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Unemployment hits 15-year high in Ontario

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06/06/2009 10:05 AM
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Unemployment hits 15-year high in Ontario
Don Dew didn't work at the General Motors truck plant in Oshawa that shut down last month, but he still lost his job.

The 49-year-old worked in Ajax at the Lear Canada plant, one of many local firms that supplies the ailing automaker. "We signed a new contract with the GM truck plant last May and they guaranteed us jobs through 2012, and a year later I'm unemployed," Dew said.

After 22 years at Lear, Dew lost his job eight days ago.

He plans to take courses for heavy equipment training, unless he lands a job first. He's trying to be optimistic, but it's tough, Dew said.

"When you're coming up on 50 years old, go find a job where there's not 100,000 younger guys ahead of you."

His children are grown, but unemployment is still a huge strain on his finances.

" Everything just got a lot tighter. I used to pay people to do work around the house. Now I do it myself."

The plant closings just east of Toronto and the resulting spiral of layoffs drove up unemployment in May.

The Canadian economy suffered a net loss of 42,000 jobs across the country, pushing the jobless rate up 0.4 percentage points to an 11-year high of 8.4 per cent.

Overall, Ontario was walloped by a net loss of 60,000 positions, bringing the province's running tally of employment losses to 234,000 since the labour market peaked last October. Last month's devastating losses thrust the province's jobless rate up 0.7 of a percentage point from April to 9.4 per cent a whopping 15-year high.

The sheer number of Ontarians who are out of work has reached 670,700 the highest level ever, noted Erin Weir, an economist with the United Steelworkers.

The previous record, 640,400, was set in September 1992.

"And the recession is far from over, at least as far as the labour market is concerned," Weir said.

The report ought to temper the economic enthusiasm that began bubbling earlier this week with a smaller-than-expected decline in real gross domestic product during the first quarter, Weir added.

In fact, the figures show that "stronger stimulus programs will be needed to create jobs."

Moreover, "employment insurance must be enhanced to provide adequate benefits to the unemployed," he said.

The vast majority of the 58,400 manufacturing jobs lost were in Ontario. The province also experienced heavy losses in construction.

[link to www.thestar.com]

Since October, the number of Ontario workers in manufacturing has tumbled 14 per cent and fallen 9.3 per cent in construction, StatsCan reported.

Unemployment in Windsor is the highest in the country at 13.8 per cent, while Toronto's rate stands at 9.1 per cent.

The jump in unemployment was so large that it will affect those who are laid off after June 7 and eligible to collect Employment Insurance benefits, the Canadian Auto Workers noted yesterday. That's because regional data from the Labour Force survey is used to determine qualifying requirements and duration of EI payments for the following month.

The new requirements for Toronto residents will be 560 insurable hours, down from 595 hours. The benefit duration will be 25 to 49 weeks, up from 23 to 47 weeks.

"These numbers can have a huge impact on people. It can make the difference of $1,000 whether you're laid off on Friday or Monday," said Laurell Ritchie, national representative for the CAW.

"They have everything to do with whether people can pay their rent and put food on the table."

Overall, some 363,000 jobs have been lost across Canada since last October.

May's job losses come on the heels of a surprisingly positive employment report in April.

That month's net gain was largely attributed to a jump in Canadians opting for self-employment, a trend that some economists have dismissed as "disguised unemployment."

Still, the increase managed to hold the unemployment rate steady at 8 per cent that month.

Douglas Porter, deputy chief economist with BMO Capital Markets, said the Canadian labour market came "back to reality" in May.

"It's hardly shocking that Canadian employment has retreated again the job shakeout likely still has a way to go, even if the broader economy bottoms out in the coming months," Porter said in a research note to clients.