A Perfect Storm: Record Job Vacancies, Tightening Labour Market

In November, tourism employment increased by 11,200, which is highly unusual for this month. Since 2006, the only other time that tourism employment increased in November was in 2012, when employment increased by 5,500. Generally, tourism employment falls by roughly 28,000 between October and November.[1]

Seasonally unadjusted employment across all industries usually declines in November as well. Since 2006, overall employment has only increased in 2017 and 2018. In 2019, employment fell by 137,400 in November.

This year, seasonally unadjusted employment increased by 93,600. When seasonal adjustments are taken into account, employment increased by 154,000.

Data reflects labour market conditions during the week of November 7 to 13, 2021.

Highlights:

  • Tourism employment increased in November, an unusual occurrence for this time of year.
  • Tourism employed 300,000 fewer workers this November than in November 2019.
  • Total employment also increased in November, also an unusual trend for the time of year.
  • The total number of employed workers in Canada has risen by 290,200 since November 2019.
  • The number of unemployed workers has fallen for three months in a row and is only 36,300 individuals higher than it was in November 2019.
  • The number of people not in the labour force has fallen, except for those over the age of 65.
  • The number of people not in the labour force who want to work has also returned to pre-pandemic levels.
  • The overall labour market looks very much like it did pre-pandemic in terms of unemployment, the number of people not in the labour force, and participation rates for most age groups.
  • The general outlook is one in which the labour market has tightened substantially over the past three months, making it more difficult for sectors where employment has not recovered to find workers.

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

Following two months of falling employment, the number of workers employed in the tourism sector rose by 11,200 in November, increasing 0.6%. As of November, 1,735,200 individuals were working in the tourism sector’s five industry groups; this is 111,200 more employed workers than at this time last year. However, compared to the same month in 2019, over 300,000 fewer individuals worked in the sector.

The gain in employment was due to increases in part-time employment, which was up by 21,500 since October. Full-time employment within tourism declined by 10,400, although some industries saw gains in full-time employment (see Figure 2).

While tourism sector employment increased, employment fell by 12,300 (-8.6%) in the accommodations industry group and by 1,700 in the recreation and entertainment industry group.

The travel services industry gained 1,700 employees in total (a loss of part-time employees was offset by a gain of 2,800 full-time employees), following employment declines in six of the past seven months. Any increase in employment within the travel services industry is good news, as employment within that industry has fallen by 56.4% since March of 2021.

Across all industry groups within tourism, employment has yet to recover to pre-pandemic levels (see Figure 3). Employment is also lower in all industry groups than in November 2019 (see Figure 4).

The recreation and entertainment industry is closest to pre-pandemic levels of employment. Relative to February 2020, employment in that industry is only down 6.9%, and compared to November 2019, employment is down 5.1%. Recreation and entertainment is also the industry that has gained the most employment relative to 2020.

At the other end of the spectrum is the travel services industry. Employment held up relatively well in this industry for the first year of the pandemic. Since March, employment has plummeted, and is down by 60% relative to the same month in 2019. Travel services is also the only tourism industry in which employment is lower than it was in 2020.


Provincial Tourism Employment

Provincially, there was a mix of employment gains and losses within the tourism sector. Tourism employment grew 10.5% in Newfoundland and Labrador, and there were smaller employment gains in New Brunswick, Ontario, and Manitoba. Tourism employment fell in Nova Scotia, Saskatchewan, Quebec, Alberta, and British Columbia. Tourism employment levels were unchanged in Prince Edward Island.

Unsurprisingly, tourism employment was lower in all provinces than in November 2019. More concerningly, four provinces are showing lower employment levels than last year.

Job Vacancies

Job vacancy data is not as timely as employment data. September data was recently released and shows a large spike in vacancies among accommodation and food service businesses (see Figure 9). The job vacancy rate reached 14.4%, a historically unprecedented level. It has never been this high since Statistics Canada began tracking this data every quarter via the job vacancy and wage survey in 2015[2]. The September labour force survey analysis by Tourism HR Canada showed a large decline in employment that was concentrated among 15- to 24-year-olds. The vacancy data that is now available shows that although young people left their jobs in September, employers were still looking to fill those positions.

Figure 6 Source: Statistics Canada. Table 14-10-0372-01  Job vacancies, payroll employees, and job vacancy rate by industry sector, monthly, unadjusted for seasonality

Figure 7 Source: Statistics Canada. Table 14-10-0326-01  Job vacancies, payroll employees, job vacancy rate, and average offered hourly wage by industry sector, quarterly, unadjusted for seasonality

Employment by Sector

As of October, ten sectors of the economy employ more workers than two years ago, while six have lower employment. Overall, seasonally unadjusted employment has increased by 290,200 since November 2019. The largest gains in employment have occurred in professional, scientific and technical services; wholesale and retail trade; and public administration.

