Service sector crucial for Canadian economy, Bank of Canada says
"Since the onset of the global financial crisis, growth in Canada's service sector has been stronger on average than in the goods sector," he said according to a prepared text.
"Most of the employment growth seen in Canada since late 2014 has been in service industries that pay above-average wages, helping to support national income."
Only less than 20 percent of Canadians produce goods, while more than 80 percent are employed in services.
The drop in export capacity before and after the financial crisis and a recent decrease in resource prices has resulted in the deficit of $80-billion to $90-billion in the Canadian economy, stated Poloz.
"It is natural to wonder: What will replace the economic losses due to these shocks," he said.
Poloz dismissed the idea of service jobs being low-skilled and low-paying and said that since January 2001 for every job lost in the goods producing sector, about 30 jobs were created in the service sector.
He pointed out that although the average wage in the service sector is lower than in the goods producing sector, wages in the service sector differ depending on the industry within the sector.
"It probably will not surprise you that the average wage in the finance and insurance industry is higher than that in manufacturing. But so is the average wage in the transportation and warehousing industry," he said. "And, together, those two industries employ more Canadians and produce more output than all of Canada's manufacturers."
Results for economic growth for the third quarter would be released by Statistics Canada on Wednesday.
Economists expect the report to show the growth of economy at an annualized pace of 3.4 percent in the third quarter, according to Thomson Reuters.
The result would ensue a decrease in the second quarter largely due to the forest fires in Alberta that led to the evacuation of Fort McMurray, Alberta, and the shut down of production in the oilsands.
(Reporting by Asha Bajaj, Image: Financial District Toronto Wikipedia)