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Ongoing Tourism Job Losses Will Impede Recovery Efforts

Employment in both tourism and the broader economy fell significantly in January. The seasonally adjusted data reports employment in Canada dropping by 213,000, while the unadjusted (which we use to compare overall employment to tourism) shows a much steeper loss of almost half a million.

Tourism employment decreased for the fifth month in a row, dropping 135,300, a decline of 8.6% from December. Tourism accounted for 27.6% of Canada’s total drop in employment from December to January.

Data is from the week of January 10 to 16, 2021.

Employment decreased in all tourism industry groups, notably in the accommodation industry, where employment decreased by 18.5% and the number of employed individuals fell below 100,000.

Provincially, employment dropped by 14.4% in both Newfoundland and Labrador and Ontario, and was down 12.3% in Alberta.


  • Overall tourism employment dropped by 135,300 jobs due to a loss of 58,200 full-time jobs and 76,900 part-time jobs.
  • In January 2021, tourism employed 1,435,300 workers, almost 30% fewer than the over 2 million workers employed in January 2020.
  • Monthly gross domestic product across all tourism-related industries stood at 62.0% of its January 2020 levels in November.
  • Provincially, employment dropped by 14.4% in both Newfoundland and Labrador and Ontario, and was down 12.3% in Alberta.
  • In January 2021, the unemployment rate in the tourism sector was at 18.6%.
  • In February of 2020, there were 78,044 active tourism businesses. As of October, there were 70,064 active tourism businesses, a decline of 10% from before the pandemic.

Please note: To allow comparisons with tourism sector data, which sees significant employment fluctuations over the year, we use seasonally unadjusted data for both tourism employment and overall employment. As of January, Statistics Canada has introduced revisions to the historical Labour Force Survey (LFS) data that Tourism HR Canada uses for our labour market information reporting. Consequently, there may be slight variations between what is reported on the Statistics Canada site and our site, but the narrative of significant job losses remains unchanged.

Tourism Employment Rate

In January, employment (unadjusted for seasonality) across the entire Canadian economy decreased by 490,100. Overall tourism employment dropped by 135,300 jobs due to a loss of 58,200 full-time jobs and 76,900 part-time jobs.

From December to January, employment declined in all industry groups, although transportation and travel services each added some part-time employment. The greatest percentage decrease was in the accommodation industry, where employment decreased by 21,700, a loss of 18.5%. The food and beverage services industry saw employment decline by 10.3%, with the number of employed workers down by 78,000 from December. Employment in the recreation and entertainment industry was down 7.8%, followed by travel services (-6.6%), and transportation (-1.8%).

In January 2021, tourism employed 1,435,300 workers, almost 30% fewer than the over 2 million workers employed in January 2020.

The accommodation, food and beverage services, and recreation and entertainment industries lost large amounts of both part-time and full-time employment.

Although seeing an overall decrease in employment, the transportation industry added 7,200 part-time jobs and the travel services industry added 900 part-time jobs.

Because the industry groups that make up tourism are different sizes, looking at the monthly change in employment as a percentage increase or decrease relative to the previous month provides a more equitable picture of how each industry has been impacted. It also helps illustrate the size of the employment increase or decrease relative to total employment within a given industry group. Overall, tourism employment has decreased by 29.1% since February 2020. Among industry groups, the transportation industry has lost the least employment relative to February 2020, down “only” 18.0%. However, transportation contains a wide range of industries. Some have seen relatively little decrease in employment, while others—such as air transportation—are down by almost half.

The accommodation industry has the greatest loss of employment, down 42.4% since the start of the pandemic. January also represented the fifth month of employment declines for that industry.

On a year-over-year basis, seasonally unadjusted employment across all Canadian industries was down 4.4% compared to January 2020. In comparison, tourism employment was down 29.3% from the same month a year ago. By industry group, year-over-year employment losses in January ranged from -44.4% in accommodations to -15.6% in travel services.

With significant losses of employment across the entire economy, the share of employment loss attributable to the tourism sector fell back somewhat in January (see Figure 6). COVID-19 affected all parts of the economy, but the impacts have not been evenly spread across the economy. Monthly GDP by industry data clearly shows that some industries have managed to increase their economic activity following a short downturn in the spring. As of November, industries such as finance and real estate were generating more economic activity than before the pandemic. Even the retail industry was higher, although this effect was unevenly spread within the retail industry itself.

Overall, GDP remained below pre-pandemic levels at 96.9% of January 2020 levels. Industries such as manufacturing and construction were slightly below pre-pandemic levels, having somewhat recovered from the spring downturn.

Tourism has not been so lucky. Monthly gross domestic product across all tourism related industries stood at 62.0% of its January 2020 levels in November. Some industries such as food services were doing slightly better, but were still down significantly, while others, such as air transportation, remain down by more than 80%.

Provincial Tourism Employment

Most provinces saw a loss of tourism employment in January, save for Prince Edward Island and New Brunswick. Provincially, employment dropped by 14.4% from December in both Newfoundland and Labrador and Ontario, and was down 12.3% in Alberta.

In most provinces, tourism employment remains well below the levels seen one year prior. The sole exception is New Brunswick, where in January, employment levels rose slightly higher than they had been in January 2020. On a year-over-year basis, the greatest employment losses are in Alberta, Nova Scotia, and Manitoba. Employment is closer to last year’s levels in Atlantic Canada, with the exception of Nova Scotia.

