E Canada’s Employment Outlook Is Quite Bleak

Because of the pandemic, Canada's employment outlook is quite bleak. Nonetheless, the losses over the past year have not been as deep as in the U.S. Canada’s recovery has a long way to go to restore former employment levels.

As was the case in the US, the Canadian job market ended last year with rather discouraging economic statistics. 

Canada’s economy shed 62,600 jobs in December, as the second wave of the pandemic resulted in many parts of the economy once again locking down and/or tightening up.

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As of December, total Canadian employment was 571,600 (or 3%) below from year-ago levels, representing the deepest annual decline since 1982.

While the following comparison can provide little satisfaction, the comparable y/y job loss in the US was 5.6%.

Even though the Canadian job slump may not seem as steep as the American, a loss of 571,600 jobs is still an enormous hardship. Nonetheless, Canada’s job market in December was still far better off than its worst reading last April when the y/y decline was 15%.  

Finally, because of second wave employment restrictions, the December employment levels in virtually all provinces except Newfoundland was significantly lower than the former pre-pandemic levels. And of course, the large cities bore the brunt of the job losses.

Ironically, the worst pandemic hit provinces based on year over year job losses were all in Western Canada - Alberta, Saskatchewan, and Manitoba. 

In closing, as in the US, the job losses in Canada have disproportionally affected some groups more than others. (e.g., The self-employed, temporary, and low-pay workers, youth, and women). But because job losses have been heavily concentrated in the service sector industries, the Canadian recession has been described as a “she” recession.

Indeed, as the following charts illustrate, a future economic recovery from the pandemic has a long way to go simply to restore former employment levels. 

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