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Economist cites layoffs as fuel for economic slowdown

John Harper, senior economist with Western Diversification Canada, says there are a lot of job cuts coming to Manitoba

Manitoba may be staring an economic slowdown in the face as a number of major companies prepare to cut their workforces.

That was the less-than-bright economic outlook delivered by John Harper, senior economist with Western Diversification Canada to a gathering of rural economic development officers.

Speaking June 1 at the Economic Development Association of Manitoba’s spring forum in Melita, Harper reeled off a long list of looming cuts.

In February, Manitoba Hydro announced it would cut 900 jobs, about 15 per cent of its workforce. At the same time Great-West Life is set to lay off 1,500 Canadian workers, 450 of whom are expected to be cut in Winnipeg. Investors Group has also announced smaller layoffs, about 30 of which are expected to impact Manitoba.

At the same time, regional health authorities, CancerCare Manitoba, Diagnostic Services Manitoba and the Addictions Foundation of Manitoba have been told to cut 15 per cent of management positions. Other Crown corporations, including Manitoba Public Insurance and Manitoba Liquor and Lotteries, face similar cuts. Layoffs are also expected to hit the mining sector, with Vale Canada Ltd. announcing the loss of 200 jobs once operations shut down at their Birchtree Mine in Thompson Oct. 1.

“There’s an attempt by all of those organizations to try and eliminate those positions through attrition and if we can have enough people retiring, getting packages, that’s fine. That probably won’t be a problem,” Harper said. “If they have to resort to actually laying people off or people losing jobs involuntarily, that’s going to be a drain on the economy. There’ll be some uncertainty in the meantime, which may cause people not to go out and purchase big items, which may cause a bit of a slowdown.”

Offsetting those depressive factors, Harper pointed to events such as the Canada Summer Games, set to hit Winnipeg in late July and expected to draw tourism revenue.

Harper’s keynote address covered the 2017 Manitoba economic outlook, labour concerns, trade concerns, regional economic growth initiatives and forecasts for Manitoba industry sectors.

The Conference Board of Canada estimates that Manitoba’s economy will grow 2.1 per cent this year, according to its spring 2017 provincial outlook, released May 29.

While acknowledging expected layoffs, the Conference Board of Canada noted continuing investment around the Keeyask Dam and Bipole III, as well as strong showings in equipment manufacturing, food processing and transportation for the optimistic forecast.

“On the manufacturing side in southern Manitoba, we have solid orders for buses, the aerospace sector is continuing to grow. There’s positive news in food processing with the Roquette plant coming to Portage and we have had strong construction growth in the province over the last number of years,” Harper told forum attendees.

In January 2017, French company Roquette announced a $400-million pea-processing plant to be built in Portage la Prairie by 2019.

Harper also estimated Manitoba’s economic growth at two per cent.

“We should be OK through this summer and then it depends on what happens with some of those layoffs afterwards,” he said.

Manitoba Hydro layoffs may have greater rural impact, Harper said, as will Vale’s mining operation shutdown to the north.

In southern Manitoba, he noted, economic health will be largely related to weather and the ag sector.

Harper advised economic development officers to review supports within the community if there is concern over layoffs.

“Take a look at what opportunities there are for people if they are laid off,” he said. “Are there private companies willing to hire people with those skill sets? Is there some retraining necessary? If people are leaving, take a look at what they’re leaving behind and are there opportunities to bring people in to fill the housing, to start, maybe, a new business than what they’re being forced out of that the community needs? So, those are some opportunities to look for.”

About the author

Reporter

Alexis Stockford is a journalist and photographer with the Manitoba Co-operator. She previously reported with the Morden Times and was news editor of  campus newspaper, The Omega, at Thompson Rivers University in Kamloops, BC. She grew up on a mixed farm near Miami, Man.

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