Canada

Job Losses Climb In Toronto and Vancouver, While Unemployment Rate Hits Record

Canadian employment numbers climbed, but not all regions were so lucky. The Statistics Canada (Stat Can)  Labour Force Survey (LFS) shows the number of people employed made the first post-pandemic increase in May. Despite the increase in jobs, the rate of unemployment climbed even higher as more people began searching for work. This trend was amplified in major real estate markets like Toronto and Vancouver.

Quebec Was Responsible For 80% of Jobs Last Month

The headline (and market moving number) showed the number of jobs created in Canada. Employment increased by 290,000 jobs in May, compared to the month before. This is a recovery of about 10.6% of job losses pre-pandemic. Diving a little further into these numbers, we see this is mostly a Quebec story.

Quebec accounted for the vast majority of all jobs created in the monthly period. The LFS estimates 231,000 of the job increases in May were in Quebec, about 80% of the total across Canada. Major returns were in construction (58,000), manufacturing (56,000), and wholesale and retail trade (54,000).  Even with this job increase, the total unemployment rate continued to climb as more people searched for work.

Canadian Employment (Labour Force Survey)

The seasonally adjusted number of people employed in Canada, according to the labour force survey.

Source: Stat Can, Better Dwelling.

Unemployment Reaches Record High

Canada’s unemployment rate reached the highest level that can be readily compared. The rate of unemployment reached 13.7% in May, up from 13.0% a month before. The data set only goes back to 1976, but this would be the highest rate in a few generations. Prior to the pandemic, the unemployment rate was just 5.6% – so it has been a very fast climb. Breaking down major real estate markets, we see the trend of higher unemployment rates is still an issue as well.

Toronto Unemployment Climbs To 11.2%

Toronto is seeing unemployment rise, and participation fall – not ideal individually, but it’s bad news together. The rate of unemployment reached 11.2% in May, up from 7.9% just a month before. The participation rate, the percentage of people of working age that are participating in the labour force, fell to 61.4% – down from 63.3%.

Canada’s Biggest Real Estate Markets See Unemployment Rates Rise

The unemployment rate in selected census metropolitan areas, using a three-month moving average, seasonally adjusted.

Source: Stat Can, Better Dwelling.

What does this translate into using less abstract numbers? Well, the number of unemployed people in Toronto increased by 109,300 in May, when compared to April. The total number of jobs lost were 209,200 over that period, but half of those people have theoretically exited the workforce. Any way you look at it, almost twice the number of people aren’t contributing to the labour force and likely adjusted their spending as well.

Vancouver’s Unemployment Rate Reaches 10.7%

Vancouver’s unemployment and participation is following Toronto’s trend, but isn’t quite as bad yet. The city’s rate of unemployment climbed to 10.7% in May, up from 7.5% the month before. The participation rate fell to 61.1% from 63.2% over the same period. This works out to 88,300 employed in Vancouver, but 45,800 people exited the workforce. Not the greatest, but better than Toronto.

Montreal’s Unemployment Rate Soars To 14%

Montreal’s unemployment rate climbed higher than the national average. The rate reached 14% in May, up from 10.5% just a month before. The participation rate also dropped to 63.7% in May, down from 64.5%. This works out to 102,100 fewer people working, but with the big exit from the labour force – only 24,500 are added to unemployment.

Overall takeaway? The bottom of the unemployment trend may be in sight. That isn’t necessarily a good or bad thing, despite the way the market read the headline. There’s regional economic damage that will take time to rebuild after the pandemic. With the participation rate dropping, this makes a bounce for regional economic activity even more difficult.

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10 Comments

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  • TW 1 month ago

    hundreds of thousands of unemployed people can’t an impact on home prices. They government will just pay the mortgages, so as investment geniuses we should just keep buying. haha

  • Bill Ferguson 1 month ago

    This article has been posted to the “Metro Vancouver Housing Collapse” Facebook group; feel free to join and share in the information/discussions along with 9,188 others since 11/11/17.

  • Matthew Chappatta 1 month ago

    Canadian unemployment rate goes down, but people are confident about real estate and oil is one of the funniest narratives I’ve seen in a long time.

    How much junk debt did the taxpayer have to pick up in this process?

  • zalzon 1 month ago

    With millions unemployed and millions more under-employed, immigration should be halted indefinitely.

    I’ve watched friends replaced by lower paid newcomers on jobs by employers through the years even as the very same employers claimed there was a “shortage of labor / skills”. It’s been used as a means of wage suppression and also a means of discrimination against older workers who get shown the door and replaced. Also as means of.eage suppression benefitting a select few.

    The only beneficiary of this ends up being what I call “the immigration industry”. Immigration lawyers, real estate builders and flippers, banks, bureaucratic admin staff sitting in govt, colleges, companies looking to underpay workers.. etc.

    It will be interesting to see what rationale the immigration industry provides now for continuing immigration with mass unemployment and even greater under-employment.

    The claim that immigrants are needed as working mules to pay for those retiring or to buy over-priced real estate sounds like some kind of Amway pyramid scheme.

  • Fight Back 1 month ago

    Someone please organise YOUNG LIVES MATTER movement. This government is propping up housing cost, which is a massive transfer of wealth from young to the boomers. They create fake demand by increasing immigration and flood the market with lose credit.

    We need to fight for our generation’s dignity and right to housing. Just 5 years ago housing in Toronto was half what it is now. Tax person or corporation with more than 2 residential property heavily.
    Young Canadians can’t breath becuase the boots of housing are on our necks.

    • Joseph 1 month ago

      Simple solution; get the young to not vote for Trudeau in the upcoming election. The timeline of your 5 years ago perfectly matches when Trudeau came into power.

      No need to over react. It’s not warranted.

      Next time, simply vote for the politicians who’ll take your concern seriously.

    • Bob123 1 month ago

      This is a good comment so far. Bull sh… with market dynamics, logic. I am a new Canadian. I have saved some money. But the guy who borrowed even 5% for down payment has beaten me. Well. I am planning to move all money back offshore and also move my family back and work here as far and earn as much as possible and finally go back myself when I feel enough!

  • Balky Bartokamous 1 month ago

    Considering the shutdown and how the majority are still shut down those unemployment numbers are way lower than I expected. The stage two opening in Ontario is going to cut that number in half again.

    • M.Bury 1 month ago

      It appears that way because of this, “but half of those people have theoretically exited the workforce.”

      Someone who gives up looking for a job isn’t counted until they start actively looking again, even though they are, by all other measures, unemployed.

  • Devon 1 month ago

    How does this forecasted price decline affect the Suburbs like Markham, Richmond Hill and Vaughan? Would these areas also be subject to a 10% price decrease or is there an exception…

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