Good News for Canadian Banks May Not Help Job Seekers

The Canadian securities industry continues to bask in the glow of positive publicity. Whether that translates into job gains in finance remains to be seen.

Canada had its biggest monthly gain in employment in at least 30 years in September, as employers added 106,900, about 10 times more than what economists had predicted, according to Bloomberg News. A survey from the Investment Funds Institute of Canada found that 78 percent of holders remained confident of mutual funds as investments. And, the World Economic Forum declared Canada had the most stable banking system in the world.

Talk also continues to heat up about Canadian banks purchasing distressed financial institutions in the U.S. The Financial Post reports the U.S. Federal Reserve was reaching out to Canadian financial institutions, approaching banks with U.S. holdings, such as Toronto-Dominion Bank and Royal Bank of Canada.

Bank Hiring Seen Holding Steady

Job hunters, however, should keep these events in perspective.

Though the job figures look impressive, Bodi Ganguli of Moody's Economy.com notes that much of the gain came from part-time employment. Ganguli, who is based in West Chester, Pa., doesn't expect Canadian banks to significantly beef up their hiring any time soon. "They are going to pretty much stay at the current level," he tells eFinancialCareers News.

Toronto-based recruiters have made similar statements, although there are some exceptions. Canadian Imperial Bank of Commerce, for example, is rebuilding its CIBC World Markets investment banking business. Other firms continuing to hire include Scotia Capital and the Canadian Pension Plan Investment Board.

Even though sub-prime mortgages are rare in Canada, banks have their share of problems. The Canadian government this week agreed to buy $25 billion (Canadian) in mortgage-backed securities in order to free up the clogged credit market. Prime Minister Stephen Harper is quoted in The Star as saying the deal is "good for Canada."

Ties With U.S.

Canadian financial firms continue to be attracted to the U.S. because of the Canadian currency's relative strength against the U.S. dollar. TD Bank, which acquired New Jersey-based Commerce Bank last year, reportedly was interested in buying Washington Mutual. On the insurance side, Sun Life is "weighing the likelihood of an intervention in the U.S.," according to the Financial Post.

Many economists don't expect the good times to last, particularly as other areas of the Canadian economy weaken due to weakening exports to the U.S. Economists at the Royal Bank of Canada recently lowered their 2008 growth outlook for the country to 0.9 percent from 1.4 percent. Growth is forecast to rebound slightly next year to 1.5 percent.