Recent Labour Market Trends Assessment Methodology

Employment and Social Development Canada's recent labour market trends assessments provide an overview of recent labour market conditions in Canada by economic region (ER) for occupational categories included in the National Occupational Classification (NOC).

In our assessments, we use a number of indicators to classify regional occupational (ER-NOC) labour markets in one of the following categories:

Major labour shortage means that the prospect of finding work in this occupation was very good over the past few years. There were far more job openings than workers available to fill them in that occupational category.

Labour shortage means that the prospect of finding work in this occupation was good over the past few years. There were more job openings than workers available to fill them in that occupational category.

Balanced labour market means that the prospect of finding work in this occupation was fair over the past few years. The amount of workers available to work was about the same as the amount of job openings in that occupational category.

Labour surplus means that the prospect of finding work in this occupation was poor over the past few years. There were more workers available for work than job openings in that occupational category.

Large labour surplus means that the prospect of finding work in this occupation was very poor over the past few years. There were far more workers available to work than job openings in that occupational category.

No Assessment means that there were no sufficient data to produce an assessment of labour market conditions in that region over the past few years due to a low employment rate in that occupational category.

Labour market indicators used in the recent labour market trends assessments

We produce our recent labour market trends assessments by combing the following indicators:

Employment Growth

In our recent labour market trends assessments, employment growth is defined as the average annual growth in employment by ER-NOC over the last three years. For example, for the 2019 assessment, we used the average annualized growth rate from 2017 to 2019. The data for this indicator comes from the labour force survey (LFS) .

Unemployment rate

The unemployment rate is defined as number of unemployed persons expressed as a percentage of the labour force. In our recent labour market trends assessments, the LFS is used to calculate the annual unemployment rate for the most recent year as well as the average annualized change in the rate over the last three years.

Wage growth

Using the LFS, wage growth is defined as the average annual growth in hourly wage by ER-NOC over the last three years. For example, for the 2019 assessment, we used the average annualized growth rate from 2017 to 2019.

Share of overtime workers

This indicator is defined as number of overtime workers as a per cent of the number of employed people by ER-NOC. Using LFS, this indicator is computed for the most recent year.

Share of new hires

Using the LFS, this indicator is defined as number of employees with less than 12 months of tenure as a per cent of the number of employed people by ER-NOC. This indicator is computed for the most recent year.

Job vacancy rate (JVR)

The job vacancy rate (JVR) is defined as number of vacant positions as a per cent of the number of employed people and job vacancies in the same regional occupation. The calculation of the JVRs by ER-NOC involves using the appropriate survey weights (weighted employment counts). The data for the number of job vacancies comes from the Job Vacancy and Wage Survey. The employment data comes from the LFS.

Labour mobility

Labour mobility for a specific ER is defined, as the share of the total for all ERs in-migration for all ERs by 4-digit NOC in Canada. This indicator is used as a proxy for the ability of the ER to attract people from other regions (ATTR). The data comes from the (Canadian) 2016 Census of Population.

Employment Insurance (EI) administrative data

In our recent labour market trends assessments, we use two indicators related to the number of EI beneficiaries: the number of EI-beneficiaries to employment ratio and the average number of weeks of EI benefits. The data for these indicators come from the EI administrative data.

Combining the indicators to produce assessments

The above indicators are combined to produce a composite score for each ER-NOC, as a weighted sum of the values assigned to each indicator. The weights used in the calculation of the composite index were established in consultation with experts from the Employment and Social Development Canada`s National Headquarters as well as regional offices in British Colombia, Alberta, Saskatchewan, Manitoba, Ontario and the Atlantic Provinces. Local labour markets (defined by ER-NOC) as showing indications of major labour shortage, labour shortage, balanced labour market, labour surplus and large labour surplus.

Imputation and missing data

In cases of missing data, we use different strategies in predicting the composite index. For all cases where we have data on employment growth, unemployment rate and wage growth, we provide assessments based on these available variables. For cases (ER-NOC) where theses three variables are missing, we determine whether there has been requests for temporary foreign workers (TFW) in the past (for the ER-NOC under consideration). If there was one request for a TFW in the past (for the ER-NOC under consideration), we impute the assessment based on the provincial average composite score (for the NOC under consideration). For all other cases, where there has been no application for a TFW, we do not produce any assessment.