Canada lost nearly 2 million jobs in April amid COVID-19 crisis: Statistics Canada

Canada lost almost two million jobs during the month of April, a record high, as the impact of COVID-19 on the economy made itself known.

Statistics Canada's Labour Force Survey data released Friday brings the total number of jobs lost during the crisis to more than three million.

The closure of non-essential services to slow the spread of COVID-19 has devastated the economy and forced businesses to shutter temporarily.

Statistics Canada says the unemployment rate soared to 13 per cent as the full force of the pandemic hit, compared with 7.8 per cent in March.

Economists on average had expected the loss of four million jobs and an unemployment rate of 18 per cent, according to financial markets data firm Refinitiv.

Douglas Porter, chief economist with BMO Economics, said those high projections could be tied to reports that more than seven million Canadians had applied for the Canada Emergency Response Benefit (CERB).

"The 5.2 percentage point rise in the jobless rate was considerably less than expected, and massively smaller than the 10.3 percentage point spike in the U.S. jobless rate," he said in an emailed statement.

Since comparable data became available in 1976, the April unemployment rate was second-highest only to December 1982, when it reached 13.1 per cent.

"By most accounts, unemployment soared to over 25 per cent during the worst of the Great Depression, as high as 30 per cent by some measures," said Porter.

The rapid decline in employment is unprecedented, Statistics Canada says. The decline since February (-15.7 per cent) outpaces previous financial crises, including the 1981-1982 recession, which resulted in a drop of -5.4 per cent over 17 months. 

"Today's job numbers start to complete the picture of just how devastating the COVID-19 crisis has been to the Canadian labour market," said economist Brendon Bernard of job site Indeed Canada in an email.

"While April's decline was a bit more modest than expected, that 6.4 per cent of all Canadian adults could lose employment in a single month is staggering."

Fewer hours for many who are still working

Job losses are not the only way the COVID-19 crisis has impacted employment. In addition to those who are now out of work, the number of people who were employed but worked less than half their usual hours because of the pandemic increased by 2.5 million from February to April.

That means the cumulative effect of the economic shutdown — people both no longer employed or working far less — was a staggering 5.5 million as of the week of April 12.

All provinces have been hard hit by the crisis. Employment dropped in all provinces for the second month running, with losses of more than 10 per cent everywhere.

Quebec had the worst losses in April at -18.7 per cent, or 821,000 jobs.  

Here are the jobless rates last month by province (numbers from the previous month in brackets):

• Newfoundland and Labrador 16.0 per cent (11.7).
• Prince Edward Island 10.8 (8.6).
• Nova Scotia 12.0 (9.0).
• New Brunswick 13.2 (8.8).
• Quebec 17.0 (8.1).
• Ontario 11.3 (7.6).
• Manitoba 11.4 (6.4).
• Saskatchewan 11.3 (7.3).
• Alberta 13.4 (8.7).
• British Columbia 11.5 (7.2).

As for Canada's three territories, due to logistical challenges, Statistics Canada's Labour Force Survey methodology is somewhat different there than in the rest of Canada, said Bernard.

"Employment rates in the territories haven't been hit as hard as the rest of Canada. That said, Nunavut saw a noticeable drop in the share of the population with a job in April, a sign of how public health concerns and economic uncertainty have extended beyond just the pandemic's hot spots."   

There is evidence to suggest, however, that many pandemic-related job losses are temporary.

In the month of April, almost all of the newly unemployed — 97 per cent — were on temporary layoff, indicating they expect to return to their previous places of work as the shutdown is relaxed.

At the same time, workplace participation declined to 3.7 percentage points, bringing Canada's participation rate to 59.8 per cent, as more than 1 million dropped out of the labour force, said Porter.

Among those still employed, the Labour Force Survey found that an additional 3.3 million workers were working from home in April.

Vulnerable workers most affected

Losses continued to be more rapid in jobs with less security and poorer pay.

Over the two-month period since February, overall employment (not adjusted for seasonality) declined 17.8 per cent.

But it was above average among employees with temporary jobs (-30.2 per cent) and those who had been in their jobs one year or less (-29.5 per cent).

Declines were sharper for employees earning less than two-thirds of the median hourly wage of $25.04 (-38.1 per cent) and those paid by the hour (-25.1 per cent).

Statistics Canada said this is consistent with job declines observed in accommodation and food services, and wholesale and retail trade, which tend to be more precarious and lower paying.

The number of people age 15 and older living households where no one is employed increased 23.5 per cent — or more than 1.6 million — in the two months between February and April.

Among couples, the number where neither partner is employed increased by 22.5 per cent, or 845,000, while single parents who are not employed increased by 53.9 per cent, or 126,000.

Small companies hardest hit

Smaller companies — defined as those with fewer than 20 employees — have shed 30.8 per cent of their workers, medium-sized firms have let 25.1 per cent of workers go, and large companies have seen employment decline by 12.6 per cent.

Hard-hit sectors at the outset include retail, hotels, restaurants and bars, which continued to see losses in April. The losses in the service sector also continued in April, down 1.4 million, or 9.6 per cent, Statistics Canada says.

Proportionally, the losses were greater in goods-producing sectors like construction and manufacturing, which combined lost 621,000 jobs for a drop of 15.8 per cent after being virtually unchanged in March.

The federal government announced Friday it will extend its emergency wage-subsidy to the end of June. The program — which covers 75 per cent of employees' pay, up to $847, to help employers keep their workers on the payroll for the duration of the COVID-19 crisis — was previously set to end June 6.

Average wages in April were up 10.8 per cent compared with a year ago. Economists say the increase is because a disproportionate share of job losses in low-paying positions has allowed the average wage to rise.

"At the same time, relatively more people remained employed in industries where work can be done from home, such as public administration and professional, scientific and technical services, two of the highest-paying industries," the report says.