VZCZCXRO9271
PP RUEHGA RUEHHA RUEHMT RUEHQU RUEHVC
DE RUEHOT #0212 0722033
ZNR UUUUU ZZH
P 132033Z MAR 09
FM AMEMBASSY OTTAWA
TO RUEHC/SECSTATE WASHDC PRIORITY 9220
INFO RHEHAAA/WHITE HOUSE WASHDC
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC
RUCPDOC/USDOC WASHDC
RUEATRS/DEPT OF TREASURY WASH DC
RUEHME/AMEMBASSY MEXICO 1948
RUCNCAN/ALL CANADIAN POSTS COLLECTIVE

UNCLAS OTTAWA 000212 
 
STATE FOR E, EB/DCT, WHA/EX, WHA/CAN 
 
STATE PASS USTR (SULLIVAN) 
 
COMMERCE FOR ITA/MAC (WORD) 
 
TREASURY FOR IA (NEPHEW) 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN ETRD EINV EIND PREL PGOV CA
 
SUBJECT: High unemployment rates speed passage of Canadian budget 
bill 
 
Ref:   Ottawa 0080 
 
SENSTIVE BUT UNCLASSIFIED.  PLEASE PROTECT ACCORDINGLY 
¶1. (SBU) Summary: The combination of worse-than-expected 
unemployment numbers and high unemployment in key opposition 
Parliamentary ridings put pressure on Liberal Senators to pass 
budget and stimulus legislation quickly and with less than the usual 
level of rancor.  The budget legislation received Royal Assent on 
March 12, 2009.  End Summary 
¶2. (U) On March 13, 2009, Statistics Canada released its monthly 
unemployment data confirming earlier rumors of a worse-than-expected 
employment situation. In February, Canada's unemployment rate rose 
to 7.7 percent, reflecting a net job loss of 82,600 and a 0.5 
percentage point increase from January's 7.2 percent level. 
¶3. (U) Ontario suffered the largest decline in employment, losing 
35,300 jobs, followed by Alberta (down 23,700 jobs) and Quebec (down 
18,400 jobs). The construction sector alone lost 43,200 jobs, 
accounting for over half the decline in overall employment. Other 
big losers were professional services (e.g., engineering and 
construction), educational services, and natural resource 
extraction. 
¶4. (U) On the positive side, manufacturing job losses halted their 
downward slide, adding 25,000 new jobs in January, many of them in 
the food processing industry. This increase does little, however, to 
offset the more than 100,000 Canadian manufacturing jobs that have 
disappeared since February 2008.  Further jobs may also be lost once 
the automotive sector reveals its restructuring plans at the end of 
March. 
¶5. (SBU) Rumors of weaker than expected employment numbers 
reportedly helped accelerate Parliament's passage of the federal 
budget. The Budget Implementation Bill (C-10) will release more than 
C$40 billion in economic stimulus (reftel).  The Bill had cleared 
the House of Commons on March 4, but the Senate had originally 
intended to study the bill for at least two more weeks, and 
observers did not expect final passage until the end of the month. 
¶6. (SBU) A second factor likely contributing to the Bill's quick 
passage is C-10's measures providing an extra five weeks of 
unemployment insurance benefits to out-of-work Canadians. The 
additional benefits became available immediately to eligible 
claimants once the Bill received Royal Assent.  Liberal Senators - 
unhappy with other elements of C-10 such as pay equity (ensuring 
that women receive equal pay for work of equal value) - reversed 
their position after criticism that delay would deny Canadians 
access to extended unemployment benefits.  As a compromise, senators 
will study and report on these non-stimulus elements further in 
committee. 
¶7. (SBU)  Comment: Ottawa watchers note that the passage of budget 
legislation in only seven weeks is highly unusual. They cite high 
unemployment rates in key Liberal ridings as contributing to the 
Senate's quick approval.  As important was the firm hand taken by 
new Liberal leader Michael Ignatieff who stated "A Liberal will 
never come between an unemployed worker and the employment insurance 
that he or she needs." End comment