Source: The Canadian Press

Canada hasn’t recouped all the jobs lost in the recession after all, Statistics Canada said Friday in a revision that undercuts some of the government’s claims about the economy’s strength.

The official statistical agency now says Canada lost more jobs in the 2008-09 recession than previously reported, and has created fewer jobs so far in the 18 months since the recovery began.

The revision means there were still 30,000 fewer Canadians working as of December — the last month for which there is data — than was the case in October 2008 when the slump hit in response to a U.S.-led global credit crisis.

Canada’s employment growth has been one of the strongest among the advanced economies, surpassing all expectations and even the rate of growth in the economy. That is still the case, but not by as much as previously thought.

“Most of us were shaking our heads in disbelief early last year with the size of the employment growth,” said Douglas Porter, deputy chief economist of BMO Capital Markets.

“Most of us thought it was too good to be true and it turns out it was too good to be true.”

Previously, the agency estimated that 465,000 jobs had been created since the bottom hit in July 2009, more than the 417,000 lost in the slump.

The new numbers show there were 428,000 jobs lost in the downturn and to date, 398,000 created in the recovery.

Still, Porter and other economists say that Canada’s jobs growth, even after the revision, remains an important feature of the recovery and far more robust than what has occurred in the United States.

The gap between previously reported figures and current numbers amounts to 67,000 jobs, which represents a small fraction of the over 17 million employed.

But the revision eliminates, for now, a key talking point Prime Minister Stephen Harper and Finance Minister Jim Flaherty have repeatedly used to fend off opposition attacks on their handling of the economy.

Harper and Flaherty had stressed that Canada was the only country in the Group of Seven (Canada, France, Germany, Italy, Japan, United Kingdom and United States) to have recovered all the jobs it had lost.

The Statistics Canada revision comes as the federal parties get themselves ready for an early election if the minority government is defeated before its full, four-year term ends in late 2012.

In an email response from Davos, Switzerland, the finance minister stressed that Canada’s employment growth remains the strongest in the G7, and that the revisions do not effect the unemployment rate, which stayed at 7.6%.

“We know that there are still too many people looking for work. Our government is working on their behalf to create jobs and economic growth across Canada,” Flaherty said.

Liberal critic Scott Brison, also in Davos, said in a telephone interview that the revision is more in line what Canadians households have been experiencing.

“The reality is that more Canadians are looking for work now than before the government’s stimulus package,” Brison said. “A lot of families are struggling, they have lost full time jobs and replaced them with part-time work.”

Statistics Canada annually reviews its employment data, as well as other indicators, and has often revised previously reported numbers.

The changes also impact assumptions about the distribution of job creation in Canada.

Four provinces had employment levels lowered by greater than one per cent –New Brunswick by 2.4%, British Columbia (1.9), Newfoundland (1.8), and Prince Edward Island (1.1). Alberta’s employment rate rose by 0.8%.

The latest revision, the agency said, came about because it switched from using 2001 census to 2006 census numbers, which had the effect of lowering population estimates and workforce size by about 0.3%.

That means that there are almost 100,000 fewer Canadians in the workforce, and about 13,000 fewer officially unemployed.

CIBC economist Avery Shenfeld said Canadians should still have confidence in the agency to accurately measure economic indicators.

“The same process has to take place in virtually every statistical agency, including the U.S., and historically Statistics Canada has actually a better track record,” Shenfeld said.

The agency’s chief of economic analysis, Philip Cross, said the changes in employment levels does not effect calculations about the country’s gross domestic product output over the past few years.