Chapter 1: Labour Market Context

COVID-19 and public health measures timeline

On March 11th 2020, the World Health Organization announced that COVID-19 could be characterized as a pandemic. In the following days, the federal and provincial governments imposed different public health measures to reduce the spread of COVID-19, forcing non-essential businesses to close. International travelling restrictions were put in place and the Canada/United States border was closed for all non-essential travel. This led to a massive and an unprecedented output decline and employment losses during the first 2 months of the pandemic, in March and April 2020.

In response to those exceptional events, the Government of Canada provided support to Canadians and businesses facing hardship. Among others, measures such as the Canada Emergency Response Benefit (CERB), the Canada Emergency Student Benefit (CESB) and the Canada Emergency Wage Subsidy (CEWS) were implemented.

As the number of COVID-19 cases started to decline in early May 2020 (consult chart 1), several provincial governments announced partial and progressive reopening of some non-essential services. By mid-July 2020 all provinces had allowed reopening of a significant proportion of business that had been closed in March and April.

Following the emergence of a second wave of COVID-19 cases in late September, many provinces began introducing targeted public health measures. In early November, additional restrictions were imposed, including the closure of many recreational and cultural facilities, in-person dining services, as well as various degrees of restrictions on retail businesses.

In the meantime, temporary changes were made to the EI program to broaden its access, permitting previously ineligible contributors to get full access to the benefits. CERB and CESB ended in September 2020 and were replaced by a set of new programs, the Canada Recovery Benefit (CRB), the Canada Recovery Sickness Benefit (CRSB) and the Canada Recovery Caregiving Benefit (CRCB) for those who were not eligible to receive EI benefits^{Footnote 4}.

In early February 2021, public health restrictions were eased in many provinces. This allowed for the re-opening of many non-essential businesses, cultural and recreational facilities, and some in-person dining. However, capacity limits and other public health requirements, which varied across jurisdictions, remained in place.

By the end of FY2021, a third wave of COVID-19 emerged. In response, public health measures were tightened again in several provinces in late March and early April.

This succession of closures and reopening of non-essential services led to important fluctuations in employment, hours worked and unemployment during the whole fiscal year.

Text description of Chart 1

Date	Daily cases
2020-01-31	4
2020-02-08	3
2020-02-16	1
2020-02-21	1
2020-02-24	1
2020-02-25	1
2020-02-26	1
2020-02-27	1
2020-02-29	2
2020-03-01	9
2020-03-03	9
2020-03-05	12
2020-03-06	6
2020-03-07	6
2020-03-08	5
2020-03-09	15
2020-03-11	26
2020-03-12	38
2020-03-13	38
2020-03-14	20
2020-03-15	54
2020-03-16	88
2020-03-17	99
2020-03-18	157
2020-03-19	276
2020-03-20	131
2020-03-21	367
2020-03-22	100
2020-03-23	620
2020-03-24	701
2020-03-25	617
2020-03-26	634
2020-03-27	646
2020-03-28	736
2020-03-29	833
2020-03-30	1,179
2020-03-31	1,111
2020-04-01	1,065
2020-04-02	1,670
2020-04-03	1,254
2020-04-04	1,367
2020-04-05	1,608
2020-04-06	1,155
2020-04-07	1,230
2020-04-08	1,392
2020-04-09	1,476
2020-04-10	1,383
2020-04-11	1,169
2020-04-12	1,066
2020-04-13	1,297
2020-04-14	1,383
2020-04-15	1,318
2020-04-16	1,711
2020-04-17	1,792
2020-04-18	1,469
2020-04-19	1,432
2020-04-20	2,045
2020-04-21	1,591
2020-04-22	1,769
2020-04-23	1,920
2020-04-24	1,778
2020-04-25	1,466
2020-04-26	1,541
2020-04-27	1,605
2020-04-28	1,526
2020-04-29	1,571
2020-04-30	1,639
2020-05-01	1,825
2020-05-02	1,653
2020-05-03	2,760
2020-05-04	1,298
2020-05-05	1,274
2020-05-06	1,449
2020-05-07	1,426
2020-05-08	1,512
2020-05-09	1,268
2020-05-10	1,146
2020-05-11	1,133
2020-05-12	1,175
2020-05-13	1,121
2020-05-14	1,211
2020-05-15	1,126
2020-05-16	1,251
2020-05-17	1,138
2020-05-18	1,070
2020-05-19	1,040
2020-05-20	1,011
2020-05-21	1,201
2020-05-22	1,156
2020-05-23	1,141
2020-05-24	1,078
2020-05-25	1,012
2020-05-26	936
2020-05-27	872
2020-05-28	993
2020-05-29	906
2020-05-30	772
2020-05-31	757
2020-06-01	758
2020-06-02	705
2020-06-03	675
2020-06-04	641
2020-06-05	609
2020-06-06	722
2020-06-07	642
2020-06-08	545
2020-06-09	409
2020-06-10	472
2020-06-11	405
2020-06-12	413
2020-06-13	467
2020-06-14	377
2020-06-15	360
2020-06-16	320
2020-06-17	386
2020-06-18	367
2020-06-19	409
2020-06-20	390
2020-06-21	318
2020-06-22	300
2020-06-23	326
2020-06-24	279
2020-06-25	380
2020-06-26	172
2020-06-27	238
2020-06-28	218
2020-06-29	668
2020-06-30	286
2020-07-01	n/a
2020-07-02	567
2020-07-03	319
2020-07-04	226
2020-07-05	219
2020-07-06	399
2020-07-07	232
2020-07-08	267
2020-07-09	371
2020-07-10	321
2020-07-11	221
2020-07-12	244
2020-07-13	565
2020-07-14	331
2020-07-15	341
2020-07-16	437
2020-07-17	405
2020-07-18	330
2020-07-19	339
2020-07-20	786
2020-07-21	573
2020-07-22	543
2020-07-23	432
2020-07-24	534
2020-07-25	350
2020-07-26	355
2020-07-27	686
2020-07-28	397
2020-07-29	412
2020-07-30	393
2020-07-31	513
2020-08-01	287
2020-08-02	285
2020-08-03	147
2020-08-04	761
2020-08-05	395
2020-08-06	374
2020-08-07	424
2020-08-08	236
2020-08-09	230
2020-08-10	681
2020-08-11	289
2020-08-12	423
2020-08-13	390
2020-08-14	418
2020-08-15	237
2020-08-16	198
2020-08-17	785
2020-08-18	282
2020-08-19	336
2020-08-20	383
2020-08-21	499
2020-08-22	257
2020-08-23	267
2020-08-24	750
2020-08-25	323
2020-08-26	448
2020-08-27	401
2020-08-28	492
2020-08-29	363
2020-08-30	267
2020-08-31	1,008
2020-09-01	477
2020-09-02	498
2020-09-03	570
2020-09-04	631
2020-09-05	371
2020-09-06	400
2020-09-07	247
2020-09-08	1,606
2020-09-09	546
2020-09-10	630
2020-09-11	702
2020-09-12	515
2020-09-13	518
2020-09-14	1,351
2020-09-15	793
2020-09-16	944
2020-09-17	1,120
2020-09-18	1,044
2020-09-19	863
2020-09-20	875
2020-09-21	1,766
2020-09-22	1,248
2020-09-23	1,090
2020-09-24	1,341
2020-09-25	1,362
2020-09-26	1,215
2020-09-27	1,454
2020-09-28	2,176
2020-09-29	1,660
2020-09-30	1,797
2020-10-01	1,777
2020-10-02	2,124
2020-10-03	1,812
2020-10-04	1,685
2020-10-05	2,804
2020-10-06	2,363
2020-10-07	1,800
2020-10-08	2,436
2020-10-09	2,558
2020-10-10	2,062
2020-10-11	1,685
2020-10-12	975
2020-10-13	4,042
2020-10-14	2,506
2020-10-15	2,345
2020-10-16	2,374
2020-10-17	2,215
2020-10-18	1,827
2020-10-19	3,289
2020-10-20	2,251
2020-10-21	2,672
2020-10-22	2,788
2020-10-23	2,584
2020-10-24	2,227
2020-10-25	2,145
2020-10-26	4,109
2020-10-27	2,674
2020-10-28	2,699
2020-10-29	2,956
2020-10-30	3,457
2020-10-31	3,445
2020-11-01	3,244
2020-11-02	3,273
2020-11-03	2,974
2020-11-04	3,283
2020-11-05	3,922
2020-11-06	3,669
2020-11-07	4,246
2020-11-08	4,594
2020-11-09	4,086
2020-11-10	4,302
2020-11-11	4,559
2020-11-12	4,981
2020-11-13	4,741
2020-11-14	5,267
2020-11-15	4,805
2020-11-16	4,802
2020-11-17	4,276
2020-11-18	4,641
2020-11-19	4,642
2020-11-20	4,968
2020-11-21	5,705
2020-11-22	5,418
2020-11-23	5,713
2020-11-24	4,889
2020-11-25	5,022
2020-11-26	5,631
2020-11-27	5,967
2020-11-28	6,496
2020-11-29	6,476
2020-11-30	6,103
2020-12-01	5,329
2020-12-02	6,307
2020-12-03	6,493
2020-12-04	6,300
2020-12-05	6,999
2020-12-06	6,987
2020-12-07	6,499
2020-12-08	5,981
2020-12-09	6,295
2020-12-10	6,739
2020-12-11	6,771
2020-12-12	6,710
2020-12-13	6,580
2020-12-14	6,731
2020-12-15	6,352
2020-12-16	6,416
2020-12-17	7,008
2020-12-18	6,707
2020-12-19	6,895
2020-12-20	6,693
2020-12-21	6,381
2020-12-22	6,196
2020-12-23	6,845
2020-12-24	6,796
2020-12-25	4,092
2020-12-26	8,129
2020-12-27	5,903
2020-12-28	5,790
2020-12-29	6,441
2020-12-30	7,477
2020-12-31	8,446
2021-01-01	7,512
2021-01-02	7,437
2021-01-03	7,137
2021-01-04	7,911
2021-01-05	7,447
2021-01-06	8,372
2021-01-07	8,340
2021-01-08	8,766
2021-01-09	8,665
2021-01-10	8,320
2021-01-11	6,849
2021-01-12	6,287
2021-01-13	6,860
2021-01-14	7,565
2021-01-15	6,809
2021-01-16	7,063
2021-01-17	7,080
2021-01-18	5,225
2021-01-19	4,679
2021-01-20	5,744
2021-01-21	5,955
2021-01-22	5,957
2021-01-23	5,651
2021-01-24	5,323
2021-01-25	4,630
2021-01-26	4,011
2021-01-27	4,204
2021-01-28	4,877
2021-01-29	4,690
2021-01-30	4,663
2021-01-31	4,397
2021-02-01	3,736
2021-02-02	2,828
2021-02-03	3,234
2021-02-04	4,083
2021-02-05	4,022
2021-02-06	3,729
2021-02-07	3,668
2021-02-08	2,967
2021-02-09	2,677
2021-02-10	3,185
2021-02-11	3,181
2021-02-12	3,143
2021-02-13	3,499
2021-02-14	2,862
2021-02-15	2,522
2021-02-16	2,387
2021-02-17	2,605
2021-02-18	3,314
2021-02-19	3,091
2021-02-20	3,219
2021-02-21	2,825
2021-02-22	2,878
2021-02-23	2,790
2021-02-24	2,896
2021-02-25	3,134
2021-02-26	3,219
2021-02-27	3,295
2021-02-28	2,852
2021-03-01	2,596
2021-03-02	2,457
2021-03-03	2,812
2021-03-04	2,832
2021-03-05	3,363
2021-03-06	2,876
2021-03-07	3,025
2021-03-08	3,037
2021-03-09	2,820
2021-03-10	3,223
2021-03-11	3,022
2021-03-12	3,459
2021-03-13	3,539
2021-03-14	3,445
2021-03-15	2,846
2021-03-16	2,819
2021-03-17	3,384
2021-03-18	3,599
2021-03-19	4,214
2021-03-20	4,010
2021-03-21	3,866
2021-03-22	3,775
2021-03-23	3,606
2021-03-24	4,041
2021-03-25	5,200
2021-03-26	5,095
2021-03-27	5,364
2021-03-28	5,126
2021-03-29	4,574
2021-03-30	4,878
2021-03-31	5,513

