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The Current Unemployment Rate in Canada Increased to 6.5%, but a Swift Post-COVID Wave Rebound is Expected

The current unemployment rate in Canada rose to 6.5% in January of this year, which is 0.5% more than the value in December 2021. This is the first time that the rate of unemployment in Canada has increased since April 2021, when the third wave of the COVID-19 pandemic hit.

With the surge of COVID-19 cases brought about by the Omicron variant, the country had to implement strict public health measures to curb the transmission. These included lockdowns, closures of establishments, and curfews, to name a few.

These COVID-19 restrictions weren’t beneficial for many businesses, forcing them to close their stores. The current unemployment rate in Canada can be attributed to this situation. 

Some provinces were affected more than others. Ontario and Quebec contributed the most to the current unemployment rate in Canada compared to other provinces. Those two provinces were affected early on in the wave of the COVID-19 pandemic brought about by the Omicron variant. As a result, COVID-19 cases greatly increased and, in response, government officials decided to put the provinces under strict lockdown.

Experts in the field of economics were already not optimistic about the situation of unemployment in Canada. However, the 200,000 lost jobs were more than what they expected. The actual value was nearly twice as much as their projections. 

Current Unemployment Rate in Canada: Certain Industries Face More Challenges than Others

It comes as no surprise that accommodation and food services were the industries that experienced the most unemployment in Canada. These industries have remained the most affected throughout all the coronavirus waves. 113,000 jobs in the industry were lost in one month.

Other similar industries did not fare any better. Employment in the information, culture, and recreation industries decreased by 48,000. The retail sector also had 26,000 workers who were left unemployed within the same period.

Both industries remain highly vulnerable to lockdowns and curfews because of the nature of their businesses. They highly depend on the mobility of citizens and relatively loose COVID-19 restrictions so that they can operate at their optimum capacity. 

The Omicron Wave Put Too Much Pressure on Businesses

Drew Bathory, the co-founder of the ELMNT Studio located in Montreal, said that “we really have no choice. We have tried.”

ELMNT Studio is a fitness center that offers spin classes and movement classes. It opened at an untimely period, just a few weeks before COVID-19 was identified and rapidly spread in March 2020. 

Owners tried to ride out each coronavirus wave as it came, making sure that they never permanently closed. They initially planned to close down just for the holidays and then open again soon after. However, they eventually decided to close the studio for good. 

ELMNT Studio could not operate because of the restrictions implemented to curb the number of cases. The constant cycle of lockdown and reopening pushed the owners to close down the business.

It wasn’t just bad news for the owners. Employees also had to lose their jobs with the closure of the business. ELMNT Studio had as many as 40 employees at one point. With the continued presence of the COVID-19 pandemic, it dwindled down to 20 employees and then to zero. The Omicron coronavirus wave was just too much for them to continue operating.

ELMNT studio is just one of the businesses in Canada that had to reduce the number of employees and close down. Many more establishments have had to lay off employees in the past weeks.

However, not all hope is lost for some business owners. Some are looking into the possibility that the layoffs will not be permanent and that they will be able to rehire their employees once again.

Trevor Brodie, operations manager at the Amsterdam BrewHouse located in Toronto, said that they had to lay off some employees before Christmas due to the lockdowns in the province. But, the COVID-19 situation has now changed for the better and the restrictions have been adjusted once more. Their brewery and other similar establishments are allowed to open again, and they will do just that.

He said that “we’re fairly optimistic due to the fact [that] there was a very short shutdown [but] it definitely impacted our staff.” He hopes that there won’t be any more lockdowns in the future so that they can operate at their normal capacity. When this does happen, the brewery can expect many customers to come by the time summer arrives. This will enable them to hire up to 100 employees so that they can “welcome them back with open arms,” said Brodie.  

An employee of the Amsterdam Brewhouse, Nicole Jamieson, shared that the lockdown brought about by the Omicron coronavirus wave wasn’t easy for her and the industry that she holds close to her heart. Despite this, she feels better about what the future holds. When the brewery reopened this month, she was met with her regular customers. She was so happy to see them, especially after going through a difficult lockdown.

However, not all employees may be looking forward to going back to the industry. Just as the intermittent coronavirus waves have led to the closure of some businesses, some employees are also considering leaving the industry behind. This is brought about by the uncertainty that the COVID-19 pandemic places them in.

The Current Unemployment Rate in Canada May Not Last Too Long

Not all industries had to lay off employees. Goods-producing industries, such as utilities, construction, and natural resources, actually showed otherwise. Last month, 23,000 jobs across these industries were added. This comes as a sign that the economy may be recovering. 

Changes in employment in January 2022 compared to December 2021

Royce Mendes, an economist at Desjardins, said that the number of hospitalizations due to COVID-19 seems to have reached its peak throughout all of Canada. This situation encourages government officials to lift some COVID-19 restrictions. At the same time, citizens feel safer leaving their homes, going around the province, and performing different activities. 

“That’s the beginnings of a recipe for another swift post-COVID-wave rebound,” he says.

Other Details of the Labour Force Survey in January 2022

Apart from the current unemployment rate in Canada, other values did not seem too optimistic either last month. These values can be found below.

  • Total hours worked decreased by 2.2%
  • The number of employees working less than half of their usual hours increased by 66.1%
  • Part-time and full-time employment among the youth decreased by 7.1% and 3.5%, respectively
  • Part-time employment among women ages 25 to 54 years old decreased by 4.3%
  • Employment in all services-producing industries decreased by 223,000
  • Employment in the private sector decreased by 1.6%
  • 10% of employees (1 in 10) were absent from work because of illness or disability 

The average hourly wage grew by 2.4% on a year-over-year basis. This is lower than the 2.7% seen in November and December of last year. 

Apart from Ontario and Quebec, employees from other provinces also experienced job losses. These include Newfoundland and Labrador, New Brunswick, and Prince Edward Island. 

The constant mutation of the COVID-19 virus has been a challenge for many countries. Just as the situation seems to be getting better, any progress is held back because of the changes in circumstances. These have been difficult for both businesses and employees to cope with, resulting in an increase in the current unemployment rate in Canada. However, just as what was previously done, the country will recover. The easing of COVID-19 restrictions is welcomed by citizens so that they can have more freedom to participate in different activities. This is beneficial for business owners and employees alike, so that they can go on as usual. 

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