Canada’s economy rebounded in February


Published on March 12th, 2021 at 02:10pm EST

In February, Canada’s economy almost regained all of the jobs it lost in the two months prior, and the unemployment rate was the lowest it has been since March 2020.

The number of people employed in February increased by 259,000 after falling by 266,000 over December and January. Statistics Canada derived these data from conducting their monthly Labour Force Survey during the week of February 14 to 20.

Employment rates are the number of people who are working as a percentage of the population of people aged 15 and older. Unemployment is calculated by the number of unemployed people as a percentage of the entire labour force.

In February, the unemployment rate fell to 8.2 per cent, 1.2 percentage points lower than January and the lowest since Canada went into lockdown last year.

Compared with February 2020, there were 599,000 (-3.1 per cent) fewer people employed, and 406,000 (+50 per cent) more people working less than half of their usual hours. The total hours worked increased by 1.4 per cent, driven by gains in wholesale and retail trade.

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Employment rebounds in industries most affected by coronavirus-related closures

The number of people working in retail trade as well as accommodation and food services increased in February as coronavirus-related measures were lifted.

Employment in the information, culture, and recreation industry was little changed in February, after several months of steady decline.

February employment increases were concentrated in low-paying jobs of $17.50 per hour or less, which reflects the growth in industries with a high proportion of low-paying jobs.

Employment gains in professional, scientific, and technical services exceed pre-pandemic levels

The number of people working in professional, scientific, and technical services was little changed month over month, but employment in the industry rose 5.6 per cent compared to the same time last year, which is equal to about 86,000 more people working. This is the largest year-over-year increase across all industries. Nearly all of these gains were seen in Ontario and British Columbia. Many businesses in this industry can operate remotely, which allows them to stay open during periods of lockdown.

For this industry, the job vacancy rate was higher than the Canadian average in December, after seeing months of employment growth in the latter part of 2020.

There are about 75,000 more people working in computer and information systems occupations compared to February 2020, including both professional and technical occupations. These year-over-year gains were driven mostly by men and were little changed among women.

Employment rates for very recent immigrants little changed

Coronavirus-related travel restrictions caused the number of newcomers in 2020 to fall to the lowest level since 1998. In February, there were 13.8 per cent fewer very recent immigrants in the labour market compared year-over-year. This group is comprised of permanent residents who landed in Canada within the past five years.

Employment for these newcomers was also down 12.1 per cent compared to the same time frame. As a result, the employment rate for very recent immigrants for the three-month period ending in February was little changed compared to the same time last year.

For immigrants who landed more than five years ago, employment in February was one per cent shy of pre-pandemic levels. Their employment rate was slightly lower than Canadian-born workers, with immigrant employment rates at 57.3 per cent, and Canadian-born workers at 58.3 per cent.

The importance of population growth and employment rate

Canada’s level of employment and employment rate will be important indicators of labour market conditions. Statistics Canada says that in order for Canada to return to pre-pandemic employment rates, the level of employment must increase beyond February 2020 to match population growth that has occurred since then.

Canada’s employment rate in February 2020 was 61.8 per cent. By April, it fell to 51.5 per cent, the lowest level since comparable data became available in 1976. This past February, the employment rate was 59.4 per cent, which is 2.4 percentage points below pre-pandemic levels.

If the population had remained the same year-over-year, the employment rate in February would have been 5.9 percentage points below the pre-pandemic rate. This difference shows the importance of population growth in economic recovery. There has been a small population increase in Canada, although reduced levels of immigrants have slowed growth. In an average year, immigration is responsible for roughly 80 per cent of Canada’s population growth.

The Canadian government committed to welcoming 401,000 new immigrants in 2021. In January alone, immigration rates were comparable to pre-pandemic levels, suggesting that Canada is on track to meet its ambitious immigration levels target.

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