• Source: Public Health Agency of Canada.

1.1 Economic overview

As a result of the public health measures put in place in early 2020, the Canadian economy experienced its steepest decline since quarterly data were first recorded in 1960. In the first quarter of FY2021, real gross domestic product (GDP) fell at an annualized rate of 37.4% (consult chart 2). Sharp decreases in household spending, business investment, and international trade were recorded due to widespread shutdowns of non-essential businesses, border closures, and restrictions on travel and tourism.

With the progressive reopening of non-essentials services and the relaxation of public health measures, the Canadian economy rebounded in the second quarter of FY2021. The economy grew by 41.1%, led by substantial upturns in housing investment, household spending on durable goods, and exports.

Starting in late September, ongoing fluctuations in the number of COVID-19 cases in following months led to a succession of closures and reopenings. Despite this, the Canadian economy remained resilient in the last two quarters of FY2021, recording solid economic growth. Despite this rebound, by the end of FY2021, the Canadian economy still remained 1.9% below its pre-pandemic peak recorded in the third quarter of the previous fiscal year (FY1920).

Text description of Chart 2

Quarter	Gross domestic product (left scale)	Gross domestic product growth (right scale)
2018Q2	$2.1	3%
2018Q3	$2.1	3%
2018Q4	$2.1	1%
2019Q1	$2.1	0%
2019Q2	$2.1	4%
2019Q3	$2.1	1%
2019Q4	$2.1	1%
2020Q1	$2.1	-8%
2020Q2	$1.8	-37%
2020Q3	$2.0	41%
2020Q4	$2.1	9%
2021Q1	$2.1	5%

• Source: Statistics Canada, Table 36-10-0104-01.

All industries were affected by the COVID-19 restrictions imposed in March and April 2020. However, some industries experienced greater challenges than others. With mandatory closures of all non-essential businesses, industries where social distancing was difficult to implement or teleworking^{Footnote 5} was not an option, recorded unprecedented drops in output. For instance, the accommodation and food services industry recorded a cumulative decline of more than 60% in output during those 2 months alone. The transportation sector was also severely impacted by international traveling restrictions. On the other hand, sectors where teleworking was generally possible^{Footnote 6}, such as finance and insurance; as well as professional, scientific and technical services, recorded only relative modest declines.

The progressive reopening of non-essential services and the relaxation of public health measures starting in mid-2020 led to a generalized, but still uneven recovery of the economy. The burden of subsequent closures and reopenings accompanying the second and third wave of COVID-19 remained on the same sectors such as accommodation and food services; information, culture and recreation; and retail trade; while other sectors recorded uninterrupted output growth.

In March of 2021, 6 of the 16 main industries had fully recovered output losses during the first months of the COVID-19 pandemic. However, for the other remaining 10 industries, output was still lagging compared to their pre-pandemic levels, with accommodation and food services remaining the most impacted sector, having a GDP that was still 27.2% below its pre-pandemic level, followed by transportation and warehousing (-18.0%, consult chart 3).

Text description of Chart 3

Industry	Change in real GDP
Wholesale and retail trade	5.2%
Finance, insurance, real estate, rental and leasing	3.7%
Construction	2.6%
Public administration	1.1%
Health care and social assistance	0.5%
Educational services	0.1%
Professional, scientific and technical services	-0.3%
Agriculture, forestry, fishing and hunting	-2.0%
Manufacturing	-3.2%
Utilities	-4.2%
Mining, quarrying, and oil and gas extraction	-4.7%
Business, building and other support services*	-11.5%
Information, culture and recreation**	-11.7%
Other services (except public administration)	-11.8%
Transportation and warehousing	-18.0%
Accommodation and food services	-27.2%

• * Includes management of companies and enterprises and administrative and support, waste management and remediation services.
• ** Includes information and cultural industries and arts, entertainment and recreation industries.
• Source: Statistics Canada, Table 36-10-0434-01.

