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January 26th, 2021
Canada’s economy is set to rebound in 2021, but not before a few more bumps in the road over the coming months. A lot depends on the delivery and administration of COVID-19 vaccinations, with public health officials stating that they expect a majority of the Canadian population to be vaccinated by September.
What does this mean for jobs in Canada? How might newcomers’ economic prospects be affected? And when we look back a year from now, how might 2021 be described? This could be the toughest year in living memory to make predictions about the economy and jobs in Canada — but some economists are on the record with bullish predictions for Canada’s economy post-COVID.
2021 is expected to be better than 2020 — not a high bar, admittedly — but this year is expected to see strong growth in the Canadian economy and jobs.
“Fundamentally, there wasn’t anything wrong with the economy before this [pandemic] all began,” said Douglas Porter, chief economist at Bank of Montreal, one of Canada’s major banking institutions. “And because of the tremendous fiscal support, I do think [the economy is] relatively well-coiled to come back when health conditions do allow.”
He did sound a note of caution, however: “The economy is going to be slogging uphill in the next couple of months. It’s going to be a tough grind through the winter.”
Holding pattern for the winter
Canada’s latest jobs figures, released by StatsCan on January 8, show that unemployment remains much the same as it was on entering the winter season back in November. Unemployment in Canada now sits at 8.6%, up marginally from the previous report (8.5%). December saw the re-introduction of economic restrictions across Canada, affecting retail, dining and food services, and even office environments in many provinces and regions. Further restrictions implemented later in December are likely to be reflected in January’s jobs figures, to be released next month.
All this led to a seven-month streak of job gains in Canada’s labour market coming to an end in the final month of 2020. Canada lost 63,000 jobs in December, the first time the job market has contracted since March and April, when the first lockdown was just getting underway. By May, more than 3 million jobs had been lost and unemployment stood at 13.7%.
And, despite millions of new jobs and plenty of hiring from May to November, there are still 636,000 fewer people with a job in Canada than there were in February, before the pandemic struck. 2020 will now officially go down as the worst year for Canadian jobs since 1982.
Notwithstanding these record-setting, era-defining numbers, Economist Brendon Bernard from job search site Indeed provided a much-needed silver lining.
“Things could’ve been worse,” he said this week. “December’s drop was nowhere near the scale of the declines we saw last spring, and some areas of the economy, like manufacturing and professional services, still achieved solid gains.
“Nonetheless, it’s clear once again that the job market can’t recover amid a raging pandemic.”
So, when will the Covid-19 pandemic stop raging in Canada?
Spring flowers
Canada’s vaccination program, which got underway in mid-December, has got off to a steady, if underwhelming, start. However, the country has placed orders for multiple vaccine candidates, two of which have already been approved by Canadian health authorities; those orders, if approved and delivered, would be enough to vaccinate the population more than five times over. Canada has essentially bet on many horses in the race, providing real hope — even expectation — that economic, social, and cultural life in Canada will be relatively normal by the year’s end, if not sooner.
As more people are vaccinated over the coming months and as Canada’s notoriously harsh winter turns to spring, making it easier for people to enjoy outdoors, workers and businesses are eyeing up spring as a significant milestone in the lifecycle of the pandemic.
To bridge Canadian workers and businesses to that point and beyond, the emergency wage subsidy program, which covers up to 75% of businesses’ payroll, has already been extended to early summer of 2021, effectively making the federal government the largest HR department in the country. Other new programs help laid off workers cover essential expenses until they find new employment. If by the time the wage subsidy program winds down in June there is some effective mass vaccination completed and some return to a form of normalcy, at least as far as retail, transportation, and work is concerned, this could be the point at which the Canadian economy charges ahead, bringing forth more jobs and wage growth.
However, the usual caveats apply: we don’t know for certain just how well the vaccination program will go, plus a roaring Canadian economy by the second half of 2021 will need all the major stakeholders — that’s governments at all levels, the public and private sectors, and, of course, workers themselves — all pulling in a similar direction in a ‘Team Canada’ effort reminiscent of post-WW2 economic recovery. Moreover, and as 2020 showed, economic predictions in January don’t always pan out neatly.
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If you want to see how the figures in this quarter’s Jobs Report compare with previous ones, then feel free to view our helpful slides below.
