OTTAWA - Prime Minister Stephen Harper says he expects Canada's jobless rate to get worse over the next several months as another 82,600 jobs were wiped out in February, pushing the unemployment rate to its highest level in more than five years.
"We are seeing and are expecting a surge of unemployment this year," Harper warned Friday after a speech in London, Ont., a few hours after Statistics Canada revealed the jobless rate soared to 7.7 per cent in February.
The jobs lost in February were nearly twice the losses economists had expected and appeared to undermine Harper's prediction earlier this week that Canada will emerge from the global recession and financial crisis faster than any other country.
However, the prime minister predicted future labour shortages in Canada when the recovery comes and demand for workers rises.
"It doesn't change our assessment that, when the global economy does recover all the demographic indications are that we will have labour shortage."
Earlier Friday, Statistics Canada said the jobless rate rose half a point to 7.7 per cent, almost a full two points higher than where it was a year ago. In the last four months, the Canadian economy has shed nearly 300,000 jobs, more than half of those in the manufacturing heartland of Ontario.
Even Alberta, the former engine of Canada's economic growth with its booming energy sector, is shedding thousands of jobs as the housing and oilsands sectors cool down because of lower global energy prices.
Having entered the recession at least half-a-year earlier, the United States has seen their labour market fall further -- 3.2 per cent from the peak -- compared to the 1.7 per cent decline Canada has experienced since October.
But February's outsized job loss, following January's massive 129,000 contraction, suggests Canada is catching up fast and provides graphic evidence that the economy has fallen off a cliff and has yet to hit bottom. For the past four months, the economy has lost 295,000 jobs in total.
The details were worse than the headline since February's carnage included the loss of 111,000 full-time workers, partly offset by a pick-up in part-time work.
As well, the jobless rate would have been higher had not the labour force increased by 23,100.
Canada's difficulties were also evident in new trade figures released Friday showing the foreign trade deficit grew to $993 million in January from $652 million the previous month, with exports falling 7.9 per cent.
Last summer, the trade surplus was about $5 billion, but the deepening recession in the United States has squeezed U.S. demand for Canadian-made goods -- from automobiles and car parts to lumber, newsprint, copper and other metals.
Canada and the U.S share the largest trading relationship in the world, with more than two thirds of Canada's exports going south of the border.
Most economists had expected job declines in Canada last month, but not so large. The consensus of economists forecast job losses would be in the 50,000 range, partly because January's number was so unexpectedly big and mostly confined to the factory sector.
But in February, manufacturing's woes spread to the construction industry, which shed 43,000 workers, mainly because the slumping housing market and weaker commercial and industrial building pulled down the sector.
Scotia Capital economist Derek Holt says the numbers show Canada is now losing jobs at least as quickly as the United Sates, where the slump is believed to be deeper. Last week, the United States, which has roughly 10 times Canada's population, reported losing 691,000 in February.
The loss in so many full-time jobs also means Canada's "income hit" will be greater as more workers were driven into lower-paying part-time employment, Holt said.
"The speed of decline in Canadian indicators is now outpacing the erosion in the U.S. economy," noted Holt. "In proportionate terms, that would be equivalent to an about 900,000 drop in non-farm payrolls.
"The U.S. was the economy that was supposed to have the greatest credit excesses and subject to the greatest deleveraging, but what that did to global commodity demands (which impacts Canada), and spillover effects is the bigger story here."
Most economists, including Holt, still believe that Canada will fare slightly better when the recessions in the two countries are taken as a whole. However, the difference may not be as great as the federal government suggested this week when it said Canada's rebound will be quicker and stronger.
Paul Moist, national president of the Canadian Union of Public Employees, called on the prime minister to do more.
"If, in fact, the Canadian economy is going to lose half a million jobs this year it seems that we're almost halfway there two months into the year," he said.
"Given the speed at which the Canadian economy is deteriorating, Harper would do better to plan for the reality that Canadian workers are facing."
In Montreal, Liberal Leader Michael Ignatieff said Ottawa hasn't been upfront with Canadians when it comes to unemployment and the crumbling economy.
He said Canada is losing 15 jobs for every 10 lost in the United States and that Harper needs to stop saying Canada is in better shape than its southern neighbour.
Regionally, Ontario lost the most with a 35,300 retreat, followed by Alberta, which saw 23,700 jobs disappear and Quebec, losing 18,400 workers. With nearly 24,000 jobs lost in February, Alberta suffered the biggest drop compared with the size of its provincial labour force.
"Since last October, just over half of the country's total employment losses have occurred in Ontario, well beyond the province's 39 per cent share of the total working-age population," Statistics Canada noted.
In the past four months, 160,000 jobs have disappeared in Ontario, mostly in manufacturing, business and construction.
The agency said another hard-hit segment of the labour force has been young male workers. Employment among men aged between 15 and 24 has decreased by 104,000 in the past four months.
But the misery is being shared by most groups of workers, most provinces and most industries.
The only industries with job pick-ups in February were manufacturing and agriculture, reversing recent trends. Employment dropped in all provinces except Prince Edward Island, Nova Scotia, Manitoba and Saskatchewan, although the job pick-up in those low-population economies were modest.
-- With files from Canadian Press reporter Colin Perkel in London, Ont.
