VANCOUVER, BC— Alberta continues to lead North America with the best performing labour market over the past five years, according to a new study released today by independent research organization the Fraser Institute.

“For the past five years Alberta has enjoyed strong employment growth, high levels of worker productivity, and low durations of unemployment, making it the best performing labour market overall,” said Niels Veldhuis, co-author of the study and Director of Fiscal Studies at The Fraser Institute.

British Columbia has the second-best labour market in Canada and is ranked 11th in North America, with Saskatchewan finishing third in Canada and 14th among all 10 provinces and 50 U.S. states.

The peer reviewed study, Measuring Labour Markets in Canada and the United States: 2008 Report, assesses the performance of labour markets and examines characteristics which impact performance. The study includes an overall measure of labour market performance based on five indicators: total employment growth, private sector employment growth, unemployment rates, duration of unemployment, and labour productivity over the years 2003-2007.

Aside from Alberta, the rest of the top 10 rated jurisdictions are U.S. states, lead by Nevada, Utah, and Alaska. At number 11, BC narrowly missed the top 10.

Ontario and Quebec, Canada’s most populous provinces, ranked 25th and 50th respectively. Newfoundland was the lowest rated province at 51st with the remainder of the Atlantic provinces all ranked in the bottom half on labour market performance.

“The research highlights the diverging labour markets within Canada. Western provinces are enjoying strong labour markets while the rest of Canada lags behind,” said Keith Godin, study co-author and Fraser Institute senior policy analyst.

Both Ontario and Quebec have relatively low rates of private sector job growth and suffer from high average unemployment rates. The two provinces regressed in this year’s report compared to 2007 when they were ranked 21st and 41st.

The Atlantic provinces also suffer from high average unemployment rates as well as low levels of labour productivity.

“The highest unemployment rates in North America are found in the Atlantic provinces,” Godin said.

“Despite Newfoundland’s burgeoning resource sector, it continues to struggle with an average unemployment rate of 15.2 per cent, more than three times the unemployment rate found in Alberta.”

The study also examines four aspects of labour markets that directly affect labour market performance: public sector employment, unionization, minimum wages, and labour relations laws.

A gap emerges between Canadian provinces and U.S. states when public sector employment is considered with Canadian provinces consistently maintaining higher levels of public-sector employment. Seven of the bottom 10 jurisdictions are Canadian provinces: Quebec, New Brunswick, Prince Edward Island, Nova Scotia, Manitoba, Newfoundland and Labrador, and Saskatchewan.

Saskatchewan has the highest rate of public-sector employment in North America, representing 27.4 per cent of total employment; almost double that of neighbouring Alberta (15.5 per cent).

“The split between private and public sector employment is an important aspect of labour market performance since the incentives, productivity, and performance of labour activity in the private sector is different from that in the public sector,” Veldhuis said.

“Lower labour productivity in the public sector is particularly problematic given that workers in the public sector tend to receive a wage premium compared to their private sector counterparts.”

Unionization is another aspect of the labour market where Canadian provinces and U.S. states diverge. From 2003 to 2007, Canada’s average total unionization rate was 31.8 per cent compared with 13.6 per cent for the United States.

Quebec has the highest rate of unionization in North America with 40.2 per cent of its employed workforce unionized, ranking it 60 out of 60.

One reason for the divergence in unionization rates is Canada’s relatively pro-union labour relation laws. Evidence shows that labour relations laws biasing one group at the expense of another, or which are overly prescriptive, reduce labour market performance.

All provinces, with the exception of Alberta, also maintain relatively high minimum wages which have been proven to reduce employment and on-the-job training.

“Canadian provinces should reduce public sector employment, pursue more balanced and less prescriptive labour laws, and avoid increasing minimum wages to improve the functioning of their labour markets,” Veldhuis said.