As for international comparison, all G7 countries—a group consisting of the world’s major industrialized and advanced countries including Canada^{Footnote 7}—experienced significant economic activity declines in the second quarter of 2020. While they all saw a rebound in the following quarter, the recovery was uneven across the G7. The recovery across these countries reflected the timing and relative importance of COVID-19 cases fluctuations and the severity of the public health measures put in place.^{Footnote 8}

1.2 The Canadian labour market

This section highlights key labour market developments in Canada during the reporting period, including some that are linked to the EI program.^{Footnote 9}

The decline in economic activity described in the previous section was accompanied by massive employment losses. At its peak in April 2020, employment declined by 3.0 million (-15.7%) compared with February 2020 (consult chart 4). In addition, the number of workers still employed, but working less than half their usual hours increased by 2.5 million (+308.2%). This increase mostly reflected a surge of those that worked zero hours (2.2 million or +391.6%, consult chart 5).

Text description of Chart 4

Month	Total employment (in millions)
Mar-19	18.8617
Apr-19	18.9712
May-19	19.0043
Jun-19	18.9957
Jul-19	18.9659
Aug-19	19.0255
Sep-19	19.0731
Oct-19	19.0634
Nov-19	19
Dec-19	19.0824
Jan-20	19.1165
Feb-20	19.1436
Mar-20	18.1314
Apr-20	16.1458
May-20	16.4672
Jun-20	17.3977
Jul-20	17.8018
Aug-20	17.9937
Sep-20	18.3777
Oct-20	18.4677
Nov-20	18.5163
Dec-20	18.4934
Jan-21	18.2856
Feb-21	18.5581
Mar-21	18.8344

• Source: Statistics Canada, Labour Force Survey. Table 14-10-0287-01.

As of March 2021, about 547,600 Canadians were still impacted by the pandemic, including an additional 309,200 unemployed (-1.6%). In addition, another 238,400 were still employed but working less than half their usual hours relative to February 2020 (+29.4%).

Text description of Chart 5

Month	Employment losses (millions)	Zero hours (millions)	Less than 50% (millions)	Total impacted (millions)
Feb-20	0	0	0	0
Mar-20	-1.0122	-1.5001	-0.6919	-3.2042
Apr-20	-2.9978	-2.2274	-0.2684	-5.4936
May-20	-2.6764	-1.8314	-0.3511	-4.8589
Jun-20	-1.7459	-1.073	-0.2678	-3.0867
Jul-20	-1.3418	-0.7704	-0.1812	-2.2934
Aug-20	-1.1499	-0.6246	-0.0896	-1.8641
Sep-20	-0.7659	-0.4425	-0.1482	-1.3566
Oct-20	-0.6759	-0.3887	-0.0451	-1.1097
Nov-20	-0.6273	-0.382	-0.0462	-1.0555
Dec-20	-0.6502	-0.4136	-0.059	-1.1228
Jan-21	-0.858	-0.4687	-0.0472	-1.3739
Feb-21	-0.5855	-0.3436	-0.0567	-0.9858
Mar-21	-0.3092	-0.2266	-0.0118	-0.5476

• Source: Statistics Canada, Labour Force Survey, Supplement Table.

Labour force growth and the labour force participation rate

As millions of Canadians lost their job, a significant proportion of them dropped out of the labour force. Given the high level of uncertainty, many individuals were not actively looking for work, leading to a significant decline in the labour force.^{Footnote 10} Indeed, in April 2020, there were 1.7 million fewer Canadians in the labour force compared to February 2020. Of those, 1.15 million wanted to work but did not look for a job.

With the reopening of the economy, by June 2020 the size of the labour force was only 2.4% below its February 2020 level. As restrictions continued to loosen across the country, the gradual recovery continued through the rest of the summer and into the fall. As a result, more individuals either returned to their jobs or look for (and eventually find) new jobs. By October 2020, the size of the Canadian labour force was 0.1% above its February level. However, new public measures put in place during the second wave of COVID-19 halted the recovery of the labour market. This lead to a second, but less pronounced, decline in the size of the labour force, reaching its lowest point in January 2021. Yet, as the second waved eased, restrictions started being lifted and by March 2021, the labour force had rebounded, standing 0.3% above its pre-pandemic level.

Led by the large decrease in the labour force, the participation rate fell from 65.6% in February to 59.9% in April 2020. The participation rate remained slightly lower in March 2021 (65.2%) than it was in February 2020 (65.6%), despite the size of the labour force being slightly above its pre-pandemic level. This is explained by the fact that the size of the population aged 15 and over grew at a faster rate then the labour force.

Employment growth

As mentioned earlier, public health measures led to significant employment losses, and by April 2020, employment had fallen by 15.7% from its February level (consult chart 5). With the gradual reopening of non-essentials services and the relaxation of public health measures, employment grew consistently through the summer and fall. In December 2020 and January 2021, the second wave caused a new, but much smaller, decline in employment. Once Canada has passed this wave, employment rebounded as public health restrictions were once again relaxed. By March 2021, employment levels had reached their highest point since the beginning of the COVID-19 pandemic, but still remained 1.6% (-309,200) below pre-pandemic high.

Public health measures imposed led to massive lay-offs in the private sector. The number of private-sector employees fell by 21.8% (-2.7 million) during the first 2 months of the pandemic (consult chart 6). They progressively recovered during the summer and fall, but slightly declined again at the time of the second wave. By the end of FY2021, it had risen to its highest level since February 2020, but still remained 2.5% (-307,800) below pre-pandemic level.

Text description of Chart 6

Month	Public-sector employees	Private-sector employees	Self-employed
Feb-20	100	100	100
Mar-20	96.51566154	93.37870536	98.51813292
Apr-20	94.26985636	78.159115	97.67829256
May-20	93.7764987	81.01981857	96.57470068
Jun-20	95.06385384	88.16146183	96.89050842
Jul-20	96.46683968	91.12817732	96.74128058
Aug-20	97.04242362	93.38356087	93.70813812
Sep-20	101.3567336	95.18009889	93.09387472
Oct-20	100.8942108	95.89952335	93.90942218
Nov-20	101.552021	96.07594015	94.15582162
Dec-20	102.0505178	95.82426297	92.736422
Jan-21	101.7755737	94.11593335	93.04875933
Feb-21	102.9447285	95.94565068	92.6184279
Mar-21	104.1138834	97.57467367	94.5757418

• Source: Statistics Canada, Labour Force Survey. Table 14-10-0288-01.

On the other hand, public-sector employment fell relatively modestly during the first 3 months of the pandemic. At its worst, in May 2020, the number of public-sector employees had fallen by 6.0% (-234,300) compared to February 2020. This is more than 3 times less than that observed in the private-sector. Starting in June 2020, employment in the public sector increased at a relatively steady pace and by March 2021, it was 4.0% (+154,400) higher than its February 2020 level. Public-sector employment includes individuals working in government funded establishments such as hospitals. As a result, the increased employment in this sector partially reflected the growing need for workers in these organisations to meet the new demands brought on by the COVID-19 pandemic.

Finally, throughout the fiscal year, the number of self-employed workers in Canada fell gradually. There was no dramatic decline at the beginning of the COVID-19 pandemic, and it reported relatively small growth only during a few sporadic months. By the end of FY2021, there were 5.4% fewer self-employed workers (-155,800) than in February 2020.

Turning to full-time and part-time employment, while employment losses were widespread, part-time workers were much more affected. By April 2020, part-time employment had declined by 29.3% compared to February 2020, a rate more than twice as high as the decline in full-time employment. This is largely because part-time workers are more likely to work in sectors that were heavily impacted by public health restrictions or sectors for which teleworking was not an option. Over the course of the summer and the fall, employment grew among both full-time and part-time workers. However, when the second wave hit in January 2021, part-time employment accounted entirely for decline in overall employment. By March 2021, full-time employment was only 1.1% (-168,100) lower than its February 2020 levels, progressing in every month since May 2020. In contrast, part-time employment was still 3.9% (-141,100) below its pre-pandemic levels, as its recovery continued to lag behind that of full-time employment.

