Employment in Canada falls for the first time since April

Mohanad Moetaz
Published: January 17, 2021

For the first time since April 2020, employment fell by 63,000 jobs in December, equivalent to 0.3 per cent.

COVID-19 restrictions across the country are impacting Canada’s labour market.

In December 2020, 1.1 million workers in Canada were negatively affected by the economic shutdown in place to curb the spread of COVID-19. This number was 5.5 million in April 2020.

Part-time employment dropped by 99,000, or 2.9 per cent in December. Many of those who lost their part-time employment are young people aged between 15 and 24, as well as those aged 55 and older. In addition, self-employment fell by 62,000. The number of self-employed people is now the lowest it has been since the beginning of the pandemic – 6.8 per cent lower than it was in February.

The unemployment rate was 8.8 per cent in December, practically unchanged from November when it was 8.5 per cent. In February, the unemployment rate was 5.6 per cent.

Employment in the services-producing sector decreased for the first time since April. Employment fell by 74,000 in December. This number is greater than the overall loss in jobs in December, meaning that other sectors may have had an increase in employment. The loss in employment in this sector is seemingly because of tightened public health measures that saw industries such as accommodation and food services, and information, culture and recreation, negatively impacted.

In contrast, manufacturing employment increased by 15,000 in December.

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Provincial labour markets affected by public health measures

The different public health measures implemented in the different provinces are reflected in the conditions of the provincial labour markets.

Employment went down in Nova Scotia, Manitoba, Saskatchewan and Prince Edward Island. The employment rate stayed the same in six other provinces.

Ontario saw a monthly average employment growth of 2.2 per cent from June to November. In December, however, employment growth was stalled.

Employment in Quebec did not change for the third month in a row, with tight public health measures in place since October. Quebec tightened measures further in January 2021, by introducing a province-wide curfew between 8 p.m. and 5 a.m. This measure may negatively impact Quebec’s employment rate.

No loss of employment was registered in the territories. In Yukon, employment increased by 800 people in the fourth quarter of 2020. Employment in the Northwest Territories increased by 1,300 in the same period. In Nunavut, employment held steady.

Many Canadians still job hunting

The labour underutilization rate was at 17.1 per cent in December practically unchanged since November. The rate has been decreasing since April, when it was 36.1 per cent.

This rate reflects the proportion of people who are in the potential labour force, but are either unemployed, employed but working less than half of their usual hours, or want a job but are not searching for one.

A total of 41.2 per cent of labour underutilization were those looking for work. A further 36.4 per cent were unemployed but were working less than their usual hours. Those who wanted a job but were not actively searching for one made up another 14.3 per cent. The rest were laid off temporarily, or were planning to start a job in the near future.

Increasing levels of working from home

One of the main impacts COVID-19 has had, is the increasing number of people who are working from home. This is to balance employment as well as health and safety.

Working from home is at high levels in industries where there is little to no need to go into work. Examples include the finance, insurance, real estate, rental and leasing industries as well as the public administration industry.

The proportion of people working from home decreased between its peak of 41.6 per cent in April, to 25.6 per cent in September.

Since COVID-19 public health measures have been tightened as a response to the rising number of COVID-19 cases, the number of people working from home increased up to 28.6 per cent in December.

In occupations where physical proximity is crucial, such as in the accommodation and food services industry, working from home is less widespread.

CORRECTION: Following an update from Statistics Canada, the unemployment rate in December changed to 8.8 per cent. A previous version of this story said that it was 8.6 per cent. 

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