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About 2.2 million Ontario workers lost jobs or faced big drop in hours due to COVID-19: watchdog

About one in three workers in Ontario has been affected by the economic shutdown caused by the COVID-19 pandemic, the province's fiscal watchdog said Friday, warning that the impacts will be more profound the longer business closures continue.

One silver lining: Sharp bounce-back possible if cases don't spike and require 2nd lockdown

The province is set to enter phase one of its reopening plan on Tuesday. (Adrian Wyld/Canadian Press)

About one in three workers in Ontario has been affected by the economic shutdown caused by the COVID-19 pandemic, the province's fiscal watchdog said Friday, warning that the impacts will be more profound the longer business closures continue.

Financial Accountability Officer Peter Weltman released the finding in a new report Friday on job losses in Ontario since the crisis began.

In all, 2.2 million people have been affected by the shutdown; an estimated 1.1 million workers in the province have lost their jobs, and another 1.1 million have seen their hours sharply reduced.

"It's awful," Weltman said. "But it's not surprising, really.

This is different than the typical recession. This is a recession where the economy was effectively shut off by the government ... people were told to stay home and businesses were going to have to close and people were going to have to be without work."

Lowest employment level since 2009

According to Statistics Canada, Ontario lost 689,200 jobs in April, bringing its employment down to the lowest level since 2009.

Ontario's unemployment rate climbed to 11.3 per cent in April,  the highest it has been since 1993.

The FAO report found that since February, temporary worker job losses were occurring at twice the rate of permanent employees, at 28 per cent compared to approximately 15 per cent. Nearly 87 per cent of the job losses between February and April came in the private sector.

The job losses came across all industrial sectors, but anything that is public-facing or requires close contact suffered significantly. The report said wholesale and retailers lost 230,900 jobs while accommodation and food services lost 215,800 jobs.

2nd wave could pose dangers

The report also notes there is some reason for optimism: the province's economy could experience a sharp bounce back provided COVID-19 cases don't flare up requiring a second lockdown.

But the dangers of that scenario for the economy are also troubling, Weltman said.

"Anything that delays a reopening of the economy will have more lasting economic impacts," he said. "The longer people go without work, the longer businesses go without cash flow, they become more in danger of shutting down permanently. So these are the sorts of things that hopefully can be avoided." 

The report comes a day after the province unveiled its plan to start to reopen more parts of the economy Tuesday.

Premier Doug Ford announced that he was lifting restrictions on things like retail stores, tennis courts, surgeries and dog grooming.

And while the publicly available data seems to suggest Ontario has seen a steady decrease in the daily number of new cases and has sufficient hospital capacity, it's not so clear whether testing and contact tracing are adequate.

The government's framework released at the end of April set out a number of key criteria for beginning to phase out restrictions on businesses and gatherings. They included: 

  • A consistent two–to-four week decrease in the number of new daily COVID‑19 cases.
  • Sufficient acute and critical care hospital capacity to respond to potential surges.
  • Approximately 90 per cent of new COVID‑19 case contacts being reached by local public health officials within one day.
  • Ongoing testing of suspected cases to detect new outbreaks quickly.

As for whether those criteria have been met, Williams said Tuesday he wasn't so sure.

Green party Leader Mike Schreiner said the FAO report highlights the need for the government to take urgent action to save small businesses.

Schreiner said the Progressive Conservatives should freeze commercial rent evictions until the end of the pandemic and provide grants of up to $5,000 to help with rent, utilities and compliance with public health measures.

"With one in three jobs in this province directly affected by the virus, the vulnerability of our economy and social safety net has been laid bare," he said in a statement. "We must focus on immediate help for small businesses to prevent job losses and maintain the vibrancy of our downtowns and neighbourhoods."

With files from Mike Crawley

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