Canada's unemployment rate dropped to lowest level on record in March to 5.3%

Canada's economy added 73,000 jobs last month, a little less than economists were expecting but still enough to push the official jobless rate to 5.3 per cent, the lowest level seen on records dating back to 1976.

Statistics Canada reported Friday that both goods-producing industries and the service sector added jobs, but most of the gains were concentrated in Ontario and Quebec, which added 35,000 and 27,000 new jobs, respectively.

The jobless rate is now lower than it was before the pandemic, when it was as low as 5.4 per cent in May of 2019.

Employment has now surpassed the level it was at before the pandemic, and we've moved into a tight labour market where there are more job openings than workers willing to do them right now. That has employers facing a labour crunch like they've never seen.

Jennifer Burstein, a vice-president at Ontario-based construction firm Collecdev, says it's harder than it's ever been to find the right number and calibre of workers to do the work at the growing company.

"We have one position available at the moment that has been on the books for a month or so," she told CBC News in an interview.

She's had about three applicants for the job in that time period, "[but] this time four or five years ago, I would see 40 candidates come through for the same role."

After a lull earlier in the pandemic, the construction industry has roared back, adding jobs for four months in a row now.

The business is busy and growing, which puts added pressure on the current employees to meet that demand.

"Our employees are very dedicated to completing a project and getting the job done right," she said. "They're spread thin."

Wages being pushed up

The jobless rate may well go lower still, as employment growth has been outpacing population growth in Canada for more than half a year now, the data agency said. Since September 2021, Canada has added 463,000 new jobs, even as the population of working-aged people has only grown by 263,000.

That's a recipe for low joblessness, which is good news for anyone looking for work, but it's also good news for people who already have a job, since it will likely lead to higher wages, too.

The growing demand for workers has pushed up average wages by 3.4 per cent in the year up to March. That's about half the inflation rate, but if current trends in the job market continue, it follows that wages must go higher, too. 

"Wages have only one way to go, with a record-low jobless rate and workers pay trailing well behind inflation ... and that's straight up," Bank of Montreal economist Doug Porter said.

Burstein says she sees that every day in her job, trying to find enough qualified candidates to do the job. "It's almost a bidding war of sorts on good quality employees," she said.

Jay Zhao-Murray, an analyst with foreign exchange firm Monex Canada, said the job number for March suggests wages are on a clear trajectory upwards.

"Wage growth is a lagging indicator of a tight labour market, and is therefore likely to rise in coming months," Zhao-Murray said.