More Job Losses, Unprecedented Decline, But Reason for Optimism

Statistics Canada’s latest Labour Force Survey data is from the week of January 9 to 15, 2022. The surge of Omicron over this period led to increased business closures and a loss of 200,000 jobs across the economy (based on seasonally adjusted data; unadjusted data shows a decline of 484,900 jobs from December to January[1]).

Tourism jobs were most impacted, with declines largely driven by Ontario and Quebec. Youth (15 to 24 years old) and women 25 to 54 years old were most impacted by the forced closures—key demographics that make up the tourism workforce.

Though the tourism industry saw unexpected employment gains in November 2021 which held steady as we headed into the holiday season, the repercussions of rising COVID-19 case counts and public health measures driven by the Omicron variant in late December 2021 and early January 2022 were felt quite heavily on employment across the entire economy.

It is typical for seasonally unadjusted employment to drop in the winter months; however, this past month brought unprecedented declines.

Tourism employment decreased in January by 176,000 from the previous month; a 10.1% month-over-month decline. Total employment now sits at 1,567,300, down from 1,743,300 the month before.

It is also common for the seasonally unadjusted employment rate and employment across all industries to decline in January. As mentioned, the unemployment rate for all industries in Canada has also risen this past month—from 5.4% in December to 6.8% in January. For the Canadian economy as a whole, seasonally unadjusted employment declined by 484,900 in January 2022—this decrease marks the largest monthly decline since January 2021.

The employment decreases in both tourism and the broader economy were due to large decreases in part-time employment. Part-time employment in the tourism industry dropped by 122,600 (or 16.5%), while full-time employment declined by 53,400 (or 5.3%).

It is typical to see a drop in tourism employment between the months of December and January (Fig. 1). For example, between December 2016 and January 2017 there was a decline of 9,200; the next year saw a reduction of 22,300 in employment numbers, and a 4,600 drop in employment was recorded between December 2018 and January 2019. Again, increases in tourism employment are highly unusual for this month, but the previous two years have been extreme outliers which have been exacerbated by the economic impact of COVID-19 outbreaks and responsive social policies.

Figure 1

In January 2022, the unemployment rate in the tourism sector was 11.9%—more than double the previous month (December 2021), when the unemployment rate for tourism stood at 5.2%. A year-over-year comparison does provide important context, however, as the present rate of 11.9% is substantially lower than the 18.6% rate reported in January 2021 (Fig. 2).

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

Figure 2

On a provincial basis, tourism unemployment rates ranged from 2.7% in Manitoba to 18.9% in New Brunswick (Fig. 3). The seasonally unadjusted unemployment rates for tourism in each province, with the exception of Newfoundland and Labrador, Manitoba, and Alberta, were above the rates reported for the provincial economy.

Figure 3

When looking at January 2022 employment within the various tourism industry groups, the most significant decreases from the previous month were in the food and beverage services, recreation and entertainment, and the accommodations industries (Fig. 4).

Figure 4

Year-over-year analysis shows that, when compared to the same month in 2021, there has been growth in accommodations and recreation and entertainment along with a slight uptick in transportation employment. Nevertheless, when compared to the 2019 benchmark, each sector has declined between 15% and 32% from January 2019 numbers (Fig. 5).

Figure 5

As we look to the coming months, it is important to recognize that from November to December 2021, Canada’s tourism industry was in recovery mode, with positive gains across key labour market indicators. Public health measures are changing in several provinces, and it is therefore possible that this previous employment momentum will re-emerge as restrictions are eased across the country.

[1] Seasonally adjusted data in a time series has been modified to eliminate the effect of seasonal and calendar influences such as peak seasons of economic activity and monthly holidays.  It allows for comparisons of economic conditions from period to period and sector to sector without variations that may reflect significant seasonal changes that typify industries like tourism. Unadjusted data in a time series is also referred to as a “raw” or “original” time series before seasonal adjustments. For further details, please visit this Statistics Canada webpage.