Employment in Canada increased for a 13th consecutive year in 2005, the longest stretch of employment gains since the large-scale increases of the 1960s and 1970s, avering 2% annual growth, according to a new report on Canada’s labour market released by Statistics Canada on Thursday.

However, even though jobs were readily available last year, people took themselves out of the labour market, leading to a rapid tightening of labour market conditions.

About 17.3 million people were in the labour market last year, 67.2% of the working-age population, a decline of 0.3% from 2004. Previously, the participation rate had increased every year between 1996 and 2003, and had held steady in 2004. Much of the decline in 2005 was the result of aging baby boomers, adult women and young people leaving the labour force.

With demand for labour strong and supply conditions tightening, the unemployment rate fell in 2005, hitting 6.8%, the lowest annual unemployment rate since 1976.

Meanwhile, the employment situation for older workers aged 55 and over has become increasingly brighter. Last year, 29.9% of this population had jobs, up from 29% in 2004, the ninth consecutive annual increase in their employment rate since hitting a low of 22% in 1996. Some of these gains have been due to the influx of baby boomers into this group.

At the same time, more workers are nearing retirement than ever before. In 2005, an estimated 3.6 million workers were within 10 years of (or older than) the median retirement age of 61. They represented 22.1% of the total, up from 10.3% in 1986.

Oil-rich Alberta has consistently enjoyed the highest employment rates in Canada during the past three decades. The province’s employment rate — the share of the population 15 and over who are employed — fell slightly in 2005, from the record high attained in 2004, to 69.8%, yet remained among the highest experienced by the province in almost 30 years. These high employment rates reflect the upward trend in job growth that began in the early 1990s.

In British Columbia, the employment rate has hovered around 60% since 1989, avoiding the drop experienced by several other provinces during the early recession of the 1990s. In 2005, British Columbia’s employment rate hit a record 61.8% as a result of a 3.3% gain in employment, the fastest growth rate among the provinces.

However, people living in the Yukon and Northwest Territories were more likely to be working in 2005 than in any province. In the Yukon, 72.1% of the population aged 15 and over were employed in 2005, almost identical to the 72.3% in the Northwest Territories. Both rates were well above the national average of 62.7%.

For the last three years, Canada’s employment rate has remained at record levels, surpassing employment rates in the United States.

Last year, 63.4% of the Canadian population 16 and over was employed, adjusted to compare with U.S. labour statistics, compared with 62.7% of the American population.

Between 2003 and 2005, employment rose 2.9% in the U.S., but this was still slightly below the growth of 3.2% in Canada. Although Canada lost manufacturing jobs during this period, its employment growth was strong in many other sectors. This was the case particularly in construction, retail and wholesale trade, finance, insurance, real estate and leasing and educational services.

Canada’s unemployment rate, adjusted to the U.S. definition of unemployment, has dropped in the last 12 years, from a high of 10.8% in 1993 to an all-time low of 6% last year while the US unemployment rate fell from a high of 7.5% in 1992 to a low of 4% in 2000. It then climbed to 6% in 2003, and by 2005, it was down to 5.1%.

These recent changes in unemployment rates have narrowed the gap between the two countries. During the last four years, Canada’s rate has been within one percentage point of the U.S. rate. The last time the gap was so small was in 1982.