Employment by industry

The relative importance of employment losses across industries^{Footnote 11} was largely driven by the ease with which social distancing or remote working could be practiced and whether essential services were being provided. Industries with broader remote work options were able to bounce back quickly and maintain employment growth through the remainder of FY2021, despite additional waves of COVID-19 and public health measures. Conversely, industries that were more exposed to constraining public health measures experienced deeper losses and much more volatile employment growth throughout FY2021.

The most severe employment losses were experienced in the accommodation and food services, as well as information, culture, and recreation industries. In April 2020, employment in these industries was 50.2% and 23.1% below pre-pandemic levels, respectively (consult chart 7). These industries experienced another significant decline in employment during the second wave of the pandemic. At the end of FY2021, employment remained 24.8% and 7.7% below February 2020 levels, respectively. Meanwhile, employment losses in finance, insurance, real estate, rental and leasing; as well as professional, scientific, and technical services industries were more modest. It declined by 3.7% and 4.4% respectively during the first 2 months of the pandemic. Moreover, employment levels had fully recovered by September and October 2020, respectively, in these 2 industries. By the end of FY2021, 8 out of 16 industries had recovered all employment losses recorded during early months of the pandemic.^{Footnote 12}

Employment losses were unevenly spread across enterprises of all sizes over FY2021.^{Footnote 13} Small-medium-sized and medium-large-sized firms recorded the largest decline in the number of employees. It declines by 27.4% and 21.4%, respectively, in the first quarter of FY2021 relative to their pre-pandemic levels recorded in the third quarter of FY1920.^{Footnote 14} Small-sized and large-sized firms recorded more modest decline in their payroll (-17.9% and -12.2%, respectively). By the end of FY2021, the distribution of employees by enterprise size shift slightly from medium-sized to small and large-sized enterprises.

Text description of Chart 7

Month	All industries	Health care and social assistance	Professional, scientific and technical services	Finance, insurance, real estate, rental and leasing	Information, culture and recreation	Accommodation and food services
Feb-20	100	100	100	100	100	100
Mar-20	94.71259324	95.72659709	100.7147034	98.92542619	86.42627173	75.76474427
Apr-20	84.34045843	90.57558507	95.64680658	96.29150844	76.88345138	49.84093319
May-20	86.0193485	90.60721063	95.04905464	98.44065606	76.35544108	54.18875928
Jun-20	90.87998078	95.34709045	94.89961666	99.44251434	83.60592402	67.46064116
Jul-20	92.99086901	96.18121442	97.27113248	98.83655167	86.40051513	75.87894608
Aug-20	93.9932928	96.44607843	98.31719836	98.5860871	86.40051513	79.55787585
Sep-20	95.99918511	97.31973435	99.72061594	100.2100671	93.20025757	84.77037279
Oct-20	96.46931612	98.08665402	102.2285751	101.3331179	91.44880876	81.29537483
Nov-20	96.72318686	98.16176471	102.8783055	102.1895451	88.91178364	78.92160861
Dec-20	96.60356464	98.42267552	104.4246638	102.5773612	87.01867354	74.54931071
Jan-21	95.51808437	99.12239089	104.8989669	103.6115375	85.40888603	68.53740109
Feb-21	96.9415366	99.38330171	105.7501137	103.3287549	85.00965873	74.12513256
Mar-21	98.3848388	100.8222644	106.204925	103.7084916	92.27301996	75.21004976

• Source: Statistics Canada, Labour Force Survey, Table 14-10-0355-01.

Employment by age group

Youth aged 15 to 24 were disproportionally impacted in FY2021 by the pandemic (consult chart 8), relative to other age groups, as they are more likely to be overrepresented in industries that were severely impacted by the public health restrictions (for example, accommodation and food services; wholesale and retail trade). Indeed, in the first wave of the pandemic (February to April 2020), employment among youth declined by 34.2%, compared with 12.7% for core-age (aged 25 to 54) and 13.0% for older individuals (aged 55 and over).

With successive waves of closures and reopening in these industries, youth employment recovery was much more volatile. Core-age and older workers also suffered job losses, but the immediate impact was much more limited and their recovery has been less bumpy. In March 2021, youth employment remained 6.2% below their pre-pandemic level. In contrast, employment among core-age individuals was 1.2% below February 2020, while employment among older individuals had returned to its pre-pandemic level.

Text description of Chart 8

Month	15 to 24 years	25 to 54 years	55 years and over
Feb-20	100	100	100
Mar-20	84.11248565	96.44489337	95.8868943
Apr-20	65.8351435	87.30979576	86.71324005
May-20	67.65875809	88.69291206	89.08096365
Jun-20	77.66692265	93.35079517	91.08279538
Jul-20	83.35525047	94.74920421	92.81920228
Aug-20	85.17286152	95.68093117	93.30765047
Sep-20	90.16076811	97.36277765	94.12488256
Oct-20	90.35834406	97.7793369	94.67347745
Nov-20	90.94259874	97.90384617	94.87939604
Dec-20	89.74153512	97.7931632	95.2737479
Jan-21	85.78392777	96.95333035	95.17822739
Feb-21	89.85964395	98.0135938	95.7376025
Mar-21	94.27978666	98.56656171	97.7351904

• Source: Statistics Canada, Labour Force Survey. Table 14-10-0287-01.

Employment by gender

During the first 2 months of the pandemic, employment losses among women were slightly more pronounced (16.8%) than among men (14.6%). In addition, 22.2% of women were still employed, but working less than half their usual hours, compared to 19.1% for men. This reflected the fact that women were more likely than men to work in industries that were severely affected by public health measures. This industries include accommodation and food services; information, culture and recreation; other services; as well as retail trade (27% for women on average in 2019 versus 20% for men, for all 4 of those industries). Because of this, the employment recovery of women also lagged that of men (consult chart 9).

In addition to weak labour market conditions, gender trends in employment during the pandemic were also partly due to balancing work and family obligations.^{Footnote 15} Employment of parents decreased for both men and women during the pandemic. However, the decline was greater for mothers with children aged less than 12 years old. This is in part because they were more likely to engage in unpaid work such as caring for children or family members.

As previously mentioned, in the initial months of the pandemic, the decline in employment was considerably more pronounced among part-time than full-time workers. This was true for both men and women (consult chart 10). As a greater proportion of women than men work in part-time jobs (25% vs 13%), it also contributed to the larger employment losses observed among women. As business reopened following public health measures easing, full-time employment partially recovered. By the end of FY2021, it was standing 1.4% below its pre-pandemic level for men and 0.7% below for women.

Text description of Chart 9

Month	Men	Women
Feb-20	100	100
Mar-20	96.19482496	93.10344828
Apr-20	85.38812785	83.10344828
May-20	87.51902588	83.96551724
Jun-20	92.08523592	88.96551724
Jul-20	93.60730594	91.72413793
Aug-20	94.36834094	93.10344828
Sep-20	95.89041096	95.34482759
Oct-20	96.34703196	95.68965517
Nov-20	96.65144597	95.86206897
Dec-20	96.34703196	95.34482759
Jan-21	95.58599696	93.96551724
Feb-21	96.65144597	95.34482759
Mar-21	98.17351598	96.89655172

• Source: Statistics Canada, Labour Force Survey. Table 14-10-0287-01

While the initial impact on part-time employment was similar for men and women, the recovery was faster for men. During the second wave, employment losses were concentrated among part-time workers, affecting both men and women. By the end of FY2021, part-time employment among men had fully recovered, standing 1.6% above its pre-pandemic level. However, for women working part-time, it was still 7.0% below the February 2020 level.

