For the second straight month, the Canadian economy lost jobs, as pandemic restrictions continued to cool the country’s labour market.
Statistics Canada’s Labour Force Survey, a monthly report on employment gains and losses, showed the economy shed 68,000 jobs in May, slightly increasing the unemployment rate to 8.2 per cent from 8.1 per cent in April, when the economy lost 207,000 jobs.
The news came as no surprise to economic experts.
“I don’t think this is a surprising increase in the unemployment rate, given the new lockdowns that were happening while this (survey) was being taken,” i.e., from May 9 to 15, said David Macdonald, a senior economist at the Canadian Centre for Policy Alternatives.
“Hopefully, this marks the last time we see a big reduction in employment due to renewed lockdowns.”
The biggest takeaway for Pedro Antunes, chief economist at the Conference Board of Canada, is that Canada is “still a long ways from normal.”
Overall, employment in May is three per cent below pre-pandemic levels.
“By any … comparison to the world (before) COVID-19, that would be a big recession,” Antunes said.
Most of May’s losses were concentrated in Ontario and Nova Scotia, largely a result of stringent public health measures in both provinces. The two jurisdictions lost 32,000 and 22,000 jobs, respectively. Quebec, Newfoundland and Labrador, and New Brunswick also lost jobs.
Employment levels didn’t change change much in the remaining provinces. Saskatchewan posted some gains across industries for the second consecutive month, while Prince Edward Island also had modest gains in May.
The provincial results “reveal a divergent picture, which continues to closely reflect the state of the pandemic in each region,” Liam Daly, an economist at the Conference Board of Canada, said in a news release.
The unemployment rates in Nunavut and the Northwest Territories fell by 1.2 and two percentage points, respectively, while the Yukon’s increased slightly, by 0.6 of a percentage point.
Like the differences among provinces, some industries made big gains while others continued to suffer.
The number of people working in manufacturing in May fell by 36,000, a two per cent drop largely concentrated in Ontario and Quebec, marking the first decline for the sector since April 2020. A preliminary estimate from StatCan’s monthly survey of manufacturing suggests manufacturing sales fell 1.1 per cent in April. Manufacturing employment returned to pre-COVID levels in September 2020, but hasn’t grown much since.
The construction industry lost 16,000 workers, a 1.1. per cent drop, driven by public health restrictions in Ontario implemented on Apr. 17. The industry employed 55,000 workers in May, which is 3.7 per cent below pre-COVID levels.
Antunes isn’t particularly worried about the construction-job losses. He said the sector has been doing relatively well during the pandemic due to an increase in residential-housing repairs and renovations.
“I think that’s going to continue, so we may have a little blip here,” he said.
Transportation and warehousing were also hiring, to the tune of 22,000 jobs, mainly in Ontario and Saskatchewan, while 8,600 natural-resources jobs were added, mostly in Alberta.
Natural resources is the industry furthest along in its recovery, as employment levels have actually surpassed pre-COVID levels by 9.3 per cent, or 29,000 jobs. Oil prices rose in the fall and winter of 2020, and have remained fairly consistently near pre-pandemic levels in recent months.
Most of the overall decline in employment numbers, a total of 54,000 jobs eliminated in May, was driven by part-time employees losing work, particularly women aged 25 to 54, and men aged 15 to 24.
Different population groups, different outcomes
While the overall unemployment rate rose by less than half a percentage point, the unemployment rate for people StatCan classifies as visible minorities increased by 1.5 percentage point, to 11.4 per cent in May. StatCan doesn’t include Indigenous people in its visible-minority category.
Racialized Canadians most likely to lose their jobs were Filipino, Chinese, and South Asian, bringing each group’s overall unemployment rate into double digits.
The unemployment rate of Canadians who aren’t Indigenous or a member of a visible minority fell by o.6 percentage points, to seven per cent.
Labour market shrinks
Nearly 50,000 people, whom StatCan calls “discouraged workers,” said they wanted a job, but didn’t look for one in May. If the survey had included them, the adjusted unemployment rate in May would have been 10.7 per cent, StatCan said.
By excluding them, the top-line unemployment number “under-counts those groups (who) want to work full-time but only get part-time hours, or they just think there’s no point in looking for work,” Macdonald said.
“And this (will) be common, if you’re in retail or food and accommodation. There are no jobs, so what would be the point of looking for work?”
Long-term unemployment, defined as being without work for 27 weeks or more, held steady, at nearly half a million people in May. That’s up 167 per cent from pre-pandemic levels, and is a real cause for concern, said Leah Nord, senior director of workforce strategies and inclusive growth at the Canadian Chamber of Commerce.
“Those are real people,” she said. “The longer you’re out of the workforce, your skills atrophy (and) you get discouraged. Those are real concerns.”