In terms of total employment losses and gains, those sectors that have gained employment since November 2019 have added 732,100 jobs. The sectors that have lost employment have 442,000 fewer workers than they did two years ago (see Figure 8).

Figure 8 Source: Statistics Canada. Table 14-10-0036-01  Actual hours worked by industry, monthly, unadjusted for seasonality

Total Unemployed and Unemployment Rate

Unemployment across the entire economy fell for the third month in a row in November. The number of unemployed individuals fell by 86,700 between October and November and is down by 502,000 since August. Since August, the number of employed workers has increased by 137,600. The gap exists because many young people exit the labour force entirely at the end of summer. They return to school, and are not employed but not considered unemployed because they are not actively seeking another job.

Compared to the same month two years ago, there were 36,300 more unemployed workers in November 2021. The seasonally unadjusted unemployment rate fell to 5.6%, the lowest since December 2019. Because the labour force has grown, the number of unemployed workers is still slightly elevated compared to both November and December 2019. However, there are fewer unemployed workers than there were in January and February of 2020. In other words, unemployment levels in Canada look very much like they did pre-pandemic.

Figure 9 Source: Statistics Canada. Table 14-10-0017-01  Labour force characteristics by sex and detailed age group, monthly, unadjusted for seasonality (x 1,000)

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

As mentioned, some of the drop in unemployment since August is due to people leaving the labour force. Between October and November, the number of people not in the labour force grew by 29,600, and the number of people not in the labour force has grown by 474,200 since August (see Figure 10). This increase is a regular seasonal occurrence. However, even taking seasonality into account, the number of people not in the labour force has grown significantly. Since November 2019, it has increased by 267,600.

But this growth has come from those over the age of 65. In all other age categories, fewer people are not actively participating in the labour force (see Figure 11). One exception in November was those aged 35 to 44, but this age group also showed decreases in August and October. November’s data is likely a fluke since the trend since the summer has been fewer people not in the labour force, except for those over the age of 65.

The seasonally adjusted participation rates, which show the percentage of people actively participating in the labour force, support this assertion. While the total participation rate for anyone over 15 has decreased slightly since November 2019, it is the same or higher for people between the ages of 15 and 64 (see Figure 12).

In November, the number of people not in the labour force who wanted to work also fell from 381,900 to 377,800. The number of people in this category is still higher than in November 2019, but it is now in roughly the same range that it was during pre-pandemic times (see Figure 13). The greatest difference between November 2019 and November 2021 is the increase in individuals awaiting recalls and the decline in the number of individuals citing “other” as a reason for not seeking work, even though they wanted to (see Figure 14).

Figure 10 Source: Statistics Canada. Table 14-10-0017-01 Labour force characteristics by sex and detailed age group, monthly, unadjusted for seasonality (x 1,000)

Figure 11 Source: Statistics Canada. Table 14-10-0017-01 Labour force characteristics by sex and detailed age group, monthly, unadjusted for seasonality (x 1,000)

Figure 12 Source: Statistics Canada. Table 14-10-0287-01  Labour force characteristics, monthly, seasonally adjusted and trend-cycle, last 5 months

Figure 13 Source: Statistics Canada. Table 14-10-0127-01  Reason for not looking for work, monthly, unadjusted for seasonality (x 1,000)

Figure 14 Source: Statistics Canada. Table 14-10-0127-01  Reason for not looking for work, monthly, unadjusted for seasonality (x 1,000)

A Tightening Labour Market

Some tourism demand sources—such as international tourism and business travel—remain suppressed. Because of this, some businesses may not require the full complement of staff that they did prior to the pandemic. However, the vacancies data for the summer clearly shows that employment would be higher if tourism business owners could find all the staff they needed.

Demand for tourism goods and services usually drops in the fall, but this year, that is offset by the loosening of restrictions and the return of some international travellers as borders reopen. Because of these two variables, it hard to predict whether vacancies will come down or increase further in October and November.

Regardless, in November, the tourism sector was still employing 300,000 fewer workers than it was in 2019. And over the past few months, Canada’s overall labour market has largely come to look as it did pre-pandemic. Overall employment is now higher than it was two years ago. Unemployment is only slightly elevated, as is the number of people not in the labour force who would like to work but cannot. For most age groups, the number of people not in the labour force has fallen.

This may be good news for those who lost work due to the pandemic. Most of them have found new jobs. It is not good news for any sectors of the economy where demand for services is growing and employment has not recovered. The slack that existed within the labour market this spring and summer has vanished over the last few months.

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


[1]Average decline in tourism employment in November between 2006 and 2019

[2] Data was not collected in Q2 and Q3 of 2020