If low oil prices persist, they will spur a significant reallocation of workers across sectors and regions.15 We’ve seen this happen in previous oil price cycles, as energy-intensive regions gear up and then gear down. This affects labour market conditions across the country.
Because oil prices were so strong up until mid-last year, there is currently no slack (and there was even a little excess demand) in provinces west of Ontario. All of the current slack in labour markets is in provinces east of Manitoba (Chart 5). This will change as the economy adjusts. A relatively hot spot in the Canadian economy is now cooling.