When the history of Canada’s economy in the COVID-19 era is fully written, the spring of 2021 is likely to be just a footnote. Yes, 207,100 jobs were lost in April, more than the 150,000 or so economists had predicted, and the unemployment rate ticked up to 8.1 percent from 7.5 percent the previous month, but the overall trend points to a strong economic recovery.
So, why then do Canada’s jobs numbers for April look relatively weak?
Here’s the short version: as COVID case numbers and transmission rates in some of Canada’s largest provinces declined in February, provincial governments, notably Ontario’s, relaxed pandemic restrictions despite the fact that a growing share of positive cases were new COVID variants that could spread more quickly and potentially more lethally. As case numbers then ballooned and hospitalisations soon mounted, those same political leaders performed an about-turn and reintroduced strict containment measures that hit jobs in close-contact sectors.
In the short time for which restrictions had been lifted, thousands of employers had hired many tens of thousands of workers, only to then be told that their business operations were going to be curtailed yet again.
Accommodation and food services (-59,000 jobs in April), as well as retail trade (-84,000), were most affected by the on-again, off-again restrictions. Employment also declined on a seasonally adjusted basis in educational services (-36,000), as schools in Ontario were closed. The fact that the bulk of April’s jobs losses were limited to these pandemic-exposed sectors and heavily concentrated in Ontario is a sign that the slowdown isn’t broad-based.
Ontario’s province-wide stay-at-home order was implemented on April 8, contributing to a 1.5-point spike in unemployment in Canada’s most populated province.
Here are Canada’s unemployment levels for April by province (numbers from the previous month in brackets):
- Alberta: 9% (9.1% in March)
- British Columbia: 7.1% (6.9%)
- Manitoba: 7.4% (6.8%)
- New Brunswick: 8.5% (9.2%)
- Newfoundland: 13.9% (12.4%)
- Nova Scotia: 8.1% (8.6%)
- Ontario: 9% (7.5%)
- PEI: 8.2% (8.1%)
- Saskatchewan: 6.6% (7.3%)
- Quebec: 6.6% (6.4%)
Despite the setback, analysts expect a speedy rebound as early as June once restrictions have been lifted and employers hire with more confidence that business will not be curtailed yet again. This should put the Canadian economy back on track toward full recovery.
So, why are people more confident this time?
Canada’s vaccination program stuttered through the early months of 2021, mainly due to delays in delivery schedules. But, Canada is now vaccinating around 1 percent of its entire population daily and is well on the way to getting every willing person a first shot by July and a second by September.
Higher vaccination rates, combined with a broad public commitment to public health measures, should allow Canadian provinces to ease up on restrictions through the summer. Saskatchewan’s three-step reopening plan, which has been lauded by officials in other provinces, provides a roadmap towards most restrictions being eased by July. We can expect similar plans for other provinces in the coming weeks.
As the economy reopens, hiring is expected to ramp up. Importantly, with vaccination rates climbing towards herd immunity thresholds there is a reasonable expectation that when things reopen this time, they won’t be closed again.
It’s not all plain sailing, however. Alberta, Manitoba and Nova Scotia are all struggling with surges in new COVID cases, while Ontario, Quebec and British Columbia are seeing counts slowly fall but still have a way to go before bringing COVID-19 more under control.
What’s the economic trend in Canada then?
April deviated from a steady narrative of economic recovery in Canada. May’s numbers may be similarly unimpressive as provincial governments are understandably more cautious in their reopening plans this time around.
But these spring months are set against a backdrop of sustained job gains over previous months as Canada clawed back most of the jobs lost during the first couple of months of the pandemic last year. Canada’s economy remains about half a million net jobs shy of those pre-pandemic employment levels, but most of those jobs are in just two sectors: accommodation and food services, and retail trade.
Job changes in Canada since March, 2020 by sector
The outlook on Canadian construction and infrastructure
Canada’s new budget, released mid-April, commits more than $101b to kickstart the post-pandemic economy, with $26bn dedicated to infrastructure items. Manitoba and Saskatchewan also recently solidified their commitment to infrastructure spending, and Ontario announced more than $60bn of procurement projects.
“Governments at the federal and provincial levels are doubling-down on infrastructure spending as a new era of big government comes into view, at least as far as construction is concerned.
“This presents big opportunities for immigrants to Canada as employers look far and wide for talent and experience.“
Throughout the pandemic, Outpost has remained nimble and candidate-focused, able to find suitable roles for motivated candidates. The agency works with general contractors, subcontractors, developers, and consultants who are hiring across senior management, operations, project management, site, design, quality, and commercial personnel.
Outpost Recruitment is actively looking for candidates for projects across Canada. View the latest job postings here.