Text description of Chart 10

Month	Men full-time	Men part-time	Women full-time	Women part-time
Feb-20	100	100	100	100
Mar-20	97.7570817	85.79643926	95.85210571	84.74561668
Apr-20	87.37703798	71.58500079	87.6168811	70.27527678
May-20	89.50040987	74.22404285	88.92417685	70.82669194
Jun-20	93.30767829	86.01701591	91.2965124	83.14306639
Jul-20	93.64354677	95.84843233	92.09713872	91.56076337
Aug-20	94.27315785	96.93556011	93.55953735	92.59035885
Sep-20	96.05155296	98.62139594	95.64530186	95.3991298
Oct-20	96.20411695	101.2131716	96.24651019	95.52836772
Nov-20	96.60260497	101.0004727	97.10179181	93.73626847
Dec-20	96.99995446	97.50275721	97.5006278	91.99586439
Jan-21	96.9737681	91.69686466	97.66902522	85.82690734
Feb-21	97.42121323	98.32991965	98.49771777	89.82466721
Mar-21	98.60073777	101.6228139	99.33231901	93.03838366

• Source: Statistics Canada, Labour Force Survey. Table 14-10-0287-01.

Employment rates

The indicator of employment growth presented in the previous section does not take into consideration the working-age population growth. The measure of employment rate, which is the proportion of people aged 15 years and over who were employed, accounts for that.

The employment rate dropped significantly during the first 2 months of the pandemic, falling by nearly 10 percentage points from 61.9% in February to 52.1% in April 2020. As the pandemic ran its course, the rate followed similar patterns to that of employment levels, finally bouncing back to 60.3% at the end of FY2021. However, by March 2021, the employment rate remained well below the level observed in February 2020 (61.9%). This reflects the fact that not only employment had not fully recovered, but also the working age population had increased over the fiscal year.

The decline in employment rates was widespread across all the Canadian population. As already mentioned, youth were disproportionally impacted by the pandemic. This was also reflected in their employment rate, which fell by 19.9 percentage points during the first 2 months (58.1% in February 2020 to 38.2% in April 2020). By March 2021, their employment rate had recovered significantly but remained 3.4 percentage points below its pre-pandemic level. Individuals aged 25 to 54 experienced a 10.6 percentage points decline in their employment rate during the first 2 months of the pandemic. Those aged 55 and over recorded a milder decline of 4.8 percentage points. By the end of FY2021, both had recovered a large part of that loss. The employment rate of individuals aged 25 to 54 stood at 82.0% compared to 83.2% in February 2020. For those aged 55 and over, it stood at 35.3%, compared to 36.1% prior to the pandemic.

Men and women recorded similar decline in their employment rates during the first 2 months of the pandemic (-9.7 percentage points for men and -9.8 for women). However the recovery was slower for women. By the end of FY2021, the employment rate for men stood at 64.5% compared to 65.8% in February 2020, a gap of 1.3 percentage points. Women’s employment rate stood at 56.2% compared to 58.0% prior to the pandemic, a gap of 1.8 percentage points.

Unemployment rates

By May 2020, the number of unemployed individuals reached its highest level since comparable data collection began in 1976. The number of unemployed individuals increased from 1.2 million in February 2020 to 2.6 million in May 2020. Over the same period, the unemployment rate more than double, from 5.7% to 13.4%. As public health restrictions loosened over the summer and fall, many individuals returned to work. As a result, unemployment and the unemployment rate fell consistently until the second wave of the COVID-19 pandemic, which brought a temporary rebound in both. By the end of the fiscal year, both were at their lowest levels since the COVID-19 pandemic began. After peaking at 2.6 million in May 2020, unemployment had fallen to 1.5 million in March 2021, still remaining 31.5% (+364,600) higher than its February 2020 level. Correspondingly, the unemployment rate had fallen to 7.5% in March 2021.

Focusing solely on the unemployment rate, however, underestimates the true impact of the COVID-19 pandemic. As individuals who left the labour force were not counted as unemployed, the unemployment rate underestimated unused labour. Labour underutilization^{Footnote 16}, a broader measure of unemployment that includes inactive individuals that wanted to work, but did not look, increased from 11.4% in February 2020 to 36.1% in April. This increase was explained by the number of individuals who wanted to work but did not look, which almost quadruple. As with the unemployment rate, the labour utilization rate declined relatively quickly, standing at 14.7% in March 2021.

Duration of unemployment

In addition to the large overall increase in unemployment, the COVID-19 pandemic also had an important impact on unemployment duration and the share of long-term unemployed.^{Footnote 17} The number of new unemployed individuals increased significantly due to the early impact of the COVID-19 pandemic. This lead to a quick decline in the average duration of unemployment, from 16.7 weeks in February 2020 to 8.9 weeks in April 2020 (consult chart 11). The same happened with long-term unemployment. In February 2020, they accounted for 8.9% of total unemployment, a share that had remained relatively stable throughout FY1920. By April 2020, the share of long-term unemployed fell to 2.6% as a result of the increase in newly unemployed individuals. While the unemployed who had been temporary laid off gradually returned to their jobs, a significant number of those who had permanently lost their job remained jobless for several months. As a result, the average duration of unemployment and the share of long-term unemployment increased constantly throughout FY2021, reaching 22.5 weeks and 16.5%, respectively, in March 2021. Compared to their respective pre-pandemic levels, this is 6 more weeks of unemployment and almost twice the share of long-term-unemployed.

Text description of Chart 11

Month	Average weeks of unemployment spells (left scale)	Long-term unemployment (%) (right scale)
Mar-19	17.6	9.48
Apr-19	17.4	8.38
May-19	16.7	7.62
Jun-19	15.6	6.75
Jul-19	16.1	7.92
Aug-19	16.1	7.93
Sep-19	15.8	7.04
Oct-19	16.8	7.92
Nov-19	16.8	7.23
Dec-19	16.9	7.97
Jan-20	17	8.03
Feb-20	16.7	8.88
Mar-20	12.5	5.81
Apr-20	8.9	2.60
May-20	11.3	2.95
Jun-20	12.6	3.49
Jul-20	15.8	4.05
Aug-20	16.2	4.49
Sep-20	19.2	5.35
Oct-20	18.7	6.77
Nov-20	19	5.65
Dec-20	21	7.70
Jan-21	21.2	8.24
Feb-21	21.8	10.14
Mar-21	22.5	16.55

• Source: Statistics Canada, Labour force Survey, Table 14-10-0342-01.
• *Long-term unemployment is defined as unemployed individuals who have been searching for a job for a period of at least 12 consecutive months. The percentages presented in this chart are the long-term unemployed as a proportions of all unemployed individuals.

Long-term unemployment is usually more common among older individuals. In February 2020, the share of long-term unemployed was 13.0% among those aged 55 and over, compared to 8.9% among the core-age and 5.8% among youth. By the end of FY2021, the share of long-term unemployed had increased to 24.2% among older individuals, 18.2% among core-age and 7.8% among youth. Similarly, relative to February 2020, at the end of FY2021, the average duration of unemployment increased by 7.9 weeks among older workers reaching 29.6 weeks. Among core-age, it increase by 7.3 week, reaching 24.5 weeks. Among youth, the duration increased by only 2.8 weeks, reaching 14.5 weeks.

Prior to the pandemic, the share of long-term unemployment was similar for men and women. Compared to February 2020, by the end of FY2021, the share of long-term unemployment reached 18.4% for men compared to 14.3% for women. Unemployment duration increased by 6.9 weeks for men, reaching 24.4 weeks, while it increased by 4.8 weeks for women, reaching 20.4 weeks.

Reasons for unemployment

In general, workers can become unemployed for a number of reasons, and the cause of unemployment is a key factor in determining if the individual is eligible for EI benefits.^{Footnote 18} As a result of the COVID-19 pandemic, and subsequent variation in labour market conditions, reasons for unemployment significantly shifted during FY2021.

