On the other hand, labour market behaviour has been somewhat unusual during this recession. Employment held up relatively well, while hours worked fell particularly sharply. There is some evidence of what economists inelegantly call “labour hoarding” – the retention of skilled workers even if they may not be immediately needed. This suggests that employment may grow relatively slowly.
Indeed, the Bank’s winter Business Outlook Survey reports that the percentage of firms reporting labour shortages declined further, reaching its lowest level since the series began in 1998. With the scale of restructuring required, there may be reluctance to add personnel. Canada is not the only country with large-scale restructuring.