December Labour Lowdown: Toronto’s Labour Market is Navigating Economic Uncertainty
23 December 2024
As 2024 draws to a close, Toronto’s labour market finds itself at a crossroad. From shifting employment trends to industry-specific challenges and broader geopolitical pressures, the city’s labour market faces uncertainty.
Toronto’s employment rate stood at 61.8% in November 2024, reflecting a slight decline from October’s 62.0%. The city’s unemployment rate surged to 9.9%, up from 7.1% in October, signaling a growing number of individuals actively seeking work. These trends align with broader provincial patterns, as Ontario’s unemployment rate climbed to 7.6%, its highest level since May 2014 (excluding the pandemic years of 2020 and 2021).
Labour market instability is further reflected in the JobsTo posting data. There were 20,000 fewer job postings in November 2024 than at the same time last year. Historically, we would see a slight spike in job postings in November, however this year is an exception with job posts declining by almost 20% from the previous month.
While full-time employment in Toronto experienced a minor decline, part-time positions saw slight growth, indicating a shift in the composition of job opportunities.
Youth (Ages 15 to 24). Across Canada approximately 2.76 million youths were employed, a slight decrease of 3,900 positions from October. This represents a 2.7% increase compared to November 2023. The unemployment rate rose by 1.1 percentage points to 13.9%, indicating that more youths were actively seeking employment without success. Year-over-year, this reflects a 2.3 percentage point increase. Both young men and women experienced increases in unemployment rates, with young men seeing a rise of 1.4 percentage points and young women 0.9 percentage points.
Older Workers (55 and Over). Employment among women aged 55 to 64 declined by 20,000 positions, with the employment rate decreasing by 0.7 percentage points to 58.6%. This is a notable drop from the recent peak of 60.5% in May 2024. Men in this age group experienced a year-over-year unemployment increase of 1.3 percentage points to 6.0%, while the rate for women remained relatively unchanged at 4.5%.
Sector-Specific Trends in Toronto’s Economy.
- Professional, Scientific, and Technical Services: This high-demand sector grew by 1.3% month-over-month, driven by Toronto’s thriving tech and innovation hubs. Despite this growth, competition for skilled workers remains intense.
- Construction: Employment rose by 1.7%, supported by ongoing infrastructure projects. However, a 63.6% year-over-year decline in job postings highlights potential challenges ahead for the sector.
- Manufacturing: While the sector saw a year-over-year employment increase of 5.1%, job postings dropped by 55.7%, reflecting caution among employers.
- Retail & Wholesale Trade: Facing a 4.6% decline in employment year-over-year and a 54.6% drop in job postings, this sector struggles to regain its footing amid shifting consumer behaviors.
- Transportation: With employment down 4.4% year-over-year and job postings falling by 70%, the sector contends with operational inefficiencies and high costs.
Additional Information from November’s Labour Force Survey:
Skills Training: November’s Labour Force Survey asked about workplace and personal skills development. It found that there has been a significant increase in training, especially in sectors experiencing labour shortages, such as healthcare, technology, and skilled trades.
Hybrid Work Trends: The prevalence of hybrid work models in Ontario has remained steady. Many businesses, especially in urban areas like Toronto, continue to adopt flexible work arrangements to attract and retain talent.
Wages in Toronto: Toronto wages continue to show gradual increases. Between 2021 and 2022, wages fluctuated moderately between $31 and $34. However, 2023 and 2024 saw a pronounced upward trend, with wages consistently exceeding $36 and peaking at $40.39 in late 2024 influenced by inflationary pressures.
Additional News:
Economic Uncertainty and Small Businesses. Small businesses in Toronto are bearing the brunt of economic uncertainty. The GST/HST holiday, while boosting consumer spending during tax-free periods, posed operational challenges. Many small businesses struggled to adapt their point-of-sale systems, leading to transaction delays during peak shopping times. Moreover, the 2024 postal strike exacerbated logistical vulnerabilities, causing delivery delays, inventory shortages, and strained customer relationships. For businesses reliant on e-commerce, these disruptions underscored the importance of reliable logistics infrastructure.
The compounded challenges of rising operational costs, supply chain issues, and limited access to financial relief have left many small businesses grappling to stay afloat. While some thrived during the tax holidays, there is general agreement among economists and small business associations.
Geopolitical Pressures and Local Impacts. Adding to the uncertainty, geopolitical developments, such as President-elect Donald Trump’s proposed 25% tariff on Canadian imports, loom large. Such measures threaten to disrupt integrated supply chains, particularly in manufacturing and automotive industries crucial to Ontario’s economy. Premier Doug Ford has labeled the proposed tariffs as a “disaster,” while federal and provincial governments explore retaliatory measures and diplomatic solutions.
Toronto may be less impacted by proposed U.S, tariffs than other regions of Canada given that our economy is less reliant than other regions who are more reliant on automotive manufacturing, steel, aluminum, and agriculture. Nevertheless U.S. tariffs would still significantly hurt Toronto’s economy and Ontario at large. Furthermore, there would be job losses in export-driven sectors. Finally, retaliatory tariffs may reintroduce further inflationary pressures back into the economy.
Canada’s retaliation against U.S. tariffs, targeting products like U.S. steel, aluminum, and agricultural goods, could dampen the impact. However, retaliation often escalates trade tensions and doesn’t fully compensate for economic losses.
