Unemployment rate has likely already doubled, 2 million workers at immediate risk of layoff in Canada: Analysis

As essential public health measures to contain the virus continue, new Canada Emergency Response Benefit is a positive development
March 26, 2020

OTTAWA—New analysis by the Canadian Centre for Policy Alternatives (CCPA) estimates that the unemployment rate has likely already doubled or more due to COVID-19, with 2 million workers who have been laid off or are at immediate risk of layoff in Canada. Half to three-quarters of them will lose their jobs by the end of March.

“The unemployment rate in March is on track to be the highest in seventy years, and we’re only at the beginning of the economic fallout,” said analysis author David Macdonald, CCPA senior economist. “Wednesday’s announcement of the Canada Emergency Response Benefit (CERB) is a critical step towards supporting workers, and highlights how inadequate and bureaucratic the employment insurance system was in normal times.” 

The new CCPA analysis of best and more probable case scenarios uses February Labour Force Survey data to examine which workers are most at risk of immediate layoff. It identifies workers in: retail; food and hospitality; airlines; and culture, sport and recreation who have front line occupations and are at immediate risk of layoff due to forced business closures. Workers in grocery stores, drug stores and online commerce are excluded. The analysis conservatively assumes that all other Canadian workers remain unaffected in this first round of layoffs and examines the impacts of just those most at risk worker groups.  

Fast facts on the COVID-19 unemployment picture: 

  • Nine per cent of all working men and 13% of all women are at risk of layoff.  A quarter of all those working part time are at risk of layoff.
  • Two in five workers making $14/hour or less and one out of three workers making $14-$16/hour are at risk of immediate job loss. The risk of job loss for those making over $40/ hour is 1%.
  • If only half of the two million workers at greatest risk are actually laid off, the national unemployment rate would spike from 5.9% in February to 10.9% in March, but this is optimistic. A more probable scenario of 75% layoffs would see the unemployment rate rise to 13.9%, the worst it’s been in 70 years. 
  • In the more probable scenario (75% layoffs), Newfoundland and Labrador could see unemployment surpass 20%; Toronto could see 261,000 newly unemployed workers; Montreal could see 192,000; and Vancouver could see 140,000. 
  • Youth unemployment would at least double from 10.4% in February to 25.5% in March, but in the more probable case could reach highs of more than 33%.
  • 27% of the workers at risk of immediate layoff would have been denied Employment Insurance due to inadequate hours, but will likely receive the CERB.
  • 78% of workers at immediate layoff risk in major cities will be better off with a CERB of $2,000 a month than they would have been receiving EI.

A more detailed analysis of these figures will be available Thursday on our blog: www.behindthenumbers.ca. See the table below for provincial and city-by-city information.

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For more information or to arrange interviews, please contact: Alyssa O’Dell at [email protected] or 343-998-7575. The CCPA is an independent, non-profit charitable research institute founded in 1980.

 

Unemployment rates

 

 

Feb 2020

Best case

Realistic case

Newly unemployed – Realistic case

Canada

5.9%

10.9%

13.5%

1,528,050

 

 

 

 

 

Provinces

 

 

 

 

Newfoundland

13.3%

19.0%

21.8%

21,041

Prince Edward Island

10.0%

14.5%

16.7%

5,677

Nova Scotia

8.7%

14.8%

17.8%

45,877

New Brunswick

8.1%

12.8%

15.2%

27,103

Québec

5.0%

10.2%

12.8%

349,906

Ontario

5.5%

10.3%

12.6%

564,174

Manitoba

5.2%

10.2%

12.7%

51,479

Saskatchewan

6.2%

11.2%

13.6%

45,014

Alberta

7.5%

12.3%

14.7%

180,462

British Columbia

5.2%

11.2%

14.2%

237,317

 

 

 

 

 

Cities

 

 

 

 

Quebec

4.5%

9.5%

12.1%

34,583

Montreal

5.2%

10.7%

13.4%

192,167

Ottawa

4.4%

9.2%

11.6%

43,485

Toronto

5.4%

10.1%

12.4%

260,564

Hamilton

4.8%

10.1%

12.8%

35,875

Winnipeg

5.0%

10.4%

13.2%

38,703

Calgary

8.0%

12.9%

15.3%

66,394

Edmonton

7.5%

12.7%

15.3%

65,301

Vancouver

4.7%

10.8%

13.8%

140,444


Source: February 2020 Labour Force Survey Public Use Microdata File and author's calculations

 

 

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