At the beginning of the pandemic, as businesses expected closures to be short and anticipated a relatively quick return to normal, several Canadian were temporarily laid off. As a result, temporary layoffs quickly accounted for a little more than half of total unemployment by April 2020 (53%). A large proportion of those who were temporarily laid off returned to work relatively quickly. By the end of the FY2021, they accounted for less than 10% of total unemployment (consult chart 12). However, as the economy was still operating under a number of restrictions, permanent layoffs started to grow and outpaced the number of temporary layoffs. By the end of FY2021, temporary and permanent layoffs accounted for 10% and 44% of unemployed, respectively, slightly above their pre-pandemic share.^{Footnote 19}

Individuals who have not worked in the previous year and those who had never worked before accounted for 37% of total unemployment in February 2020. During the first 2 months of the pandemic, their numbers fell by 35.9%, as a number of them became inactive. By the end of FY2021, their number had doubled.

Text description of Chart 12

Month	Job Leavers	Permanent Layoffs	Temporary Layoffs	Not Worked Last Year	Never Worked
Mar-19	254.4	500.2	53	302.2	133
Apr-19	244.4	492.5	44.6	279.2	138.7
May-19	271.1	417.8	32.6	258.7	141.5
Jun-19	241	387.6	29.5	261.9	162.4
Jul-19	244	438.7	57.8	272.5	217.7
Aug-19	249.7	547.4	49.3	284.7	189.5
Sep-19	247.9	326.7	20.7	290.9	139.8
Oct-19	246	328.9	32.1	280.4	137
Nov-19	244.7	411.7	33	275.3	144.6
Dec-19	206.4	415.3	48.8	264.3	107.2
Jan-20	224.7	463.2	75.4	284.1	131.4
Feb-20	211.6	481.6	58.1	310.1	124.7
Mar-20	206.2	520.3	549.7	247.5	128
Apr-20	196.3	692.6	1336.4	187.3	91.3
May-20	295.9	875.8	1084.1	254.2	156.9
Jun-20	288.8	937.5	666.4	293.8	220.1
Jul-20	310.6	962	391.5	328.7	300.5
Aug-20	308.9	1102.4	284.7	311	275.2
Sep-20	255.6	741	169.5	327.7	216.3
Oct-20	243.5	733.5	146.7	351.8	181.9
Nov-20	206.9	748.2	130.4	345.9	187.4
Dec-20	165.2	749.5	178	344.1	175.9
Jan-21	194	833.8	356.1	359.8	201.5
Feb-21	209.8	744.1	203.7	398.7	164.1
Mar-21	196	719.6	144.2	395.1	176.7

• Source: Statistics Canada, Labour Force Survey. Table 14-10-0125-01. Data not adjusted for seasonality.

Hours of work

The number of hours of insurable employment is a key eligibility criterion of the EI program, as claimants must have worked a minimum number of insurable hours in the previous year to qualify for EI benefits. It also determines, along with the regional unemployment rate, the maximum number of weeks of EI regular benefits a claimant is entitled to receive.

The total number of hours actually worked by Canadians declined significantly at the beginning of FY2021. This was due to the massive employment losses, as well as the significant number of Canadians that were employed, but that worked reduced hours due to public health measures. As a result, the level of actual hours worked was 27.0% below pre-pandemic levels in April 2020 (consult chart 13). Since then, actual hours worked increased every month throughout the remainder of the fiscal year. There was 1 exception, a slight decline in December 2020, coinciding with the second wave of the pandemic. By the end of FY2021, actual hours worked were still 0.8% below their February 2020 level.

As mentioned previously, many workers suffered a significant reduction in the number of hours worked. As a result, the average of actual hours worked per worker fell from 32.5 hours a week in February 2020 to 27.5 hours in April (consult chart 14). This means that on a year-over-year basis, March, April, and May of 2020, the average declined by 11.2%, 8.0%, and 9.3%, respectively. The average then rebounded through the summer of 2020 and remained near levels observed in the previous year for most of the second wave of the pandemic. Following the second waves of COVID-19 cases, public health measures were eased further. This resulted in an increase in the average of actual hours worked, reaching 32.8 hours a week in March 2021, 2.5% above the level observed in March 2019.

Text description of Chart 13

Month	Total employment	Total actual hours worked (main job)
Feb-20	100	100
Mar-20	94.71259324	85.43656327
Apr-20	84.34045843	73.02222914
May-20	86.0193485	76.50503244
Jun-20	90.87998078	85.08686483
Jul-20	92.99086901	89.10400595
Aug-20	93.9932928	91.8988779
Sep-20	95.99918511	92.93923908
Oct-20	96.46931612	93.71065277
Nov-20	96.72318686	94.78428302
Dec-20	96.60356464	94.6878583
Jan-21	95.51808437	95.66376164
Feb-21	96.9415366	96.64261871
Mar-21	98.3848388	99.2289198

• Source: Statistics Canada, Labour Force Survey. Table 14-10-0287-01 and 14-10-0289-01.

Text description of Chart 14

Month	Hours worked
Mar-19	32
Apr-19	29.9
May-19	33.3
Jun-19	33.9
Jul-19	31.4
Aug-19	31
Sep-19	33.6
Oct-19	30.3
Nov-19	31.8
Dec-19	33.2
Jan-20	32.3
Feb-20	32.5
Mar-20	28.4
Apr-20	27.5
May-20	30.2
Jun-20	31.6
Jul-20	30.2
Aug-20	29.9
Sep-20	32.7
Oct-20	30.6
Nov-20	31.5
Dec-20	32.7
Jan-21	32.4
Feb-21	31.1
Mar-21	32.8

• Source: Statistics Canada, Labour Force Survey, Table 14-10-0042-01.

Wages^{Footnote 20}

Earnings are also an important element for the administration of the EI program. They determine the EI premiums paid by employers and employees, as well as the level of benefits that claimants can receive. Earnings can be a combination of hourly wages and hours worked, a fixed amount paid for a specific time period (for example, a week) or in the form of commissions, tips or bonuses.^{Footnote 21} Indicators of average hourly wages and average weekly earnings are therefore examined.

First, looking at the impact of the COVID-19 pandemic by hourly earnings threshold, low-wage employees^{Footnote 22} were disproportionately impacted. When analyzing the distribution of job losses by wage group, we can see that employees earning less than $20.00 per hour were significantly more affected by the crisis than others (consult chart 14). This group represents one-third of all employees. Compared to February 2020, employment among these employees was down by one-third in April 2020. In comparison, it fell by 17.6% for those earning between $20 and $29.99 per hour, and by only 4% among those earning more than $30. Moreover, by March 2021, employees with higher wages had fully recovered their pre-pandemic level. By contrast, the number of low-wage employees was still 15.3% below its pre-pandemic level (consult chart 15).

Text description of Chart 15

Month	Less than $20.00	$20.00 to $29.99	$30.00 or more
Feb-20	100	100	100
Mar-20	86.88929534	95.42750156	98.34322537
Apr-20	66.79237456	82.42770959	95.98439885
May-20	71.41213961	86.14520491	99.92538579
Jun-20	83.48386853	92.97274808	102.3537392
Jul-20	89.00118794	93.25982942	102.5029676
Aug-20	89.93268342	95.63137092	103.9952518
Sep-20	86.15390417	102.8250468	106.0183144
Oct-20	86.56119774	102.2384023	107.2443615
Nov-20	87.32675881	101.2003328	107.2392742
Dec-20	86.05208078	101.0380695	107.6632186
Jan-21	78.98101182	97.64510089	108.4517551
Feb-21	82.6391115	100.389016	108.5484144
Mar-21	84.69820678	101.3397129	109.4471765

• Source: Statistics Canada, Labour Force Survey. Table 14-10-0113-01.

This reflects the fact that the 2 industries with the highest share of low-wage employees, accommodation and food services and retail trade, were among those that were hit the hardest. This means that those still employed were, on average, earning more than those who had lost their job. This caused a shift in the wage distribution that resulted in a higher overall nominal average hourly wage in months following the closure of the economy. Based on Labour Force Survey (LFS) data, in April 2020, average hourly wage was up by 10.9% (+$3.02) compared to April 2019^{Footnote 23}, reaching $30.62 per hour. As low-wage employees were slowly re-employed, the nominal average hourly wage dropped from its inflated level and by March 2021. It had declined to $29.89, remaining 8.6% (+$2.37) above their March 2019 level, as the number of low-wage employees remained below their pre-pandemic level (consult chart 16).

