Economy lost 207,000 jobs in April, unemployment rate rises, Statistics Canada says

OTTAWA — Canada’s labour market lost 207,000 jobs last month as a spike in COVID-19 variant cases led to renewed public health restrictions and raised concerns about longer-term economic consequences from the pandemic.

The unemployment rate rose to 8.1 per cent from 7.5 per cent in March, Statistics Canada reported. It would have been 10.5 per cent had it included in calculations Canadians who wanted to work but didn’t search for a job.

Ontario led the way on losses regionally with a drop of 153,000, and British Columbia witnessed its first decrease in employment since a historic one-month plunge in the labour market in April 2020.

Nationally, losses were heavier in full-time than part-time work, with retail and young workers hit hardest as a resurgence of the virus and its variants forced a new round of restrictions and lockdowns.

With lockdowns continuing into May, CIBC senior economist Royce Mendes said more losses this month are possible.

Leah Nord, senior director of workforce strategies with the Canadian Chamber of Commerce, said the latest setback in the labour market will carry a long-term impact on the workers and businesses affected, particularly in high-touch sectors that are falling further behind.

“It’s not a K-shaped recovery,” she said, “it’s a K-shaped crisis where the up is going up and the down is going down and that’s where the scarring is going.”

Scarring, or longer-term economic setbacks for the country, could be seen in ranks of the long-term unemployed, which climbed to 486,000 as about 21,000 more workers crossed the threshold of being without a job for six months or more. 

Among them are 312,000 workers who have been unemployed for at least one year, up from the 99,000 recorded pre-pandemic, meaning almost one in every five unemployed workers have been searching for a job for a year or more, noted Behnoush Amery, senior economist at the Lamour Market Information Council.

The concern is that as time goes on, it will become harder for those workers to find new jobs, or they may drop out of the workforce altogether and set back any recovery.

“The good news is that these individuals are still looking for work and have not left the labour market entirely,” Amery said.

“The bad news is that there is a risk that they leave the labour market entirely. If that happens, encouraging them to come back … is challenging and expensive.”

With April’s losses, the country was short about 503,100 jobs, or 2.6 per cent below levels in February 2020 prior to the pandemic, but Statistics Canada suggested the actual gap may be larger.

Although population growth over the last year has slowed with fewer immigrants arriving in the country, the overall workforce is still about 302,000 higher than it was in February 2020. 

The gap would be closer then to 686,000 jobs to bring the employment rate even with where it was pre-pandemic.

“Getting back to pre-pandemic levels is just a milestone, but it’s not victory,” said Jimmy Jean, chief economist at Desjardins. “It means that there’s more to be created if you want to recover.”

The federal government will be keeping a close eye on the workforce numbers nearing the summer and fall to see what, if any, changes might be needed to the package of pandemic aid.

Last month’s federal budget proposed extending aid through the summer to hard-hit workers, and keep easier access to employment insurance in place for another year.

“We’re hoping with the economy being where we expect it to be because of where we expect vaccination levels to be that we’re going to see this reopening and recovery,” Employment Minister Carla Qualtrough said in a recent interview.

“If we had a fourth wave, if that isn’t the case, we are absolutely able and focused on course-correcting, as we’ve always done, as early as possible going into the end of September when these current measures expire”

On Friday, Conservative Leader Erin O’Toole blamed the federal government’s vaccination efforts for April’s jobs losses when asked what level of responsibility provinces needed to take for the workforce setback.

“The provinces have done their best with limited vaccines, limited rapid tests and limited information from the federal government.” O’Toole said.

NDP Leader Jagmeet Singh called for sector-specific support to the tourism, service and live entertainment industries, as well as more relief benefits, particularly to help women who have given up work to take care of children and loved ones.

“A lot of women are choosing — not choosing; they don’t have a choice, they can’t go back to work,” he said.

— With files from Christopher Reynolds and Stephanie Taylor

This report by The Canadian Press was first published May 7, 2021.

Jordan Press, The Canadian Press