September 15, 2014 / 6:05 PM / in 3 years

Canadian PM says anemic job market poses significant challenges

OTTAWA (Reuters) - Canada’s anemic job market poses “significant challenges,” Prime Minister Stephen Harper acknowledged on Monday, while promising new measures this year to help boost the economy.

Motorized mannequins hold signs that read "Hire Me" in Toronto May 23, 2014. REUTERS/Mark Blinch

Harper’s right-leaning low-tax Conservatives, who are trailing in the polls ahead of an election scheduled for October 2015, portray themselves as the only party that can be trusted to maintain economic stability in the wake of the 2008 recession.

But that claim could be undermined by a job market that has sputtered over the last 18 months.

The 12-month gain to August was just 81,300 jobs, or 0.5 percent, while the labor participation rate slipped to 66.0 percent, the lowest since November 2001. Canada’s unemployment rate was 7 percent in August.

“There are still significant challenges in our labor market,” Harper told a meeting of Conservatives on the day the House of Commons resumed business after a summer break.

He did not give more details. Last week Ottawa said small business would get C$550 million ($500 million) in rebates on their employment insurance premiums over the next two years in order to boost hiring.

Finance Minister Joe Oliver is due to present an economic update later this year. Governments in the past have used the occasion to announce measures such as tax cuts.

“I look forward to the economic and fiscal update ... when we will be taking the first steps in the next part of our Conservative plan for Canadians,” said Harper.

The Conservatives are promising the budget will be balanced when the next full budget is delivered early next year.

Asked about speculation that Oliver could announce tax cuts this year, a government source said “we will provide tax relief for Canadian families when we have balanced the budget.”

Polls show the Conservatives would lose the next election to the opposition Liberals of Justin Trudeau if it were held now. Harper made no mention on Monday of Trudeau, the 42-year-old son of flamboyant former prime minister Pierre Trudeau.

In speeches to party members over the summer, Harper repeatedly criticized Trudeau for not having enough experience to become prime minister.

The Liberals have far fewer seats in the House of Commons than the official opposition New Democrats, who surged to a surprise second place in the May 2011 election but who have fallen back in the polls since then.

($1=$1.10 Canadian)

Reporting by David Ljunggren; Editing by Chris Reese

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