P.E.I. unemployment rate crashes to record low

With people leaving the workforce and more jobs available in June, the unemployment rate on P.E.I. fell almost three percentage points to a new record low.

Statistics Canada released its monthly Labour Force Survey Friday morning.

The rate dropped from 7.8 to 4.9 per cent, which is the same as the national rate. In recent years only Newfoundland and Labrador typically has had a higher unemployment rate than P.E.I. In June the province ranked in the middle, tied for fifth spot with Alberta.

What is generally considered good news in a low unemployment rate will be bad news for people looking for employment insurance.

Eligibility and the number of weeks of benefits for EI are determined by the unemployment rate in the district you live in.

"The reference rate for the Charlottetown district has dropped below six per cent, which is basically the lowest threshold that there is," said UPEI economics Prof. Jim Sentance.

With the unemployment rate lower, people will have to work longer to qualify, and will be eligible for fewer weeks of benefits.

People will need to work an extra week in order to qualify for the EI benefit, and they will be eligible for a shorter time.

"Even if this number is a bit of a statistical blip I think it's a good indication of the territory that we're moving into," said Sentance.

"Whether it's just a blip or not, this is the official number that's going to be used for the next three months in the three-month rolling average that determines EI eligibility and benefits."

And while he doesn't believe the P.E.I. region, the part of the Island outside of Charlottetown, will be affected this month, if the trend continues changes will come to the rest of the province as well.

Population grew, but workforce didn't

Records going back to 1976 show the unemployment rate on the Island has never been this low. The previous low was 7.7 per cent, which has happened twice, in December 1976 and December 2021.

While the population has been growing the number of people in the workforce, that is, those either working or looking for work, is down. While population growth meant another 400 Islanders 15 or older, the workforce dropped by 1,100. At the same time the economy added 1,600 jobs.

Those two factors combined to create the big drop in the unemployment rate.

Following volatility caused by the pandemic in 2020 and 2021 the unemployment rate has generally been on a downward trend this year, but the June numbers are unprecedented.

Canada as a whole also saw a drop in the number of people in the workforce, but the national economy also lost jobs, making for only a 0.2 percentage point decline in the unemployment rate.