Tourism Unemployment Rate

In January 2021, the unemployment rate in the tourism sector was at 18.6%, which is 12.8 percentage points higher than the rate reported in January 2020, and higher than the previous month (December 2020), when the unemployment rate stood at 14.6%.

At 18.6%, tourism’s unemployment rate was well above Canada’s seasonally unadjusted unemployment rate of 9.8%.

All tourism industry groups reported higher unemployment rates than the same month last year.

Unemployment Rate
Tourism Industry Group[1]

January 2020

December 2020

January 2021

Tourism 5.7% 14.6% 18.6%
Accommodations 7.2% 27.6% 29.9%
Food & Beverage Services 6.3% 13.6% 18.1%
Recreation & Entertainment 6.9% 16.7% 22.4%
Transportation 2.8% 9.2% 10.6%
Travel Services N/A 11.0% 17.4%

On a provincial basis, tourism unemployment rates ranged from 10.8% in British Columbia to 25.6% in Prince Edward Island.

The seasonally unadjusted unemployment rates for tourism in each province, with the exception of Newfoundland and Labrador, were above the rates reported for the provincial economy.

Shrinking Tourism Workforce

Since October, declines in tourism employment have greatly exceeded the monthly average decline in tourism employment. Tourism usually sheds some employment in January because demand for tourism goods and services drops following the December holiday season. On average, January tourism employment decreased by 1.0% over the past twenty years. This January’s employment decrease of 8.6% continues a four-month trend of employment losses that greatly exceed the average.

Average Monthly Employment Change in Tourism (2001-2019 vs. 2020/21)

Average Monthly Employment Change 2001 to 2019 Monthly Employment Change 2020/21
August -0.6% 3.2%
September -5.6% 0.2%
October -0.8% -4.1%
November -1.8% -2.1%
December 0.2% -3.5%
January -1.0% -8.6%

January is the fifth month in a row in which the tourism labour force declined. These losses are a combination of employment decreases and a decline in the number of unemployed workers (former tourism workers who are actively seeking work). The labour force usually declines in early fall as students (who do not seek work) leave employment and return to school, but the decline usually slows in November and December. This year it has not. Regional lockdowns are clearly having an impact, causing a decline in employment, and some of those workers may simply be waiting out the lockdown. If they are not actively seeking work, they are not counted as part of the labour force.

While the tourism labour force has declined and employment has dropped drastically, it is still hard to tell if former workers are finding jobs in other industries.

The number of individuals currently receiving employment insurance is at historic levels, just under 1.6 million as of November (using seasonally unadjusted data), which is more than during the 2009 financial crisis. Many Canadians who have lost work due to COVID-19 remain unemployed (see Figure 13). And although tourism has lost the most employment of all segments of the Canadian economy, only a few sectors have higher levels of employment than they did in February. All sectors have added employment since the low point in April 2020, but most continue to employ fewer workers than before the pandemic, and overall employment across all sectors is still down 4.8% (see Figure 14).

Number of Active Tourism Businesses

The tourism sector has not just seen a significant decline in employment, it has also seen a significant decline in the number of active businesses. Statistics Canada produces estimates of the number of business openings and closures each month. In addition, this data tracks the number active businesses, defined as “those businesses that reported having one or more employees in a given month”.

Data for the tourism sector was recently added to the data set, allowing us to track the ongoing number of active business in our sector. This data will soon be available on our Tourism Employment Tracker webpage, by industry group and province for which data is available.

The data does not distinguish between a permanent closure or a temporary closure due to seasonality. Yet regardless of whether they are permanently or temporarily closed, there were certainly fewer active tourism businesses operating this summer, although some businesses reopened going into the fall. In February of 2020, there were 78,044 active tourism business. As of October, there were 70,064 active tourism businesses, a decline of 10% from before the pandemic.

Where to From Here?

Spring is still months away, but it is not long before businesses start to plan and prepare for the summer season. This year brings a great deal of uncertainty. No matter how successful the vaccination rollout becomes, some key demand drivers will be missing this summer. Trips that require longer lead times to plan (bus tours, cruises, conferences, large festivals) will either not happen or occur at much reduced rates. Questions remain about when borders will open. It seems likely that the U.S.-Canada border will be open before the summer, but other major travel markets are less certain and some level of restriction on those who travel internationally is quite possible.

Given that many questions remain, there is a need to recognize that the tourism engine has been idled. The government should not expect the sector to immediately revive once restrictions are lifted. Marketing and promotion to Canadians that encourages them to travel within their country this summer and plan longer, more extensive trips will be essential. Treating travel in your own country as if it were a three-week vacation to a foreign country rather than a series of day trips will help sustain the industry.

Businesses, in turn, need to continue the new and unique offerings that were developed last summer. And these should not be scrapped once COVID is gone. They can increase diversity in Canada’s tourism offering in the post-pandemic world.

Most importantly, businesses will still need ongoing financial support, such as the Canadian Emergency Wage Subsidy throughout the recovery, and clear communication on timelines and protocols as restrictions are lifted. Businesses need time to plan and prepare for reopening.

[1] As defined by the Canadian Tourism Satellite Account. The NAICS industries included in the tourism sector are those that would cease to exist or operate at a significantly reduced level of activity as a direct result of an absence of tourism.

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