The Labour Force Survey (LFS), conducted by Statistics Canada, collects standard labour market indicators and is a major source of information on the working-age population in all provinces. Tourism HR Canada reviews the estimates available for tourism industries on both monthly and an annual basis.


Labour Force Survey 2021: Lingering Impacts of COVID-19 on the Tourism Workforce

COVID-19 has had a massive negative impact on Canadian employment. At its peak, Statistics Canada estimated that over 5 million Canadians had either lost their job or had their working hours reduced by more than 50% due to the pandemic.

COVID-19 hit the tourism sector particularly hard. Before the pandemic, over 2 million Canadians worked in the tourism sector, of whom 880,000 had lost employment by April 2020. And unlike other sectors of the economy, tourism has faced ongoing challenges getting people back to work.
Because tourism has significant seasonal peaks, it can be difficult to tell from monthly data whether the COVID-19 pandemic or seasonal demand is driving employment trends. For example, over the summer months, the travel services industry appeared to have suffered the worst employment losses of any tourism industry (up to 50%). But summer is a period of weak demand for the travel services sector. Conversely, it is a high point for the accommodation industry, which appeared to be doing “relatively” well in terms of employment compared to travel services. Come December 2020, this trend had reversed, with employment in travel services having increased for three consecutive months, while the accommodation sector had suffered three consecutive months of employment decreases.

Annual Labour Force Survey data allows us to evaluate the overall impact COVID-19 had on each tourism industry group in 2021, free of any seasonal variations in the monthly data.

Labour Force Survey – Key Insights for 2021

In 2021, the tourism sector continued to be suppressed by COVID-19. Employment levels remain close to those seen across the country and the five tourism-related industry groups in 2020. Even more troublesome, the labour force for the tourism sector continued to decline—which not only makes it difficult for businesses to recruit and retain employees, but also raises concerns for the long-term recovery of the industry.

  • 2021 tourism employment is 19.9% lower than 2019, while overall employment bounced back to the pre-pandemic level in Canada.
  • Tourism’s labour force dropped further in 2021, to 83.1% of the pre-pandemic level; conversely, the overall Canadian labour force grew by 1.2%.
  • Full-time employment in tourism is only 78.4% of the pre-pandemic level and part-time employment is at 82.9% of the pre-pandemic level.

Annual Average Employment by Industry

The negative impact of COVID-19 continues to loom over each of the five tourism industry groups. The accommodation industry was the hardest hit, with employment down 32% from 2019 and a further drop of 5,100 workers from 2020. Travel services lost an even greater percentage of employment, down from 75% of its pre-pandemic level in 2020 to only 68.4% of its pre-pandemic level this past year.

Both the food and beverage services and the recreation and entertainment industries bounced back slightly (around 4% higher than 2020), but are still only 81.5% and 82.2% of their pre-pandemic levels, respectively.

Although employment in the transportation industries as a whole remains equal to 2020, many industries within this group suffered further loss; for example, taxi and limousine services is down 8.5% from 2020, scheduled air transportation is down 6.4%, and rail transportation is down 3.8%. This employment loss was compensated mostly by the employment gain in urban transit systems (up 7,000 from 2020) and school and employee bus transportation (which saw an annual increase of 3,400).

Annual Average Employment by Province

Provincial labour markets faced the impacts of the pandemic to varying degrees, and this was reflected in the 2021 Labour Force Survey data. Employment levels in Quebec and Newfoundland and Labrador dropped further in 2021—by 20,900 (a 5.8% decrease from 2020) and 3,400 (a 15.5% decrease from 2020), respectively. Employment in the rest of Canada had slight gains, but was still 17.3% lower than in 2019, on average. Prince Edward Island had the largest employment uptick (16.7% from 2020), but it was also the hardest-hit province in 2020.

Annual Average Unemployment by Industry

The unemployment data for the tourism sector paints a rather deceptive picture of the state of the labour market challenges, due to the massive loss of members of tourism labour force overall. While this made the unemployment rates for 2021 closer to 2019 levels than to the 2020 level, as noted above, the total labour force remains dramatically reduced across the tourism industry groups.

The unemployment rate for the overall economy was 1.8 percentage points higher in 2021 than in 2019, at 7.5%. For tourism, the unemployment rate was 8.6% in 2021, 3.4 percentage points higher than in 2019. The transportation industry group had the lowest unemployment rate, at 5.4%—only 2.8 percentage points higher than in 2019. Unemployment rates for the other tourism industry groups were around half of what they were in 2020.

Annual Average Unemployment by Province

Similarly, tourism unemployment rates for the provinces also fell between the 2019 and 2020 levels.  Unemployment rates for 2021 are closer to the 2019 level in all provinces but New Brunswick. When comparing tourism with the entire provincial economy, unemployment rates were much closer. The biggest gap (4.4 percentage points higher) was in Prince Edward Island, which was also the highest (13.6%) among the ten provinces. With a tourism unemployment rate of 6.3%, Saskatchewan had not only the lowest rate in the country, but also the best rebounding rate for tourism (only 2 percentage points higher than in 2019). In Newfoundland and Labrador, the tourism unemployment rate was 1.8 percentage points lower than that of the total economy, making its tourism sector the only one with a significantly lower unemployment rate when compared to its provincial economy.

National Monthly Unemployment Rate (Tourism vs. Total Labour Force)

The national tourism unemployment rate decreased dramatically through the first half of the year, then hovered around 5% in the second half. From the unemployment rate point of view, tourism seemed to be doing better than the total economy. It had a quick recovery, then stayed below the unemployment rate of the total economy. Again, however, a huge contributor of this appearance was that the labour force for tourism decreased by nearly 17% from 2019.

Annual Unemployment Rate (Tourism vs. Total Labour Force) 2006 – 2021

Between 2005 and 2008, the tourism unemployment rate closely mirrored that of the Canadian economy. But starting in 2008, those rates diverged. The financial crisis drove up the unemployment rate in all industries, but tourism was less affected than the overall economy. For a decade after the financial crisis, tourism unemployment was consistently about a percentage point lower than the overall unemployment rate. That trend came to a crashing halt in 2020. Overall, the unemployment rate spiked to 9.5% (higher than at the height of the financial crisis), whereas tourism unemployment soared to 16.5%. In most provinces, the tourism unemployment figures are unprecedented.

For 2021, the unemployment rate for the overall economy dropped, while the tourism unemployment rate—even though it was almost halved in 2021—was still well above what it has been in the past. In the three western provinces, tourism unemployment rates were very close to

the overall provincial rates. However, from Manitoba to Nova Scotia, the unemployment rates in tourism were still much higher than the provincial level. Tourism in Newfoundland and Labrador was the only case where the unemployment rate was significantly lower than the overall provincial rate.

Source: The information presented here is drawn from Statistics Canada’s Labour Force Survey. It shows rates of unemployment in Canada’s tourism sector by province and by industry group. The data is seasonally unadjusted to allow comparisons between the tourism sector and the overall economy. As such, monthly and annual numbers for Canada’s entire labour force will differ from the seasonally adjusted numbers that are commonly reported.

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 HR Insider subscribers receive monthly estimates of employment and unemployment for each of tourism’s five industry groups and for each province. To sign up, click here.

You can also access detailed Labour Force Survey data by occupation and region through our Rapid reSearch tool, hosted on emerit.ca. Sign up for an account to gain access to the data.


canada_govThis project is funded by the Government of Canada’s Sectoral Initiatives Program

 

The opinions and interpretations in this publication are those of the author and do not necessarily reflect those of the Government of Canada.