Institute

August 30, 2012 06:32 ET

The Fraser Institute: Quebec Labour Market Lags Western Provinces but Outperforms Ontario and Atlantic Canada

MONTREAL, QUEBEC--(Marketwire - Aug. 30, 2012) - The performance of Quebec's labour market is far behind those found in Western Canada but exceeds that of Ontario and Atlantic Canada, concludes a new report from the Fraser Institute, Canada's leading public policy think-tank.

The report, Measuring Labour Markets in Canada and the United States: 2012 Edition, ranks Quebec fifth among Canadian provinces for the second year in a row, behind all four Western provinces.

Alberta is again home to the top-performing labour market in Canada, followed by Saskatchewan, Manitoba, and British Columbia. The complete report is available at www.institutfraser.org.

Quebec placed ahead of Newfoundland and Labrador (sixth), Ontario (seventh), Prince Edward Island (eighth), and New Brunswick and Nova Scotia (tied for ninth).

"Quebec's labour market has performed better than Ontario's and the Atlantic provinces. However, more can be done to strengthen the province's labour market performance," said Filip Palda, Fraser Institute senior fellow and professor at École nationale d'administration publique.

Measuring Labour Markets in Canada and the United States 2012 measures the performance of North American labour markets in 10 Canadian provinces and 50 U.S. states, and examines characteristics that affect their performance. The report includes an overall measure of labour market performance based on five indicators: total employment growth, private-sector employment growth, unemployment rates, duration of unemployment, and labour productivity over the years 2007-2011.

Quebec did better than Ontario in two key measures: private-sector job growth and average unemployment rate. Quebec averaged 0.8 per cent growth in private sector employment between 2007 and 2011, (ranking it eighth out of 60) compared to Ontario's zero per cent growth (ranking it 21st). Quebec's unemployment rate averaged 6.6 per cent between 2007 and 2011 while Ontario averaged 6.9 per cent unemployment. However, Quebec also averaged one of the lowest labour productivity rates in North America, ranking it in 56th spot out of 60, surpassing only New Brunswick, Nova Scotia, Prince Edward Island and the U.S. state of Vermont.

"While there are a host of external factors and government policies that impact labour market performance, Quebec has unfavourable labour market characteristics and regulations that have been shown to lead to poorer performance," Palda said.

Quebec's labour market is characterized by the highest unionization rate in North America (39.5 per cent) and the most restrictive labour relations laws among all Canadian provinces and U.S. states. Consequently, it ranked dead last, 60th overall, on both of these characteristics. The province ranked 57th overall for its high minimum wage, which totals 42.2 per cent of average per-worker salaries and wages, and it has one of the highest public-sector employment rates (21.8 per cent), ranking it 51st overall.

"Quebec's high rate of unionization is the result labour relations laws that favour one group over another. These restrictive labour relations laws stifle innovation and flexibility, are overly prescriptive, and inhibit the proper and efficient functioning of Quebec's labour market," Palda said.

The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of 85 think-tanks. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org.

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