Statistics Canada published a fixed-weighted average wage using LFS data to paint a picture of wage trends that are less influenced by these structural shifts. This approach maintains employment composition by occupation and tenure at the 2019 average. The fixed-weighted nominal average hourly wage was 5.4% (+$1.48) higher in April 2020 than in April 2019, reaching $29.10 per hour.^{Footnote 24} By the end of FY2021, the fixed-weighted nominal hourly wage still stood at $29.10, 5.9% (+$1.61) above its March 2019 level.

Text description of Chart 16

Month	Actual	Fixed-weighted
Mar-19	27.52	27.49
Apr-19	27.6	27.62
May-19	27.57	27.68
Jun-19	27.74	27.81
Jul-19	27.71	27.9
Aug-19	27.57	27.79
Sep-19	28.06	28.05
Oct-19	28.14	28.06
Nov-19	28.22	28.11
Dec-19	28.14	28.04
Jan-20	28.46	28.26
Feb-20	28.59	28.39
Mar-20	29.27	28.54
Apr-20	30.62	29.1
May-20	30.44	29.03
Jun-20	29.73	28.82
Jul-20	29.45	28.78
Aug-20	29.34	28.71
Sep-20	29.59	28.78
Oct-20	29.66	28.85
Nov-20	29.6	28.77
Dec-20	29.7	28.88
Jan-21	30.23	29.1
Feb-21	29.97	29.13
Mar-21	29.89	29.1

• Source: Statistics Canada, Labour Force Survey, Custom tabulation.

Similarly, the nominal average weekly wage increased significantly at the beginning of the pandemic, by 9.5% in April 2020 compared to the same months in 2019. The average wage was influenced not only by the average hourly wage, but also by the number of hours worked per worker. As low-wage employment progressively increase, the annual growth in nominal weekly wage slowly declined. However, it remained at 7.0% in March 2021, reaching $1,120.90 a week compared to $1,047.79 a year earlier, an increase of $73.11 per week.^{Footnote 25}

During FY2021, the inflation rate fluctuated significantly as the massive output losses experienced during the first 2 months led to price declines. The inflation rate fell from 2.2% in February 2020 to -0.4% in May 2020. With the progressive reopening and economic recovery, prices started to go up, and inflation rate was back at 2.2% in March 2021.^{Footnote 26}

As a result, the real average hourly wage also fluctuated significantly during the period. By April 2020, the average real hourly wage was up by 11.2%, and by a more modest 5.6% based on the fixed-weighted measure. From that point, gains in real average hourly wage progressively fell and ended FY2021 at essentially the same level as it was in March 2020. Looking over a 2-year period to smooth out the heavy fluctuations, real average hourly wage was up by 5.3% in March 2021 compared to March 2019. Looking at the fixed-weighted measure, the increase was a more modest 2.7%. Similarly, in March 2021, the average real weekly wage was up by 7.1% compared to March 2019.

1.2.1 Canada’s regional labour market

Canada’s regional labour markets were characterized by high volatility during FY2021 because of the evolving COVID-19 crisis and the different associated public health measures. The fiscal year started with record employment losses across the country, followed by an inconsistent recovery. By April 2020, every province experienced employment declines greater than 13.0% relative to the pre-pandemic levels, mostly led by Quebec who recorded the largest employment losses. By the end of FY2021, British Columbia had temporarily recovered all the employment losses suffered during the pandemic.

Looking at industries, the impacts of COVID-19 in Canada’s regional labour markets were fairly similar during FY2021, although different in magnitude. Due to the nature of the pandemic, employment losses were largely driven by the same characteristics across all regions. That is, workers in industries in which physical distancing was difficult and remote work options were limited were especially at risk, regardless of region. The accommodation and food services; as well as the information, culture, and recreation industries experienced above average employment declines in every province. Conversely, the finance, insurance, real estate, rental and leasing and professional; as well as the scientific and technical services industries experienced relatively mild declines in each province. The health care and social assistance sector, which led the frontline fight against COVID-19 in FY2021, maintained above average employment growth in every province except for Manitoba.

Interprovincial mobility trends

A substantial number of people in Canada relocate across provincial and territorial borders each year. Several factors can influence an individual’s decision to move across provinces and territories, including but not limited to, job opportunities, education/school, or family reasons. Interprovincial mobility attributable to emerging employment opportunities or declines in labour demand gives workers the possibility to access labour markets in other jurisdictions. It also give them the opportunity to find a job that may be better suited for their particular skillset.

The provinces and territories with the highest net migration^{Footnote 28} from July 2020 to June 2021^{Footnote 29} were Nova Scotia (+1.56%), British Columbia (+0.99%), Prince Edward Island (+0.94%), and Yukon (+0.91%). Conversely, negative mobility trends continued in the resource and agriculture dependent provinces of Manitoba (-1.08%), Saskatchewan (-1.25%), and Alberta (-0.40%). Nunavut experienced the lowest net migration over the period (-1.73%). Net migration also decreased in Ontario (-0.17%) after trending upwards in recent years (consult chart 17).

Chart 17 – Text description

Province/territory	2015-2020	2020-2021
NFLD	-0.5	0.24
PEI	0.49	0.94
NS	0.5	1.56
NB	0.13	0.78
QC	-0.12	-0.03
ON	0.09	-0.17
MB	-0.74	-1.08
SK	-1.04	-1.25
AB	-0.26	-0.4
BC	0.53	0.99
YK	1.34	0.91
NWT	-1.05	-0.8
NT	-0.69	-1.73

• Note: Annual is defined as the period from July 1 to June 30.
• *Preliminary data from July 1, 2020 to June 30, 2021.
• Source: Statistics Canada, Table 17-10-0015-01 (for interprovincial migration) and 17-10-0005-01 (for population estimates).

1.3 Job vacancies

In the third quarter of FY2021^{Footnote 30}, as the economy recovers, the number of job vacancies (unoccupied positions for which employers are actively seeking workers) were up by 10.2% compared to the same quarter of the previous fiscal year. This increase happened despite employment being significantly lower than before the pandemic. The same situation prevailed in the last quarter of FY2021, with job vacancies being 7.9% higher than a year earlier. By the end of that quarter, the vaccination campaign had started and almost 1 million doses were already administered. This contributed to the provincial governments’ decision to progressively eased public health measures leading to further business reopenings. The job vacancy rate (the number of job vacancies expressed as a percentage of all occupied and vacant jobs) also increased, reaching a high of 3.6% in the last quarter of FY2021.^{Footnote 31}

Of the total number of vacancies, between two-third to three-quarters were for full-time positions. About 60% of the total vacant jobs required high school diploma or less, and about half required less than 1 year of experience. These 3 characteristics were comparable with FY1920. The duration of job vacancies was similar during the last two quarters of FY2021, compared to last quarter of FY1920. The proportion of positions that were vacant for a longer period of time (3 months or more) was around 25% in both fiscal years.

Higher job vacancies during the last two quarters of FY2021 were recorded in most provinces compared to the same period a year earlier. The largest increases were in New Brunswick, Nova Scotia and Quebec. By industry, health care and social assistance had the strongest increased, close to 50%, followed by construction and retail trade. On the other hand, the industries that were heavily impacted by COVID-19 restriction, such as accommodation and foods services and information, culture and recreation, experienced significant decline in the number of vacancies (consult table 4). Likewise, by occupation, those related to health recorded the strongest increase, followed by those related to education, law and social, community and government, manufacturing, and utilities. Occupations related to art, culture, recreation and sport as well as sales and services recorded declines.

