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Canada jobs recovery fizzles during second wave of COVID-19

UPDATED: Fri., Nov. 6, 2020

Two women walk along a street in Montreal, Saturday, Oct. 31, 2020. Canada's economy is slowing as the country suffers a second wave of COVID-19.   (Associated Press)
Two women walk along a street in Montreal, Saturday, Oct. 31, 2020. Canada's economy is slowing as the country suffers a second wave of COVID-19.  (Associated Press)
By Shelly Hagan Bloomberg

Canada’s economy added 83,600 jobs in October, the fewest since the recovery began in May, as the country suffers through a second wave of coronavirus cases and fresh lockdowns.

The numbers mark a sharp deceleration from 378,000 jobs added in September, and average gains of 395,000 over the past six months. Economists were expecting a gain of 75,000 jobs.

Rising covid-19 cases prompted authorities to close businesses again in major metro areas like Montreal, Toronto and Ottawa, causing a new wave of job losses in affected industries. The recovery was headed for a slowdown even before the recent surge in virus cases. After an initially strong rebound, the economy is expected to enter a drawn out recuperation phase that could take years to play out.

“The October job gain is on balance good news, particularly in the face of payroll losses in the Quebec hospitality sector in the month,” Doug Porter, chief economist at Bank of Montreal, said in a report to investors. “However, job gains are going to be increasingly tough to come by, especially in the face of renewed restrictions in many provinces.”

There are still 1.1 million Canadian workers without jobs or working significantly fewer hours because of the pandemic.

The unemployment rate fell to 8.9%, from 9% in September and the labor market has recovered 2.4 million, or 79%, of the 3 million positions lost during March and April.

Industries that have returned to their pre-pandemic levels include wholesale trade, scientific and technical services and educational services, the report said. Accommodation and food services recorded a decrease of 48,000 jobs, its first loss in five months due to new restrictions on restaurants and bars in cities across Ontario and Quebec. As a result, Quebec was responsible for most of the jobs decline in that sector while Ontario reported little changed.

Five provinces recorded employment increases while the reintroduction of new covid-19 measures in Ontario and Quebec caused a stall in their labor recovery.

The report cited evidence of permanent damage in the labor market with the long-term unemployment — those unemployed and who have been looking or on temporary layoff for 27 weeks are more — increased in both September and October. In October, long-term unemployed totaled 25% of all unemployed people.

The recent monthly increases in long-term unemployment are the sharpest on record, according to the report.

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