The Twenty-Four
In this week’s The Seven…
- Jobs jumped in July - The latest Labour Force Survey results
- Exports - What if?
- Back in the air - WestJet staff reach tentative deal
- The Straits of Mackinac - Environmental concerns haven’t gone away
- Interesting Fact - Clouds on the horizon
- Chart of the Week - Unemployment by metro area
I usually read books that involve elves, swords and magical events, but I try to fit in a few that apply more directly to my role within ATB Economics. To that end, three books have helped me reflect on current economic conditions.
The first is “1929: Inside the Greatest Crash in Wall Street History—and How It Shattered a Nation,” by Andrew Ross Sorkin. Sorkin turns the Wall Street Crash of 1929 into a page-turner that highlights the critical role played by a small number of key players. Behind the broad market forces and collective madness, were individuals making choices that had a tremendous impact on how things played out. The crash was not, in other words, inevitable. We live in a different world than that of 1929, but Sorkin’s retelling of what happened highlights the need to avoid similar mistakes.
The second book is “Nexus: A Brief History of Information Networks from the Stone Age to AI” by Yuval Noah Harari. I am hard pressed to recall a time when a single subject dominated discussion across so many areas—from jobs and financial markets to surveillance of the public and the survival of humanity—as AI. The rise of the Internet and then social media come to mind, but I don’t think they were as omnipresent or as divisive. In any case, Harari’s book helps put the AI revolution into context and raises a lot of important questions that, whether you agree or disagree with his arguments, need to be thoroughly debated.
Third on the list is a book that came out back in 1817. I wouldn’t call it “light” summer reading, and it has no shortage of flaws, but David Ricardo’s “On the Principles of Political Economy and Taxation” should be compulsory for anyone involved in international trade. Ricardo argues that protectionism is counterproductive and that free trade rooted in comparative advantage makes the most economic sense. Ricardo is far from the last word on this, but his core ideas about trade are a powerful rejoinder to the notion that international competition and specialization are the enemies of economic success.
On the mend for now - Jobs in July
There is a lot of catching up to do, but Canada’s labour market has been on a solid run the last few months.
According to the Labour Force Survey results for July, the national economy has added 181,000 jobs since May. Job losses earlier in the year, however, mean that employment is only up by 69,000 compared to where things stood at the end of 2025.
July’s results were stronger than expected, with the economy adding 75,000 jobs (0.4%), about half full-time and half part-time. Ontario (+52,000; +0.6%) and British Columbia (+18,000; +0.6%) accounted for the bulk of the gain.
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Even with the labour force growing by a surprisingly strong 0.3% (+60,500), the national unemployment rate ticked down to its lowest level since July 2024 at 6.4%.
Today’s jobs report points to a national labour market that is stabilizing after a weak start to the year. A potential spanner in the works is presented by a new slate of U.S. tariffs scheduled to come into effect later this month.
In contrast, job growth in Alberta took a breather last month.
Employment fell by 7,300 (-0.3%) in July, registering the first monthly decline since February. All of the net job losses in July were full-time positions.
Compared to July of last year, however, employment in Alberta was up by 3.5%, leading all provinces and we don’t expect July's losses to become a trend.
Despite the drop in employment, Alberta's unemployment rate held steady in July at 7% due to a contraction of the labour force, which decreased by 6,300 (-0.2%).
These figures remain aligned with our most recent economic outlook, which projects a 3.3% rise in employment in Alberta for the year alongside an average unemployment rate of 6.6%.
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Exports - Holding up, but what if?
The old saying “if ifs and buts were candy and nuts, we’d all have a merry Christmas” can be applied to many situations, but it is particularly apt with regard to the current state of Canada’s exports to the U.S.
Thankfully, President Trump’s tariff rhetoric has not been matched by actual U.S. tariff policy with most Canadian goods still entering the U.S. duty free. As trade data released earlier this week show, Canada’s sales to the U.S. have been climbing back up since February. Exports to countries other than the U.S. have, meanwhile, reached a new peak.
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This is, however, cold comfort to the specific businesses that have been hurt by U.S. protectionism with more tariffs scheduled to take effect later this month.
Then there are the ifs and buts. How much better would the trade numbers look if the U.S. had not implemented any tariffs? If there were no U.S. tariffs in play, would Canada’s exports to countries other than the U.S. have gone up as much as they have?
Major projects that improve export capacity will help, but we need to see shovels in the ground. In the same vein, efforts to expand Canada’s sales to countries other than the U.S. make sense, but the U.S. will remain our most important trade partner, so the need to manage that relationship remains paramount.
Back in the air - WestJet staff reach tentative deal
Following months of negotiations, roughly 4,400 WestJet flight attendants launched a brief strike over the August long weekend that saw about 900 flights cancelled. The core dispute centered on wage increases and long-standing complaints over unpaid ground duties.
The single-day walkout triggered flight cancellations across Canada before both parties reached a tentative agreement. The proposed three-year deal grants flight attendants a wage increase alongside compensation for ground work and pre-flight duties. It also features improved scheduling flexibility, enhanced layover rest requirements, and extended parental leave top-ups.
With the strike and lockout notices withdrawn, operations are returning to normal while union members prepare for a ratification vote.
If this all sounds familiar, it’s because another one of Canada’s major airlines—Air Canada—went on strike last August seeking higher wages and pay for uncompensated ground work such as passenger boarding and safety checks. About 10,000 flight attendants walked off the job with the strike lasting four days before federal intervention and binding arbitration resolved the dispute. The four-day disruption led to the cancellation of 3,200 flights.
Straits of Mackinac - Oil pipeline tunnel remains on hold
Enbridge Line 5 is a 1,038 km pipeline system that transports up to 540,000 barrels per day of light crude oil, synthetic crude, and natural gas liquids (NGLs) from Superior, Wisconsin, through Michigan, to Sarnia, Ontario. A section of the pipeline that runs through an area connecting Lake Michigan and Lake Huron called the Straits of Mackinac has been a flashpoint of environmental concern. In 2020, the Governor of Michigan revoked the pipeline's 1953 easement, but a federal court blocked Michigan from enforcing a shutdown.
To address the issue, Enbridge proposed building a tunnel under the Straits, but a key permit was recently rejected by the Michigan Supreme Court. Opponents argue the tunnel would lock in decades of fossil fuel reliance rather than transitioning to clean energy. The decision sends the project back for further review, leaving its future uncertain.
Disputes over pipelines are not new, but the turmoil surrounding Line 5 is a timely reminder that proposing to build a pipeline and actually building a pipeline are two very different things.
Interesting Fact: Generational divide
If you do a quick online search, you will find that people in advanced economies tend to think the next generation will be worse off than previous generations. The 2026 Edelman Trust Barometer, for example, found that only 6% of survey respondents in France think the next generation will be better off. It was higher in Canada, but still a dismal outlook at just 16%.
Another way of looking at this is provided by the team at Abacus Data. They asked a sample of 2,366 Canadian adults about the opportunities facing young people today and found that 47% believe people entering adulthood today will have fewer opportunities than the generations before them. Only 18% felt that they would have more opportunities. It goes without saying, but that is not the result we want to see.
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Chart of the Week: The unemployment rate in Canada’s largest cities
There are some striking differences across the labour markets of Canada’s 25 largest census metropolitan areas. Zeroing in on the unemployment rate, Kelowna had the highest rate in July at 9.3% compared to just 4.0% in Québec.
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Answer to the previous trivia question: Switzerland was the largest gold exporter (in value) in the world last year.
Today’s trivia question: What is meant by the AI singularity?