Business

Canada added 419,000 jobs in July, but is still 1.3M below pre-COVID-19 levels

Canada's economy added 419,000 jobs in July and the jobless rate dropped to 10.9 per cent.

Gain was in line with what economists had been expecting

Canada's economy is slowly starting to reopen after being shut down for COVID-19, and jobs are returning even amid new social distancing rules for places like restaurant patios. (Gabby Jones/Bloomberg)

Canada's economy added 419,000 jobs in July and the jobless rate dropped to 10.9 per cent.

Statistics Canada reported Friday that July's job gain, when added to the 953,000 in June and the 290,000 from May, still leaves Canada's economy with 1.3 million fewer jobs than it had in February, before widespread lockdowns to limit the spread of COVID-19 began. Put another way, that means the job market has returned to about 93 per cent of its previous capacity.

The jobless rate fell 1.4 percentage points for the second consecutive month and is now down from the record high of 13.7 per cent it hit in May. For comparison purposes, Canada's jobless rate was 5.6 per cent in February, before this ongoing pandemic began.

The data agency said 345,000 of the new jobs added in July were part-time. Only 73,000 were new full-time positions.

While every province added jobs, the recovery was led by Ontario with 151,000 new jobs, followed by Quebec with 98,000, B.C. with 70,000 and Alberta with 68,000 new jobs.

Every other province recorded a comparatively small gain of under 13,000 new jobs apiece.

Ontario was slower than most to reopen, so the job gains are a bit behind there, too. "Since Ontario's reopening has lagged a bit, it remains the furthest from pre-crisis job levels at 91.7 per cent," Bank of Montreal economist Doug Porter said.

"Not surprisingly, the provinces that had initially been less hard-hit by the virus have opened more quickly and are now boasting the lowest jobless rates in the country. Manitoba, Saskatchewan, New Brunswick all posted single-digit rates last month, along with Quebec," he said.

While it's good news that the economy is adding jobs in the aggregate, the underlying data highlights some major reasons for concern, especially when demographic breakdowns are considered.

Very uneven recovery

Visible minority groups appear to have been hit disproportionately hard by the economic toll of COVID-19. While Canada's overall jobless rate is 10.9 per cent, for the South Asian community it is 17.8 per cent, for the Arab community it is 17.3 per cent, and Black Canadians had a 16.8 per cent jobless rate during the month.

Compared to last July, the jobless rate has increased by 9.1 percentage points for South Asians, by 8.4 percentage points for Chinese Canadians, by 6.3 percentage points for Black Canadians and by 6.2 percentage points for Filipino Canadians.

Canada's Indigenous population was also effectively shut out of the job gains in July as employment was unchanged for Aboriginal people living off-reserve during the month.

Fitness instructor Ellen Fielding lost her job during the pandemic and she isn't expecting her income to get back to where it was before any time soon. (Jacqueline Hansen/CBC)

While there are new jobs for some, it's clear that even those lucky enough to find them can't pay the bills from them. Statistics Canada said almost one in five people in Canada's workforce were receiving the Canada Emergency Response Benefit, a program launched in April designed to support Canadians who have lost all or part of their income with up to $2,000 a month.

Half of the people on CERB in July were still working, but for significantly reduced hours or income. That includes Ellen Fielding of Toronto, who taught pilates and other fitness classes at various fitness studios prior to the pandemic, but has been getting by with the help of CERB and online classes, which pay far less.

"Because everything has closed down my job has disappeared," she told CBC News in an interview. "I have pivoted to teaching online, but the money is nowhere near the same and it won't be."

Other negative impacts

Fielding says she doesn't know what she'll do when those income supports run out, but she tries not to dwell on it too much because it's bad for her mental health. "The financial stress has been pretty difficult," she says.

And she's not alone in thinking that. Consultancy Deloitte recently warned in a report that Canada's economy needs to brace itself for dealing with the trauma of the current pandemic, both of those who have lost jobs and those who have managed to stay employed under incredibly trying circumstances.

"Long-term unemployment will be with us for quite some time before it starts going back to pre-recession levels," says Matt Laberge, one of the report's authors. "There are a lot people around us that are struggling right now."

The isolation of lockdowns coupled with the financial stress of lost income is going to have a negative impact on Canadians and the economy for a long time, which is why Deloitte is urging employers to come up with a plan to deal with the effects of the pandemic now and into the future.

"There will be human impacts of COVID-19 on Canadians," he said. "And they may be pretty sizeable."

About the Author

Pete Evans

Senior Writer, CBCNews.ca

Pete Evans is the senior business writer for CBCNews.ca. Prior to coming to the CBC, his work has appeared in the Globe & Mail, the Financial Post, the Toronto Star, Canadian Business Magazine and — believe it or not — Circuits Assembly Magazine. Twitter: @p_evans Email: pete.evans@cbc.ca Secure PGP: https://secure.cbc.ca/public-key/Pete-Evans-pub.asc

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