Only 12 months ago, this region’s economy was at flood tide. Employment was just shy of 800,000 — a record. The number of people unemployed was less than 37,000 — equating to a near-record low of 4.3 per cent of the labour force. Among Canada’s six biggest metro areas, we were the closest to full employment.
Then, on Dec. 30, a municipal health authority in Wuhan, China warned about the mysterious pneumonia that later became known as COVID-19.
The spread of that illness, along with the economic lockdowns and other measures meant to slow its progress, has revealed much about the makeup of the country’s biggest cities — not to mention the peculiar vulnerabilities of each.
Statistics Canada on Friday offered a snapshot that put the capital region’s job market in relatively good light. The unemployment rate of Ottawa-Gatineau had plunged to 7.1 per cent in November from 8.1 per cent in October. Toronto, Calgary and Edmonton were still coping with double-digit unemployment rates last month while the jobless rate in Montreal and Vancouver was above eight per cent. (These are based on a three-month moving average and adjusted for seasonal influences.)
Our jobless rate is lowest among the big six cities in part because we started the COVID roller coaster in the best position. The capital region has also been somewhat protected by its unusual economy. One-quarter of our workforce is in public administration, the vast majority with the federal government. No other city comes close. Combined with high-tech and related business services, and health services, more than half of the capital region’s jobs have been relatively safe throughout the pandemic.
Yet, while our workforce has avoided the extreme employment drops of other cities, we have lagged in the recovery. Consider that during the past year, greater Montreal has actually seen employment return to the pre-pandemic level of November 2019, courtesy of Quebec Premier François Legault’s strategy of keeping the provincial economy more open.
Toronto and Calgary have clawed back within two per cent of their year-ago employment tallies while Edmonton and Vancouver are within seven per cent and 4.5 per cent, respectively. In sharp contrast, the capital region’s employment base in November was 728,200 — down more than 70,000 year over year, or nearly nine per cent.
The reason our jobless rate wasn’t considerably higher was because our labour force, which includes people looking for work, shrank significantly as well. Indeed, Ottawa-Gatineau was the only major urban area to witness a drop in its workforce of more than six per cent year over year. The other cities actually registered growth in their labour force over the same period or, in the case of Vancouver and Edmonton, small declines. A growing labour force is usually a healthy sign because people often resume job searches when they sense the economy is improving.
It’s not clear why the capital region’s labour force has been shrinking so quickly. There are many reasons for leaving the workforce, including early retirement, sabbatical, return to school or pure discouragement with job prospects.
Some clues can be found in how employment levels have shifted by sector over the past year. As might be expected, the hardest-hit part of the capital’s economy has been accommodations and food services, where the number of jobs is still down nearly one-third from November 2019. Since many people employed in this sector are likely making less than they did before the pandemic, opting out of the workforce is an option, especially if they have access to government money.
One surprise has been the weakness of the professional services sector, where one in five jobs simply disappeared over the same period. These are lawyers, accountants, architects, project managers and scientists — many of whom sell expertise to the federal government. Priorities have certainly shifted inside federal departments towards contracts favouring information technology, software development and other skills considered crucial for keeping government running smoothly. Other policy-related projects have been pushed aside for now.
A couple of job sectors that have fared well in Ottawa are manufacturing and business services, both of which are top-heavy with high-tech firms. Emerging software giant Kinaxis has not only been hiring directly, it commissioned a new headquarters campus in west Kanata. Other tech heavyweights, including Nokia and Ericsson, have been winning sufficient new business to keep employment steady. Overall, the region’s core high-tech firms employed about 45,000 last month, down just a couple of thousand from November 2019. Business services have added a net 3,000 jobs.
Agriculture was definitely the outlier with a year over year job gain of 35 per cent. Of course, that puts the sector at just 3,100 jobs in total. The boost? It was likely stimulated by extra marijuana production.
The story of the past 12 months in five charts:
How Ottawa-Gatineau compared with Canada’s other big metro areas: