Uneven Employment Recovery Hitting Tourism

Employment across the economy stayed essentially flat between September and October. The total gain of 9,700 workers (an increase of 0.05%) was due to a decrease of 51,200 full-time workers and a gain of 61,000 part-time workers.

Within the tourism sector, employment decreased by 38,200 due to drop of 72,300 full-time workers and a gain of 34,100 part-time workers. This was a slightly larger decline than average for October, but larger employment declines in tourism have occurred before: in 2018, 2016, and 2010. While any decline in tourism employment is concerning as the sector seeks to recover from the pandemic, we are not seeing larger than expected declines in tourism sector employment following the summer season.

Data reflects labour market conditions during the week of October 10 to 16, 2021.

Highlights:

  • Tourism employment across Canada fell by 38,200 from September to October, a decline of 2.2%.
  • As of October, 1,724,000 individuals were working in the tourism sector’s five industry groups, an increase of 61,500 employees compared to 2020.
  • Compared to October 2019, there were over 350,000 fewer employed workers in the tourism sector.
  • Full-time tourism employment was down 21.3% compared to 2019, while part-time employment was down 10.1%.
  • Four of the five tourism industry groups experienced employment declines in October.
  • Employment losses are particularly large in the travel services industry, where employment is down by over 60%.
  • In August, job vacancies within the accommodation and food services sector surged to 156,755. The vacancy rate in that sector exceeded its June high to reach an unprecedented 12.3%.
  • In October, four provinces had lower levels of tourism employment than in 2020: Newfoundland and Labrador, Prince Edward Island, New Brunswick, and British Columbia.
  • Sectors that have gained employment since October 2019 have added 553,800 jobs. The sectors that have lost employment have 494,600 fewer workers.
  • The number of unemployed workers declined by 68,100 between September and October, dropping the seasonally unadjusted unemployment rate to 6.0%.

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.

Tourism Employment Rate

Tourism employment across Canada fell by 38,200 from September to October, a decline of 2.2%. It was the second month of declining in tourism employment, following a decline of 130,000 in September. Unlike September, when employment declines occurred exclusively among workers under the age of 25, employment declines occurred in multiple age groups in October (see Figure 2).

As of October, 1,724,000 individuals were working in the tourism sector’s five industry groups, an increase of 61,500 employees compared to 2020. However, compared to the same month in 2019, over 350,000 fewer individuals worked in the tourism sector.

Four of the five tourism industry groups experienced employment declines in October. Only the recreation and entertainment industry experienced a small increase in employment as the gains in part-time work were greater than the loss of full-time employment. All industries experienced a loss of full-time workers while four gained part-time workers. Only the transportation industry lost both full and part time workers (see Figure 3).

As a percent, the greatest employment loss was in the accommodations industry, where employment dropped by 7,500, or 5.0%.

Employment remains suppressed in all tourism industries compared to the last month prior to the pandemic hitting Canada (February 2020). Employment losses are particularly large in the travel services industry, where employment is down by over 60% (see Figure 4). While some industries gained employment during the summer months, travel services has seen three months in a row of employment losses.

Controlling for seasonal variation by looking at the same month in past years, employment remains substantially suppressed in all tourism industries. Overall, tourism employment is down 17.0% compared to 2019, while employment across the entire economy is 0.3% higher than in October 2019. The industry groups with the greatest loss of employment are travel services and accommodations. Employment levels are down the least (-8.7%) in the recreation and entertainment industry. All industry groups except for travel services have more employed workers than they did at this time in 2020 (see Figure 5).

Hours of Work

While employment dropped by 2.2% in October, the total number of hours worked by tourism employees fell 7.4%, reflecting the decreasing number of full-time workers and the increase in part-time workers. However, the good news is that compared to October 2020, total hours worked is up 10.4%.

Another change from past months is that employment is now less suppressed than hours of work compared to the same month in 2019. For most of the pandemic, the number of hours worked has fallen further than employment levels have. As of October, only in the accommodations and travel services industries do hours worked continue to be lower than employment. Despite that change, full-time employment is still reduced to a greater degree than part-time employment. As of October, full-time tourism employment was down 21.3% compared to 2019, while part-time employment was down 10.1%.

Provincial Tourism Employment

Provincially, tourism employment declined in every province except for Saskatchewan and British Columbia—although employment gains in those two provinces were small. Particularly large drops were seen in the Atlantic Provinces—with the exception of Nova Scotia—where seasonal changes in employment tend to be large.

Compared to 2019, tourism employment was lower in every province during the month of October. The province of Manitoba had been close to pre-pandemic employment levels in September, being down only 0.4% compared to September 2019. As of October, however, tourism employment is now down 8.2% compared to October 2019. Tourism employment was notably lower in Newfoundland and Labrador (-27.9%) and Quebec (-25.0%).

In October, four provinces had lower levels of tourism employment than in 2020: Newfoundland and Labrador, Prince Edward Island, New Brunswick, and British Columbia.

Job Vacancies

While job vacancy data is not as timely as employment data, it does clearly show that some segments of our industry were struggling to find workers this summer. In August, job vacancies within the accommodation and food services sector surged to 156,755. The vacancy rate in that sector exceeded its June high to reach an unprecedented 12.3%. Over 12% of positions within the sector were vacant. Vacancies also jumped significantly in the arts, entertainment and recreation sector, increasing by 63.4%, from 10,940 in July to 17,875 in August. The vacancy rate in that sector was 6.3% (see Figure 10). Across all sectors of the Canadian economy, vacancies rose by 8.2% to 871,555.

Employment by Sector

As of October, eight sectors of the economy have higher employment than two years ago, while eight have lower employment. Employment is notably down in accommodation and food services; agriculture; and other services. Employment is notably higher in professional, scientific and technical services; finance, insurance, real estate, rental and leasing; and educational services (see Figure 11).

In terms of total employment losses and gains, those sectors that have gained employment since October 2019 have added 553,800 jobs. The sectors that have lost employment have 494,600 fewer workers than they did two years ago (see Figure 12).

Total Unemployed and Unemployment Rate

Unemployment across the entire economy fell for the second month in a row in October.

The number of unemployed workers declined by 68,100 between September and October, dropping the seasonally unadjusted unemployment rate to 6.0%. Although unemployment dropped by 68,100, seasonally unadjusted employment only increased by 9,700. Thus, the drop in the number of unemployed workers reflects people dropping out of the labour market rather than finding jobs. This occurred in September as well, although it was expected during that month due to student workers returning to school.

Despite the drop, the number of unemployed workers does remain elevated. There were 208,000 more unemployed individuals in October 2021 than there were in October 2019.

Not in the Labour Force – Not Employed, Not Seeking Work

In October, the number of individuals who are not in the labour force (not employed or actively seeking work) increased by 47,000. The increase falls within the usual seasonal pattern for October (see Figure 14).

The number of individuals not in the labour force is higher than two years ago, up by 320,500. Almost all of this increase is among individuals over the age of 65, with a small exception among youth. In all other age categories, the number of individuals not in the labour force is lower than it was in October 2019 (see Figure 15).

The number of people who wanted to work but were not in the labour force declined for the sixth month in row, falling from 415,000 in September to 381,900 in October. The number of people in this category is only slightly elevated from October 2019, up 3.6% (see Figure 16).

Labour Force Trends to Watch

There were no major shifts in the labour market in October. The change in tourism employment was within expected seasonal ranges. Overall, employment across the entire economy was essentially unchanged. Still, unemployment continues to decline, and the number of people who are below the age of 65 and not participating in the labour force is lower than it was two years ago. As unemployment continues to decline, the labour market will get tighter, making is harder to restaff in industries where employment remains suppressed.

Although employment has recovered to pre-pandemic levels across the entire economy, the same is not true for many sectors—particularly tourism. Some sectors have gained employees at the expense of others. However, the labour force has also grown relative to pre-pandemic times. Seasonally adjusted data shows the total labour force declined slightly in October, but it is still larger than it was in October 2019 or February 2020. With travel restrictions around the world starting to lift, labour force growth is likely to increase over the coming months as new permanent residents arrive in Canada.

The Canada Recovery Benefit (CRB) ended on October 23rd, as did the Canada Emergency Wage Subsidy (CEWS). The newly announced Tourism and Hospitality Recovery Program and the Hardest Hit Business Recovery Program will keep wage subsidies in place for a smaller number of businesses. The effect of these changes remains to be seen. The cancellation of the CRB could push more people to become active in the labour market. Ending CEWS could result in some businesses letting workers go. Neither of these potential trends is certain, and they will not start to be seen until November or December at the earliest.

View more employment charts and analysis on our Tourism Employment Tracker.