Business

Canada lost more than 1 million jobs last month as COVID-19 struck

Canada's economy lost more than a million jobs in March, Statistics Canada says, pushing the jobless rate up to 7.8 per cent.

Economists had been expecting about half a million jobs to be lost

A sign in a store in Ottawa shows the business has temporarily closed down this month, a trend that saw more than one million Canadians lose their income in March. (Francis Ferland/CBC)

Canada's economy lost more than one million jobs in March, Statistics Canada said Thursday, pushing the jobless rate up to 7.8 per cent.

Economists had been expecting the figure to come in at around 500,000 jobs lost, which already would have been the worst month for job losses on record.

Every month, the data agency surveys Canadians over the course of a single week to come up with its employment number for the month.

March's data is culled from surveys in the week that started March 15 — a tumultuous week for Canadian society, as within seven days, Canadians went from packing for March break vacations to sheltering in place as businesses across the country locked themselves down to try to contain the spread of COVID-19.

According to Statistics Canada, 19.2 million Canadians had paid work in February before the coronavirus hit Canada with full force. A month later, barely 18 million still had jobs.

Watch: 'This will be the new normal until a vaccine is developed,' says Trudeau:

'This will be the new normal until a vaccine is developed': Trudeau

Politics

8 months agoVideo
1:55
Prime Minister Justin Trudeau says it will take months of Canadians' "continued, determined effort" to follow pandemic measures such as physical distancing to overcome COVID-19. 1:55
 

The real picture could be even worse

The true employment picture is likely even worse. The data agency notes that on top of the one million people who became officially unemployed during the month, another 1.3 million Canadians worked no paid hours because of lockdowns but technically still considered themselves to have jobs.

Another 800,000 Canadians worked less than half of their usual workload.

And a further 219,000 people had a job in early March but were deemed to be no longer in the labour force by the time the survey week came around.

"They were not counted as unemployed because they did not look for a job," Statistics Canada said, "presumably because of ongoing business shutdowns and the requirement to socially isolate."

The loss of jobs in March 2020 completely obliterated the previous record, set in January 2009. (CBC)

If those people were considered to be unemployed, Canada's official jobless rate would have been 8.9 per cent for the month. As it stands, the official jobless rate spiked by 2.2 percentage points to 7.8 per cent. That's the biggest monthly increase in the jobless rate in records that date back to 1976.

Statistics Canada says the closest comparable dramatic decline in economic activity and employment the country saw last month was likely the 1998 ice storm that saw businesses in Ontario and Quebec suddenly close up shop.

The ice storm caused 166,000 people in Canada to temporarily lose all or most of their paid work. Last month's number was eight times higher than that.

Prior to Thursday's numbers, the worst month ever for Canadian jobs lost was January 2009, when the economy lost 124,400 jobs. March 2020's numbers obliterated that figure.

COVID-19 has plunged paid work in Canada into a deep-freeze eight times worse than the temporary one seen after the 1998 ice storm, depicted here in this scene from Montreal at the time. (Ryan Remiorz/The Canadian Press)

The biggest chunk of job losses came in the accommodation and food services sector, which shrank by almost one-quarter. The next hardest hit sector was IT, arts and culture, which lost 13 per cent of its jobs. Education took a nine per cent hit, while wholesale and retail trade lost seven per cent.

Just about every sector lost jobs, except natural resources and agriculture, which added nearly 7,000 jobs as activity ramped up to keep Canada's food supply chain robust.

Jobs in restaurants, hotels and retail made up about half of all the job losses, and jobs that were lower paying to begin with were more likely to get cut during the month.

Almost half the jobs lost were positions that paid less than two-thirds of what the average worker gets paid, as 496,000 people the data agency considers to be low-wage workers lost all or most of their paid work during the month. 

"The first workers to experience job losses as a result of COVID-19 are among those least able to withstand economic hardship," Statistics Canada said.

Young people and women were also disproportionately affected, with people between the ages of 15 and 24 losing 392,500 jobs during the month, and women in their core working years, between 25 and 54, losing 298,500 jobs.

The ice storm analogy may be an apt one, as economists get their first glimpse at the chill that has settled over Canada's economy in recent weeks.

"Today's numbers are just a first snapshot of the deep-freeze that's hit the Canadian labour market," said Brendon Bernard, an economist with online job marketplace Indeed.

"After a month of social distancing, a colossal drop in Canadian employment comes as no surprise, but its steepness is still shocking."

Every province lost jobs, but two-thirds of the damage came in Ontario and Quebec, which lost 403,000 and 264,000 jobs respectively.

The stunning job losses mean that 40 months' worth of jobs gains were wiped out in one fell swoop, and "the decline may unfortunately be even larger in next month's report," Bank of Montreal economist Doug Porter said.

If there is a shred of positivity in the numbers, it may be that most of the job losses could be temporary, as Statistics Canada observed that "workers expected to return to their job within six months."

"As shocking as these numbers are, the big issue is how long do the shutdowns last, and thus how persistent is this spike in joblessness," Porter noted. "That is still very much open for debate."

 

Add some “good” to your morning and evening.

A variety of newsletters you'll love, delivered straight to you.

Sign up now

Comments

To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.

now