In October, tourism employment decreased by 70,400 jobs, ending five months of tourism employment recovery.
Tourism employment usually decreases in October, but since 2001 the average decrease in employment between September and October has been a mere 0.8%. This year, employment decreased by 4.1%.
There were 375,800 fewer people employed in tourism than there were in February 2020 and 431,600 fewer than in October 2019.
Data is from the week of October 11 to 17. At that time, Quebec’s two biggest cities had been in their second lockdown for over a week; this can be seen in the data, with tourism employment dropping 15.0% (58,500 jobs) in that province. Ontario did not move Toronto, Ottawa, and the Peel region into its modified Stage 2 until October 10. The province lost 10,000 tourism jobs, but employment losses associated with modified Stage 2 may not be fully captured, as this data was collected in the week immediately following the announcement.
Highlights:
- Tourism employment declined by 70,400 in October.
- The majority of this employment loss occurred in Quebec, which shed 58,500 jobs.
- The tourism unemployment rate has increased to 14.5%, while the overall unemployment rate for Canada decreased slightly.
- On a year-over-year basis, seasonally unadjusted employment across all Canadian industries was down 3.1% from October 2019. In comparison, tourism employment was down 20.6% from the same month a year ago.
- Tourism employed 431,600 fewer individual this October than it did in October 2019.
- In addition to lost employment, there were 420,000 jobs in the accommodation and food services and the arts, entertainment and recreation sectors being supported by the Canadian Emergency Wage Subsidy in September.
- The overall economy is adding jobs (72,400 in October). People are finding work. However, tourism is shedding employment and its labour force is declining. This implies that at least some of those losing jobs in the tourism sector are finding work in other industries.
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
In October, employment (unadjusted for seasonality) across the entire Canadian economy increased by 72,400 jobs. At the same time, tourism employment decreased. The sector lost 68,400 full-time jobs and 2,400 part-time jobs, for a total loss of 70,400.
Most of the overall employment decrease occurred in Quebec and Ontario, which lost 58,500 jobs and 10,000 jobs, respectively.
The only tourism industry group to gain employment was the travel services industry, which added 12,200 jobs. All other industry groups shed workers.
Last October, tourism employed 2,091,000 Canadians. This October, the sector employed 1,659,400 million Canadians.
The accommodation industry lost 15.6% of its employment between September and October, losing 14,600 full-time jobs and 8,100 part-time jobs. The food and beverage services industry lost 30,500 full-time jobs while adding a small number of part-time positions. The recreation and entertainment industry lost 29,300 jobs. The transportation industry lost 2,800 jobs total—the result of a drop in full-time employment and a smaller gain in part-time employment.
Because the industry groups that make up tourism are different sizes, looking at the monthly change in employment as a percentage change relative to the previous month provides a more equitable picture of how each industry is doing. It also helps illustrate the size of the employment changes relative to those that occurred in past months.
Employment in all industry groups remains is well below pre-COVID levels. Despite employment gains in October, travel services has lost the most employment since February, down 35.1%. Following October’s employment losses, the accommodation industry has 26.3% fewer people employed than in February. Employment in recreation and entertainment, which had almost recovered during the summer, continued to fall. Employment in that industry dropped 6.9% from September to October.
On a year-over-year basis, seasonally unadjusted employment across all Canadian industries was down 3.1% from October 2019. In comparison, tourism employment was down 20.6% from the same month a year ago. By industry group, year-over-year employment losses in October ranged from -40.0% in travel services to -17.0% in food and beverage services.
Quebec and Ontario, where renewed restrictions on tourism businesses came into effect, were the main drivers of employment losses. Tourism employment decreased by 58,500 in Quebec and 10,000 in Ontario. The remaining provinces saw a mix of gains and losses, with Prince Edward Island, Manitoba, Alberta, and British Columbia all showing employment gains. In terms of a percentage, Newfoundland and Labrador and New Brunswick saw the most significant employment losses after Quebec.
Employment in all provinces remains well short of 2019 levels. In October, on a year-over-year basis, the greatest loss of employment has been seen in Saskatchewan (-29.2%), Quebec (-28.9%), and Newfoundland and Labrador (-23.5%).
Tourism Unemployment Rate
In October 2020, the unemployment rate in the tourism sector was at 14.5%, which is 9.9 percentage points higher than the rate reported in October 2019, and higher than the previous month (September 2020) when the unemployment rate stood at 13.4%.
At 14.5%, tourism’s unemployment rate was above Canada’s seasonally unadjusted unemployment rate of 8.1%. All tourism industry groups, except for travel services, have reported higher unemployment rates than the same month last year.
| Unemployment Rate | |||
| Tourism Industry Group[1] |
October 2019 |
September 2020 |
October 2020 |
| Tourism | 4.6% | 13.4% | 14.5% |
| Accommodations | 7.0% | 18.7% | 20.5% |
| Food & Beverage Services | 4.9% | 12.8% | 13.4% |
| Recreation & Entertainment | 5.0% | 14.6% | 16.4% |
| Transportation | 2.9% | 8.2% | 11.0% |
| Travel Services | N/A | 30.1% | 23.5% |
On a provincial basis, tourism unemployment rates ranged from 7.6% in Saskatchewan to 20.4% in Quebec.
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.
Precarious Employment
In October, tourism employed 432,000 fewer people than it did one year prior. Not only were fewer people employed, but as of September, there were 420,000 jobs in the accommodation and food services and the arts, entertainment and recreation sectors being supported by the Canadian Emergency Wage Subsidy (CEWS).
Since the October labour force survey data has been collected, there have been new restrictions placed on business activity in Manitoba and Ontario, and the potential for additional restrictions remains very high.
Supporting businesses through this period will be incredibly important for the eventual recovery of the tourism sector. Just as important will be retaining the existing workforce. The CEWS is absolutely necessary for the industry, as shown by number of workers being supported by it.
Data from the labour force survey suggests that the sector is starting to lose former workers to other industries.
The total labour force is measured by counting those who are employed and those who are actively seeking work. When the pandemic struck, the size of the labour force shrank as many lost their jobs but did not immediately seek new work. As restrictions were lifted, people returned to existing jobs or started seeking new employment.
One good piece of news in all of this is that the size of the total labour force in October was greater than it was in February. This is good news because it means that, so far, those who are unemployed are still seeking jobs. They are not becoming discouraged and dropping out of the labour force entirely (i.e., not working and not seeking work, either).
In tourism, the story is different. The total labour force grew through the summer but never returned to the size it was in February. Then, it began to shrink September and October. The September decline will have been caused by students returning to school and is not concerning. If they do not look for work while studying, students are not considered unemployed. The tourism labour force always shrinks in September for this reason.
The October reduction is ominous. Employment is continuing to rise in the economy as a whole. People are finding work. However, tourism is shedding employment and our labour force is declining. This implies that those losing jobs in the tourism sector are finding work in other industries.
For individuals, it is important that they find work that is available. We do not want to take away from the fact that an overall increase in employment is good. However, there are negative implications for tourism as a sector. Tourism will not truly start to recover until global travel restrictions are lifted, and the cycle of on/off restrictions on gatherings and social interaction stabilizes. If that occurs in early 2021, next summer will offer tourism businesses their opportunity to begin rebuilding.
If, in the meantime, tourism workers move permanently to other jobs, the industry will be unable to meet the pent-up demand for travel that will occur. For the sector to thrive once the other side of this pandemic is reached, we must not only keep tourism businesses viable, we must do so in a way that allows them to retain employees.
[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.