The COVID-19 (coronavirus) pandemic will hit Canadian labour markets hard, and fast—particularly the two million-plus Canadians without permanent work arrangements, says a report by RBC Economics.
The report said 93 per cent of casual employees and 85 per cent of temporary contractors work in the services sector; nearly half of casual and contract workers are in sectors heavily impacted by COVID-19: education, accommodation and food services, wholesale and retail trade, and information, culture and recreation; around 800,000 casual and temporary-contract workers are prime-aged workers; and in April, the number of young people (mostly students) seeking seasonal or temporary-contract jobs will more than double—and their employment opportunities have diminished significantly.
“Heading into 2020, the Canadian labour market was very strong. Unemployment was at four-decade lows after hitting a recent high of 7.3 per cent in early 2016. Even at the end of February, there was very little indication of the negative economic shock to come,” said the report.
“We’ve identified two trends that set up the COVID-19 shock to exert even greater downward pressure on the labour market: the large increase in the employment of casual and temporary contract employees relative to permanent staff, and the large shift out of goods sector employment into services.”
Of Canada’s two million casual/temporary workers (which make up 12 per cent of all employees), 93 per cent of casual employees and 85 per cent of those on temporary contracts are in the services sector, explained the report.
“While the shock to oil, and the likely reduction of demand from abroad, will undoubtedly hurt the goods sector going forward, widespread ‘social distancing’ is shaping up to be a demand shock of previously unseen magnitude for the services sector. Support staff for professional services will likely also see large reductions in demand,” it said.
“Finally, with the timing of this crisis in the final months of the school semester, many summer jobs for students are at risk. Beginning in April, 15 to 24 year olds begin to take up employment in large numbers. Nearly one million Canadians in this age range worked in a seasonal or contract position in 2019. With many firms instituting work from home policies, it is unclear what will happen to co-op and other internship positions. And for those that usually earn their income in bars, restaurants, or in other service positions, the disappearance of these jobs can put their yearly income at risk, making tuition and other expenses during the rest of the year unaffordable.”
