Canada's economy is showing signs of weakening, which may give financial professionals pause.
On March 21, the Canadian dollar had its biggest drop since 1985 amid concerns that a slowing U.S. economy would reduce demand for commodities, says Bloomberg News. "We might see further weakness in the Canadian dollar if commodities continue to lose ground," Scotia Capital's Camilla Sutton told the news service. In addition, Canada's strong dollar has made Canadian exports expensive in overseas markets, leading to factory job cuts in Ontario and Quebec.
In other developments, Toronto-Dominion Bank became the first Canadian bank to forecast a contraction in the economy. Its chief economist, Don Drummond, told the Vancouver Sun Canada will come "pretty darn close" to a recession. "Recession or not, it doesn't really matter," Drummond said. "It's basically as flat as you can get."
Toronto-Dominion expects Ontario to bear the brunt of the slowdown. "The west will remain in the best shape to weather the economic headwinds, while central Canada - and notably Ontario - will be in the worst," Drummond said in a press release.
For now, however, the job market in Toronto isn't feeling the impact of a slowdown, says Dave King, executive vice president for financial services at Robert Half International.
"Statistically, we continue to have a vibrant economy," he tells eFinancialCareers News. Indeed, the latest jobs data shows Canada gained jobs in February, even as the U.S. lost them. "We continue to see some pretty strong demand in the professional services sector (and) probably are not seeing as much demand in construction."
Lower Pay, Higher Taxes
But the financial services sector already was having difficulty attracting top talent before the current slowdown. A study released in 2007 by the Toronto Financial Services Alliance and Deloitte forecast major gaps in "critical talent" as baby boomers retire and the industry is challenged to replace them.
"Increasingly, financial sector employers will have to look outside our borders for talent," the Alliance said on releasing the study. At the same time, the study found Toronto's "financial rewards" weren't enough to "some attract international talent." Lower compensation and higher taxes "make it difficult to entice U.S. talent across the border. European talent frequently sees Canada as a stepping stone and moves to the U.S. at the first opportunity," the Alliance reported.
King agrees with that assessment and notes U.S. citizens don't often venture to the Great White North for employment. However, many Canadians are returning home from the U.S. and other counties because of the strength of Canada's economy. "There's always some cross border activity," King observes. "I haven't seen any spike in interest of U.S. citizens coming to Canada at this stage."
Like other recruiters, King hasn't noticed a drop-off in hiring though he's seen clients "apply additional due diligence." That's why financial professionals need to be cautious, and take nothing for granted about either a current job or a potential future one. King also advises people keep up their networks of professional contacts and to reacquaint themselves with recruiters with whom they may have worked in the past.
He also recommends people make sure their professional certifications are up to date.