TORONTO (AP) -- Canada's finance minister said the country will have substantial job losses this year after it lost more than 100,000 jobs in the final two months of 2008.
Statistics Canada reported Friday the unemployment rate jumped to 6.6 percent in December as the country shed 34,400 jobs. It is the second large monthly job loss in two months, following November's bigger than expected 71,000 contraction.
More worrying for Canadians was the large decrease in full-time employment as 70,700 jobs were cut in December. The shrinkage was partially offset by a gain of 36,200 in part-time work.
Finance Minister Jim Flaherty said the numbers show Canada is in for a very difficult year.
"We are going to have substantial job losses," Flaherty said.
"We are fortunate, relatively speaking, that our economy is in better shape, and our government finances are in much better shape than other countries, in particular the United States. The unemployment figures in the United States are in excess of 2 million jobs lost. These are staggering numbers in the United States."
The U.S. economy shed 524,000 jobs in December and lost a net total of 2.6 million jobs in 2008, the most since 1945.
About 80 percent of Canada's trade is with the U.S.
Flaherty said he'll announce a stimulus package when he presents a federal budget on Jan. 27. Opposition parties have vowed to topple the Conservative government if a significant stimulus package is not announced.
Flaherty suggested there will be tax cuts and money for infrastructure and said the government will run a substantial deficit this year. Canada has run a surplus for a number of years, the only G7 country to do so in recent years.
"The deficit will be substantial," Flaherty said. "We need to respond to the needs of people who will lose their job this year."
Flaherty said his top concern is the lack of access to credit and financing.
"We quite frankly need the banks to help fill that gap," Flaherty said.
High commodity prices propped up resource-rich Canada in the first half of last year, but the subsequent broad commodity decline has slowed Canada's economy in recent months.
Canada's oil-rich province of Alberta showed the sharpest decline of any province last month with 16,000 fewer jobs, all full-time.
For the year, Statistics Canada said the country gained 98,000 jobs, far fewer than the 358,000 gained in 2007 and all in part-time work.
The December report presents a picture of an economy that had been doing well until the latter part of the year, with manufacturing, sales and construction activity taking a plunge in the face of the spiraling financial crisis.
"From the record low 5.8 percent in early 2008, the unemployment rate climbed 0.8 percentage points by the end of the year, with most of the increase occurring in the last quarter," Statistics Canada noted.
The latest sector to be hit was construction as the industry lost 44,000 jobs in December as housing starts dipped to the lowest level in seven years the previous month.
"Canada has firmly lost its job market resilience," said Derek Holt, vice-president of economics at Scotia Capital.
"One hundred thousand jobs have been lost in only two months, which now almost fully reverses the large late summer employment gains, and puts Canadian job losses proportionately more in line with the U.S. experience."
