Ottawa-Gatineau’s economy continued to create new jobs at a steady clip in April – but a sharp rise in the number of people entering the labour force caused the unemployment rate to tick upwards last month, Statistics Canada says.
The total number of employed residents in the National Capital Region grew by 7,600 people last month, the agency said in its April labour market survey.
But the total labour force also jumped by an additional 10,200 as more people resumed their search for work – and as a result the region’s unemployment rate rose to 6.7 per cent from 6.5 per cent in March.
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Despite renewed public health restrictions that shut down in-person services at many businesses in a bid to curb the spread of COVID-19, most key sectors of the local economy held their own last month.
The retail sector – which bore the brunt of new measures that severely limited customer access – gained 3,200 jobs in April, while accommodation and food services saw a slight drop of about 400 positions.
The construction sector made the biggest gains last month, adding a net 4,100 jobs.
Civil service, tech gains
Meanwhile, the two biggest engines of Ottawa’s economy, the federal government and tech sector, both grew slightly in April, with the public administration sector expanding by 1,500 jobs and the tech sector adding 200 positions.
The health-care sector took the biggest hit last month, shedding 2,900 jobs, while the professional services sector was down a net 1,300 positions.
While promising, the job gains need to be put into context.
Statistics Canada uses a three-month rolling average when presenting its local employment numbers. This means that the new job numbers reflect data from February, March and April – which includes several weeks when the stay-at-home order was in place.
Nationally, Statistics Canada says the economy lost 207,000 jobs in April as a new rise in COVID-19 cases led to renewed public health restrictions that closed businesses.
The national unemployment rate rose to 8.1 per cent from 7.5 per cent in March.
Statistics Canada says the number of employed people in April working less than half their usual hours increased by 288,000 or 27.2 per cent.
The losses in April nearly wiped out the 303,000 jobs added in March when the economy outpaced expectations and put the country about 503,100 jobs, or 2.6 per cent below pre-pandemic levels.
More losses were seen in full-time work than part-time work, with the figures respectively at 129,000 and 78,000, with the retail sector and young workers hit hardest.
Total hours worked fell 2.7 per cent, a drop that TD senior economist Sri Thanabalasingam said could indicate a reversal in the overall economic recovery in April.
The ranks of the long-term unemployed climbed to 486,000 as about 21,000 more workers crossed the threshold of being without a job for six months or more.
Among them are 312,000 workers who have been unemployed for a year, having lost jobs during the plunge in the labour market in the first wave of the pandemic, when three million jobs were lost over March and April 2020.
Prior to the pandemic, only 99,000 workers had been unemployed for at least a year, the statistics agency noted.
Regionally, Ontario saw a drop of 153,000 positions in April, and British Columbia witnessed its first decrease in employment since a historic plunge in the labour market in April 2020.
Statistics Canada said the unemployment rate would have been 10.5 per cent in March had it included in calculations Canadians who wanted to work but didn’t search for a job.
Longer-term impact
The latest setback in the labour market will carry a longer-term impact on the workers and businesses affected, said Leah Nord, senior director of workforce strategies with the Canadian Chamber of Commerce.
Some companies may close for good, and workers may take longer to find new positions, she said.
“Our collective focus is currently on the light at the end of the vaccine tunnel, but we risk losing sight of the continued turbulence in the labour market – and what that means for the Canadians bearing the brunt of it,” she said in a statement.
Lockdowns and tight restrictions have continued into this month and could mean more losses show up when Statistics Canada reveals May’s jobs report, said CIBC senior economist Royce Mendes.
“The good news,” he wrote in a note, “is that the curve is bending in some regions of the country and vaccinations are picking up pace, both of which should help the labour market begin to recover in June.”
– With additional reporting from the Canadian Press