Job vacancies usually become more difficult to fill when the available labour force, primarily unemployed individuals, declines relative to the number of vacant positions. The labour market is tightening in this case. On the other hand, job vacancies should become easier to fill when the number of unemployed individuals increases relative to the number of vacant positions. In this case, the labour market is loosening. An indicator of labour market tightness is the unemployment-to-vacancy (UV) ratio. It measures the potential number of available unemployed people for every vacant position, providing a measure of labour market tightness. A low UV ratio corresponds to a lower number of unemployed people relative to the total job vacancies, which indicates a tighter labour market. A high UV ratio corresponds to a higher number of unemployed people relative to the total job vacancies, which indicates a looser labour market.

The UV ratio increased significantly in FY2021, reaching 3.2 in the last quarter, compared to an average of 2.0 in the first three quarters of FY1920. While the number of vacant positions increased, the number of unemployed increased even more, leading to a much looser labour market by the end of FY2021.^{Footnote 32}

Table 4 - Job vacancies and job vacancy rate by industry, 2019Q1 to 2021Q1*

Industry	Characteristic	2019Q1	2019Q2	2019Q3	2019Q4	2020Q1	2020Q4	2021Q1
All industries	Job vacancies	506,140	581,595	562,910	508,590	512,760	560,215	553,480
All industries	Job vacancy rate (%)	3.1	3.5	3.3	3.0	3.1	3.5	3.6
Agriculture, forestry, fishing and hunting	Job vacancies	15,070	16,080	15,595	12,035	12,105	11,785	11,700
Agriculture, forestry, fishing and hunting	Job vacancy rate (%)	7.2	7	5.5	4.7	5.7	4.6	5.4
Mining, quarrying, and oil and gas extraction	Job vacancies	4,695	6,065	4,555	3,560	4,500	3,950	5,090
Mining, quarrying, and oil and gas extraction	Job vacancy rate (%)	2.3	3.0	2.2	1.7	2.2	2.0	2.7
Utilities	Job vacancies	1,930	2,035	1,470	1,725	2,080	1,605	1,560
Utilities	Job vacancy rate (%)	1.5	1.6	1.1	1.3	1.6	1.3	1.3
Construction	Job vacancies	33,135	42,690	40,985	32,850	34,830	39,425	46,370
Construction	Job vacancy rate (%)	3.3	4.1	3.6	2.9	3.4	3.6	4.6
Manufacturing	Job vacancies	47,590	51,125	50,025	42,165	42,075	46,975	52,205
Manufacturing	Job vacancy rate (%)	3.0	3.1	3.0	2.6	2.6	3.1	3.4
Wholesale trade	Job vacancies	22,280	25,000	25,205	21,985	21,875	20,665	23,425
Wholesale trade	Job vacancy rate (%)	2.7	3.0	2.9	2.6	2.6	2.6	2.9
Retail trade	Job vacancies	46,945	64,395	71,695	67,960	50,380	87,190	54,795
Retail trade	Job vacancy rate (%)	2.3	3.1	3.4	3.3	2.4	4.3	2.8
Transportation and warehousing	Job vacancies	29,585	31,005	28,695	26,700	24,840	31,125	27,170
Transportation and warehousing	Job vacancy rate (%)	3.7	3.9	3.6	3.2	3.0	3.9	3.4
Information and cultural industries	Job vacancies	12,460	12,585	13,545	13,770	12,860	10,125	11,225
Information and cultural industries	Job vacancy rate (%)	3.6	3.6	3.8	3.9	3.6	2.9	3.2
Finance and insurance	Job vacancies	21,430	22,080	21,845	21,120	22,820	22,315	23,760
Finance and insurance	Job vacancy rate (%)	2.8	2.9	2.8	2.7	2.9	3.0	3.1
Real estate and rental and leasing	Job vacancies	7,300	8,130	8,825	7,755	7,535	5,995	6,790
Real estate and rental and leasing	Job vacancy rate (%)	2.4	2.7	2.8	2.5	2.5	2.3	2.6
Professional, scientific and technical services	Job vacancies	41,675	39,885	36,780	35,820	42,565	37,860	47,795
Professional, scientific and technical services	Job vacancy rate (%)	4.2	4.0	3.6	3.5	4.1	3.8	4.6
Management of companies and enterprises	Job vacancies	2,610	1,990	2,440	2,190	2,215	2,395	2,320
Management of companies and enterprises	Job vacancy rate (%)	2.4	1.8	2.2	1.9	1.9	2.0	2.0
Administrative and support, waste management services	Job vacancies	39,605	43,955	38,035	34,850	38,895	42,320	36,750
Administrative and support, waste management services	Job vacancy rate (%)	4.7	5.2	4.3	3.9	4.6	5.2	4.6
Educational services	Job vacancies	15,080	15,960	14,670	14,435	15,380	16,145	15,760
Educational services	Job vacancy rate (%)	1.1	1.1	1.3	1.0	1.0	1.2	1.1
Health care and social assistance	Job vacancies	61,860	68,050	66,120	63,950	71,035	100,345	98,715
Health care and social assistance	Job vacancy rate (%)	3.00	3.3	3.1	3.0	3.3	4.7	4.5
Arts, entertainment and recreation	Job vacancies	15,350	16,060	10,615	11,060	11,270	6,345	6,630
Arts, entertainment and recreation	Job vacancy rate (%)	5.1	5.1	3.0	3.4	3.8	2.8	3.7
Accommodation and food services	Job vacancies	56,590	77,540	76,605	61,725	60,300	46,735	48,785
Accommodation and food services	Job vacancy rate (%)	4.2	5.6	5.2	4.3	4.4	4.4	5.3
Other services (except public administration)	Job vacancies	20,635	26,310	26,885	23,150	23,845	19,155	21,920
Other services (except public administration)	Job vacancy rate (%)	3.6	4.6	4.5	4.0	4.2	3.7	4.4
Public administration	Job vacancies	10,320	10,655	8,330	9,785	11,355	7,765	10,715
Public administration	Job vacancy rate (%)	2.0	2.1	1.5	1.9	2.2	1.6	2.2

• Source: Statistics Canada, Job Vacancy and Wage Survey, Table 14-10-0326-01, seasonally unadjusted.
• *The collection of the Job Vacancy and Wage Survey was suspended during the second and third quarters of 2020 (or first and second quarters of FY2021), due to the COVID-19 pandemic.

1.4 Summary

The shape of the FY2021 economic and labour market was entirely driven by the COVID-19 pandemic and the public health measures that were put in place to limit its spread. Starting in March 2020, the COVID-19 pandemic had an unprecedented negative impact on the economy and the labour market in terms of output and employment losses during the first 2 months. However, the labour market showed resiliency and started to recover in May 2020 with the easing of public health restrictions. Subsequent waves of COVID-19 brought volatility, but by the end of FY2021, the Canadian economy had partially recovered the output and employment losses due to the pandemic. In March 2021, real GDP and employment were still 1.9% and 1.6% below their pre-pandemic levels, respectively. This translated into a deficit of 309,200 people employed and an additional 238,400 individuals who were still employed but working less than half of their usual hours.

Some sectors, specifically those that were more affected by public health measures and for which teleworking was not an option suffered important output and employment losses and were still dragging. Other industries rebounded quickly and were experiencing robust output and employment growth towards the end of FY2021. These uneven impacts affected some groups more than others, such as youth, women and low-wage workers.

The pandemic also led to significant movements in several labour market indicators. The average duration of unemployment spells, the share of long-term unemployed, the number of hours worked and wages were all severely impacted during the first 2 months of the pandemic. This brought significant changes to these figures compared to trends recorded over the past fiscal years. While the labour market recovery brought those indicators closer to familiar levels, by the end of FY2021, they remained significantly affected and return to trends might still take time.

The impact of the pandemic was widespread across the country and the regional impact was similar. However, some differences emerged due to the timing and relative importance of the different provincial public health measures implemented during the FY2021. While some provinces and territories recovered slightly faster than others, most labour market indicators in every regions remained below pre-pandemic level at the end of FY2021.

Despite the high level of unemployment, the number of job vacancies increased and stood higher than they did at the end of FY1920, prior to the pandemic. By the end of FY2021, signs of tightness were still relatively mild.