The majority of jobs created in Canada last year were in high-paying sectors, supporting an overall upward trend in employment quality and personal income that bodes well for the economy, accoding to a new report from CIBC World Markets.

“Not only did the Canadian economy generate close to 400,000 new jobs in 2007, but the vast majority of them were in high-paying sectors,” says Benjamin Tal, senior economist at CIBC World Markets in his latest Employment Quality Index (EQI) report.

The index, which considers the distribution of part time and full time jobs, compensation and other factors in over 100 industry groups, finished 2007 at an 18-month high and experienced the largest annual increase in employment quality since 1999.

“The number of full-time paid employees in high-paying sectors such as public administration, computer services, and oil and gas extraction rose by a strong 3.6% in 2007, while the number of jobs in low-paying sectors such as general merchandize stores, textile and furniture manufacturing, in fact fell by 1.2% during the year,” adds Tal.

Alberta and Saskatchewan led the quality parade in 2007, fuelled by strong job gains in energy extraction and mining, sectors where earnings run from 50 per cent to 125 per cent above the industrial average. Also notable is Ontario’s ranking as the second lowest on the index, which is “a clear reflection of the difficulties facing the manufacturing sector in the province.”

The Canadian findings contrast sharply with the U.S. “where the quality of employment fell by 1.9% in 2007 and is now almost 12.5% below the level seen earlier this decade,” notes Tal.

“It seems that in Canada, the loss of manufacturing jobs is being offset by job gains in sectors with equivalent and higher employment quality. That’s not the case in the U.S. where the jobs now being lost in sectors such as construction/real estate and manufacturing are being replaced by lower quality jobs,” says Tal.

Looking ahead in 2008, Tal expects the employment quality trend to lose some momentum in the first half the year. “However, we expect the level of employment quality in Canada to remain elevated enough to support healthy income gains and further shield consumers from the chill coming from south of the border,” says Tal.