Canada’s jobs numbers are in for March and they are worse than expected. In the month of March the Canadian economy shed more than 1 million jobs in comparison to a consensus forecast of 500,000 job losses.
Job losses far exceed anything we have ever seen since the Labour Force Survey was initiated in 1976.
All provinces and territories reported job losses, but on a relative basis Alberta suffered the greatest as the impact of the Saudi-Russian oil price war in addition to COVID-19 sent Western Canada oil prices to historic lows. Western Canada Select (WCS) fell by 90% in March.
Indeed, the Canadian economy lost more than double the number of jobs than those during the Great Recession. The unemployment shot up by more than two percentage points, to 7.8%, and reached 8.7% in Alberta.
Source: Statistics Canada
We have suggested that Canada’s path to recovery will most likely be more U-shaped and with a longer tail relative to the U.S. because of (1) the Canadian economy slowing down before the onset of COVID-19, (2) Canada’s reliance and exposure to the oil and gas sector, (3) elevated household debt levels and (4) our limited fiscal response to date. The U.S. economy lost approximately 700,000 jobs, or a decline of roughly 0.46%, on a month-over-month basis. Canada’s decline was nearly 11 times greater, at 5.6%.
There is no question that additional fiscal stimulus will be required not only to address the current situation (the enhanced wage subsidy program was definitely a step in the right direction) and to support highly impacted industries, but also to jumpstart the Canadian economic engine when the threat of COVID-19 subsides.
Source: U.S. Bureau of Labor Statistics
For more information on how the coronavirus is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.
