A sign indicates directions to a COVID-19 test centre in Montreal on April 5, 2020.
Graham Hughes/The Canadian Press
More than one million people in Canada lost their jobs in March and the unemployment rate climbed to 7.8 per cent, reflecting the first wave of layoffs resulting from the COVID-19 pandemic.
The March job losses easily surpassed a record one-month decline set in January of 2009 – when employment dropped by roughly 125,000 – according to Labour Force Survey data from Statistics Canada that dates back to 1976. March also saw the largest one-month increase of the country’s jobless rate, which had been 5.6 per cent in February.
Record-setting job losses were widely anticipated in Thursday’s report. Statscan surveyed households on labour conditions between March 15 and 21, which overlapped with many companies shutting their doors and laying off staff as COVID-19 started to upend the economy.
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Among those employed between March 15 and 21, roughly 2.1 million people either didn’t work any hours or worked less than half their usual hours.
“These increases in absences from work can be attributed to COVID-19 and bring the total number of Canadians who were affected by either job loss or reduced hours to 3.1 million,” Statscan said.
Prime Minister Justin Trudeau on Wednesday warned the jobs report would be ugly. “It’s going to be a hard day for the country,” he said.
Since Statscan’s survey week, layoffs have intensified as governments have implemented tighter restrictions on business operations and social interactions to curb the virus’s growth. Since March 16, more than 5 million Canadians have applied for emergency financial assistance with the federal government, a sign of unprecedented labour disruption.
As such, the April labour report (released early next month) is widely expected to show even worse job-loss figures.
Thursday’s report showed the employment rate declined to 58.5 per cent from February’s 61.8 per cent, while the labour participation rate – the percentage of people either working or looking for a job – declined to 63.5 per cent in March from 65.5 per cent.
Ontario experienced the largest job losses in raw numbers, with the number of employed people declining by about 403,000, followed by Quebec at 264,000 and British Columbia at 132,000.
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As expected, the accommodation and food services sector was hit hard, with nearly 300,000 people losing their jobs, a decline of 24 per cent. The information, culture and recreation sector lost 13.3 per cent of its employment, while educational services dropped 9.1 per cent.
Employment among youth aged 15 to 24 decreased by nearly 400,000 or 15.4 per cent.
Among the roughly one million people who lost employment, there was a near even split of those who joined the ranks of the unemployed and those who dropped out of the labour force.
The distinction between people who are unemployed or not in the labour force is particularly important within the context of COVID-19.
According to the LFS, the unemployed includes those who are available for work and have looked for employment in the past four weeks, along with those on temporary layoff who expect to rejoin their employer. It also includes those who are set to start a job within four weeks.
Given those stipulations, many workers affected by COVID-19 are not officially considered unemployed. For instance, a jobless parent who’s suddenly handling home-school and daycare duties, and thus isn’t available to work, is not considered unemployed. Nor is the jobless person who’s stopped looking for work because their industry has stopped hiring.
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Instead, they are considered to be not in the labour force.
The federal government recently unveiled a program that will subsidize wages for eligible companies by up to 75 per cent, to a maximum of $847 per week per employee. Some companies, such as Air Canada and WestJet Airlines, will use the program to bring back workers. However, the extent to which the wage-subsidy program dampens layoffs or encourages rehiring remains to be seen.
With unemployment skyrocketing during the coronavirus pandemic, personal finance columnist Rob Carrick offers some tips on how to deal with creditors and make a bare-bones budget.The Globe and Mail
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TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
OTTAWA – Canada’s inflation rate fell to two per cent last month, finally hitting the Bank of Canada’s target after a tumultuous battle with skyrocketing price growth.
The annual inflation rate fell from 2.5 per cent in July to reach the lowest level since February 2021.
Statistics Canada’s consumer price index report on Tuesday attributed the slowdown in part to lower gasoline prices.
Clothing and footwear prices also decreased on a month-over-month basis, marking the first decline in the month of August since 1971 as retailers offered larger discounts to entice shoppers amid slowing demand.
The Bank of Canada’s preferred core measures of inflation, which strip out volatility in prices, also edged down in August.
The marked slowdown in price growth last month was steeper than the 2.1 per cent annual increase forecasters were expecting ahead of Tuesday’s release and will likely spark speculation of a larger interest rate cut next month from the Bank of Canada.
“Inflation remains unthreatening and the Bank of Canada should now focus on trying to stimulate the economy and halting the upward climb in the unemployment rate,” wrote CIBC senior economist Andrew Grantham.
Benjamin Reitzes, managing director of Canadian rates and macro strategist at BMO, said Tuesday’s figures “tilt the scales” slightly in favour of more aggressive cuts, though he noted the Bank of Canada will have one more inflation reading before its October rate announcement.
“If we get another big downside surprise, calls for a 50 basis-point cut will only grow louder,” wrote Reitzes in a client note.
The central bank began rapidly hiking interest rates in March 2022 in response to runaway inflation, which peaked at a whopping 8.1 per cent that summer.
The central bank increased its key lending rate to five per cent and held it at that level until June 2024, when it delivered its first rate cut in four years.
A combination of recovered global supply chains and high interest rates have helped cool price growth in Canada and around the world.
Bank of Canada governor Tiff Macklem recently signalled that the central bank is ready to increase the size of its interest rate cuts, if inflation or the economy slow by more than expected.
Its key lending rate currently stands at 4.25 per cent.
CIBC is forecasting the central bank will cut its key rate by two percentage points between now and the middle of next year.
The U.S. Federal Reserve is also expected on Wednesday to deliver its first interest rate cut in four years.
This report by The Canadian Press was first published Sept. 17, 2024.
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
