Canada lost almost two million jobs during the month of April, a record high, as the impact of COVID-19 on the economy made itself known.
Statistics Canada’s Labour Force Survey data released Friday brings the total number of jobs lost during the crisis to more than three million.
The closure of non-essential services to slow the spread of COVID-19 has devastated the economy and forced businesses to shutter temporarily.
Statistics Canada says the unemployment rate soared to 13 per cent as the full force of the pandemic hit, compared with 7.8 per cent in March.
Economists on average had expected the loss of four million jobs and an unemployment rate of 18 per cent, according to financial markets data firm Refinitiv.
Douglas Porter, chief economist with BMO Economics, said those high projections could be tied to reports that more than seven million Canadians had applied for the Canada Emergency Response Benefit (CERB).
“The 5.2 percentage point rise in the jobless rate was considerably less than expected, and massively smaller than the 10.3 percentage point spike in the U.S. jobless rate,” he said in an emailed statement.
People line up at a Service Canada office in Montreal on March 19. Statistics Canada says the rapid decline of jobs due to the pandemic is unprecedented. (Paul Chiasson/The Canadian Press)
Since comparable data became available in 1976, the April unemployment rate was second-highest only to December 1982, when it reached 13.1 per cent.
“By most accounts, unemployment soared to over 25 per cent during the worst of the Great Depression, as high as 30 per cent by some measures,” said Porter.
The rapid decline in employment is unprecedented, Statistics Canada says. The decline since February (-15.7 per cent) outpaces previous financial crises, including the 1981-1982 recession, which resulted in a drop of -5.4 per cent over 17 months.
“Today’s job numbers start to complete the picture of just how devastating the COVID-19 crisis has been to the Canadian labour market,” said economist Brendon Bernard of job site Indeed Canada in an email.
“While April’s decline was a bit more modest than expected, that 6.4 per cent of all Canadian adults could lose employment in a single month is staggering.”
Fewer hours for many who are still working
Job losses are not the only way the COVID-19 crisis has impacted employment. In addition to those who are now out of work, the number of people who were employed but worked less than half their usual hours because of the pandemic increased by 2.5 million from February to April.
That means the cumulative effect of the economic shutdown — people both no longer employed or working far less — was a staggering 5.5 million as of the week of April 12.
All provinces have been hard hit by the crisis. Employment dropped in all provinces for the second month running, with losses of more than 10 per cent everywhere.
Quebec had the worst losses in April at -18.7 per cent, or 821,000 jobs..
Here are the jobless rates last month by province (numbers from the previous month in brackets):
As for Canada’s three territories, due to logistical challenges, Statistics Canada’s Labour Force Survey methodology is somewhat different there than in the rest of Canada, said Bernard.
“Employment rates in the territories haven’t been hit as hard as the rest of Canada. That said, Nunavut saw a noticeable drop in the share of the population with a job in April, a sign of how public health concerns and economic uncertainty have extended beyond just the pandemic’s hot spots.”
There is evidence to suggest, however, that many pandemic-related job losses are temporary.
In the month of April, almost all of the newly unemployed — 97 per cent — were on temporary layoff, indicating they expect to return to their previous places of work as the shutdown is relaxed.
Vulnerable workers most affected
Losses continued to be more rapid in jobs with less security and poorer pay.
Over the two-month period since February, overall employment (not adjusted for seasonality) declined 17.8 per cent.
But it was above average among employees with temporary jobs (-30.2 per cent) and those who had been in their jobs one year or less (-29.5 per cent).
Declines were sharper for employees earning less than two-thirds of the median hourly wage of $25.04 (-38.1 per cent) and those paid by the hour (-25.1 per cent).
Statistics Canada said this is consistent with job declines observed in accommodation and food services, and wholesale and retail trade, which tend to be more precarious and lower paying.
Small companies hardest hit
Smaller companies — defined as those with fewer than 20 employees — have shed 30.8 per cent of their workers, medium-sized firms have let 25.1 per cent of workers go, and large companies have seen employment decline by 12.6 per cent.
Hard-hit sectors at the outset include retail, hotels, restaurants and bars, which continued to see losses in April. The losses in the service sector also continued in April, down 1.4 million, or 9.6 per cent, Statistics Canada says.
Proportionally, the losses were greater in goods-producing sectors like construction and manufacturing, which combined lost 621,000 jobs for a drop of 15.8 per cent after being virtually unchanged in March.