Canadian economy adds 419,000 jobs in July; more than half of pandemic losses now recouped – The Globe and Mail

The Canadian economy added 419,000 jobs in July as pandemic restrictions eased across the country, marking the third consecutive month of rising employment.

The results were more subdued than June’s gain of 953,000 positions, but were also accompanied by a reduction in the unemployment rate, to 10.9 per cent from 12.3 per cent, Statistics Canada reported Friday. The labour market has now recovered about 55 per cent of three million jobs that were lost between February and April as COVID-19 forced stringent lockdowns across the country and widespread closures of non-essential businesses.

Most of July’s growth was in part-time work (345,000), which had suffered significantly worse losses in March and April than full-time work, given its prevalence in hard-hit industries such as retail trade, tourism and restaurants.

The number of Canadians who were employed but worked less than half their usual hours because of the virus has declined by 412,000 to just under one million. Combined with job losses, the total number of affected workers is about 2.3 million, sharply improved from 5.5 million at the depths of the crisis in April.

“The pace of increase in employment slowed in July relative to the prior month, and that’s likely to become a trend as the pace of easing in restrictions also slows down and the number of Canadians on temporary layoff falls,” said Royce Mendes, senior economist at Canadian Imperial Bank of Commerce, in a client note. 

“The good news is that with virus cases low in Canada at the moment, the country isn’t facing an immediate risk of having to tamp down activity again.”

Friday’s report was the first to ask respondents about visible minority status. The results pointed to a disproportionate impact on several groups. Unadjusted for seasonality, the jobless rate for those aged 15 to 69 was 11.3 per cent in July. The rate was substantially higher for South Asian (17.8 per cent), Arab (17.3 per cent) and Black (16.8 per cent) Canadians.

For those who are not a visible minority or Aboriginal – in essence, white people – the jobless rate was 9.3 per cent in July. Statscan said higher joblessness for visible minorities may be partly attributable to higher representation in hard-hit industries, such as food services.

July saw stronger gains in services employment (348,000) than in the goods-producing sector (71,000). Employment in both sectors now stands at roughly 93 per cent of prepandemic levels.

Ontario led the provinces with 151,000 positions added last month. Friday’s job report was the first to reflect a partial reopening of services in Toronto. Employment in the broader Toronto area increased by 68,400 in July.

The pace of the recovery will be scrutinized as various government programs change or wind down. Eligibility for the Canada Emergency Response Benefit – which pays $2,000 every four weeks to workers deeply affected by the pandemic – ends in September, and many of those who have continuously been on CERB since mid-March have received their final payments.

In the coming weeks, some workers will move from CERB to Employment Insurance. The federal Liberal Party has said it’s eyeing looser criteria to access EI, but will otherwise create a separate “parallel benefit” to help gig and contract workers who don’t qualify. The self-employed, who numbered close to three million before the pandemic, are ineligible for regular EI benefits.

“If this is indeed a ‘checkmark’ or ‘swoosh’ recovery, expect these and other impressive near-term gains to give way to a much more gradual recovery path and one that will feel very different across industries,” said Brian DePratto, senior economist at Toronto-Dominion Bank, in a client note.

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