Canada needs to add 650,000 jobs next year to return to the same employment-to-population ratios that existed pre-pandemic, a new CIBC Economics report suggests.
According to the report released Monday, British Columbia was the only province to see employment back to its February 2020 level.
P.E.I. and Saskatchewan had the largest employment gaps compared to pre-pandemic levels, each down about 3.5%.
The report noted there are approximately 250,000 more Canadians out of work compared to the start of the pandemic, accounting for roughly 1.5% of total employment. Ontario represents nearly half the shortfall, though its gap is lower than other provinces in percentage terms.
Quebec has had a decline in employment since February 2020 of just over 1%, while Alberta has experienced about a 1.5% dip.
Taking population growth into account, Canada would need to add 475,000 jobs to get the employment-to-population ratio back to pre-Covid levels, CIBC said. But the pandemic has limited immigration, a major source of prime-aged population growth. Taking different age groups into account, CIBC said employment totals would need to rise by about 400,000 to reach February 2020 levels.
However, the report suggested those levels may not be a suitable goal.
“Remember that, on a national basis, economic growth seemed to be decelerating, to the point that the Bank of Canada was debating an interest rate cut even before Covid-19 made it to these shores,” the report said.
The author calculated each province’s highest six-month average prime-age employment ratio during the prior cycle. Using those targets, rather than February 2020, Alberta and P.E.I.’s employment gaps were larger than 4% each, while B.C. and Newfoundland were closer to 1%.
“For Canada as a whole, we see the population increasing by around 400K in the coming year, which would mean employment gains totalling 650K would be needed to get back to the same employment-to-population ratios that prevailed prior to the pandemic,” the report said.
“Immigration is accelerating once more and should serve to accelerate prime-aged population growth. But such inflows may not be consistent across the country.”
Federal government assistance — for instance, in child-care funding — should help diminish the provincial gaps in labour force participation going forward, the report stated.
Restoring employment has been a key priority for parties in the 2021 federal election.
The Liberal Party of Canada has promised to extend the Canada Recovery Hiring Program — a subsidy to cover part of employees’ wages — to March 31, 2022, as well as provide all federally regulated workers with 10 days of paid sick leave. The Liberals have also proposed job-creation policies targeted at specific industries.
The Conservative Party of Canada has vowed to restore one million jobs lost from the pandemic within a year. The party’s platform includes policies to provide low-interest loans of up to $10,000 to people who want to upgrade their skills, and to pay 50% of new hires’ salaries after wage subsidies expire. The Conservatives also said they would reject mergers that significantly reduce competition and lead to layoffs and higher prices.
The NDP pledged to create a million jobs in a first mandate, largely through investments in clean energy, climate resilience and social infrastructure. The party has also pledged to work with provinces to bring in a permanent safety net of paid sick leave across the country, and to require large employers to spend at least 1% of payroll, annually, on training for their employees.