Statistics Canada said the country added 94,000 jobs in July as public health restrictions linked to the COVID-19 pandemic continued to be lifted, but economists warned there is still a “long slog” toward a full recovery ahead.
The federal agency said Friday that the job gains caused the unemployment rate to fall to its lowest level since March of this year, at 7.5 per cent for July compared with 7.8 per cent in June.
The gains were seen primarily in Ontario and in the service sector, with 35,000 jobs added in the accommodation and food industry. Full-time work, which rose by 83,000 or half a percentage point across multiple sectors, also delivered growth.
Many economists had expected the country to add at least 100,000 new jobs during July and thought the unemployment rate would sit around 7.4 per cent last month.
Despite falling short of those predictions, CIBC senior economist Royce Mendes said “there’s not a whole lot to complain about when the economy creates almost 100,000 jobs in a month.”
“That’s a sign of recovery, but not a sign of mission accomplished,” he said.
July’s increase, he said, continues the pattern begun with the 231,000 jobs added in June and can be considered a strong gain, making up for employment losses incurred during the third wave of the COVID-19 pandemic.
But Canada is still 246,400 jobs, or 1.3 per cent, shy of pre-pandemic employment levels seen in February 2020 and threats to the economy’s recovery loom.
The number of people considered long-term unemployed — those out of work for more than six months — in July was 244,000 higher than before the pandemic and accounted for 27.8 per cent of total unemployment. Of that number, more than two-thirds have been out of work for a year or longer, Statistics Canada said.
Mendes pointed to scores of companies seeking workers and the virulent Delta variant as potential barriers to recovery.
“It might sound odd to be discussing labour shortages at a time when the unemployment rate is still very elevated, but generous government support, concerns about contracting COVID in high contact work settings and childcare duties are among the reasons there are labour shortages out there,” he said.
Restaurants, retailers and hospitality companies have all reported that hiring has been difficult because Canadians are seeking more stable employment, jobs they can complete from home and assurances that their workplaces won’t be temporarily closed if another wave of the virus arrives.
Some have had to resort to remaining closed, hiking pay or offering signing bonuses, extra vacation and other incentives to entice workers.
Even if another wave comes, Mendes doesn’t expect another economic contraction or major round of job losses to materialize because vaccinations are keeping large numbers of Canadians out of hospital and the government is opting for more targeted measures to quell the virus.
He also sees room for hiring growth in sectors that already saw big gains like food and accommodations and areas that haven’t yet seen a boost like recreation and culture.
But he is still cautious around how much of a recovery these sectors will experience.
“We should expect that over the course of this year and even well into next year, the level of employment in those high-contact service industries will not reach pre-pandemic levels because there will still likely be some restrictions needed to keep virus cases low,” he said.
“When we look out on the horizon, the way the economy might look when it’s fully healed, will be very different than it looked pre-pandemic.”
Meanwhile, Douglas Porter, BMO Capital Markets’ chief economist, predicted the country will see one more employment bump before it settles into a “long slog” as job gains tied to reopening dissipate and the economy begins to more seriously deal with the Delta variant of COVID-19.
He saw positive signs in the number of full-time positions added and the 1.3 per cent increase in total hours worked, though that figure was still 2.7 per cent below pre-pandemic levels.
“It will only take a few more reports like today’s to get employment all the way back to pre-pandemic highs,” Porter said in a note to investors.
“But this is a sturdy step in the right direction.”
This report by The Canadian Press was first published Aug. 6, 2021.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
