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COVID-19 in Canada: An update on social and economic impacts, Fall 2021

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Released: 2021-12-22

While Canadians have remained resilient through various waves of the COVID-19 pandemic, the direct and unforeseen impacts of the pandemic continue to affect households and businesses across the country. Many Canadians continue to report elevated levels of stress and greater challenges related to mental health, particularly in sociodemographic groups that were disproportionally impacted by public health measures.

The pace of the Canadian economic recovery slowed during the first half of 2021 as supply chain disruptions and public health measures weighed on activity. Output contracted in the second quarter before rebounding in the third quarter. Employment recovered to pre-pandemic levels in September 2021, as third-wave restrictions eased. At the same time, rising consumer inflation outpaced wage growth, while higher input costs and labour shortages continued to cloud the business outlook.

A new presentation, COVID-19 in Canada: Year-end Update on Social and Economic Impacts, provides an integrated summary of recent developments as the pandemic continues to evolve. It highlights the ongoing impact of the pandemic on the social and economic lives of Canadians. The presentation updates and extends the analysis presented in COVID-19 in Canada: A One-year Update on Social and Economic Impacts, released in March 2021. It also examines possible longer-term changes as a result of the pandemic.

Stress levels remained elevated for many Canadians into the spring of 2021, with one-quarter of Canadians experiencing high levels of stress most days, and nearly one-half of Canadians reporting that their stress levels were somewhat worse or much worse than prior to the pandemic. Rates of stress were highest among women, Canadians aged 35 to 44, members of the LGBTQ2+ community and those living with young children. One-quarter of Canadians aged 18 and older screened positive for symptoms of depression, anxiety or posttraumatic stress disorder.

The ongoing pandemic has resulted in excess deaths—that is, more deaths occurring than would be expected in the absence of the pandemic. From March 2020 to May 2021, there were over 5% more deaths than would be expected during this period of time. Early in the pandemic, excess deaths largely occurred among seniors and were mostly attributable to COVID-19. More recently, excess mortality was rising among those younger than 65, partly because of unintended poisonings and overdoses.

From April 2020 to March 2021, opioid toxicity deaths were up nearly 90% from pre-pandemic levels seen from April 2019 to March 2020. Approximately 20 opioid toxicity deaths occurred per day from January to March 2021, an increase of nearly two-thirds from the same period the year before. Most opioid toxicity deaths occurred in British Columbia, Alberta and Ontario, with the majority among socially and economically disadvantaged men aged 20 to 49.

Canada has experienced demographic changes during the pandemic that will have implications for employment and labour force growth. Population growth in 2020 fell to levels not seen in 75 years, largely because of a decline in immigration. In 2020, Canadian immigration reached just over one-half of target levels as Canada experienced the largest net loss of non-permanent residents since 1972. This loss largely reflected declines in student and work permit holders. As of the second quarter of 2021, immigration had been recovering to pre-pandemic levels seen in 2019, as international travel increased and restrictions eased.

Vaccination rates improved in recent months as provincial jurisdictions opted for vaccine passports as a means of easing restrictions. As of December 4, Newfoundland and Labrador had the highest proportion of its total population fully vaccinated (85%), while Saskatchewan, the Northwest Territories and Nunavut had rates at or below 70%.

Overall economic activity in Canada remained below pre-pandemic levels as recovery slowed during the first half of 2021. Real gross domestic product contracted in the second quarter, reflecting lower export volumes and a pullback in home resale activity. Spurred by strong demand for out-of-the-home purchases and higher incomes, household spending fueled output growth in the third quarter, along with exports, which partially rebounded.

Canadian economy-wide output strengthened in June as third-wave restrictions eased, led by sharp gains in accommodation and food services and retail trade. During the summer months, sizable gains in accommodation and food services contributed substantially to output growth as consumers continued to pivot to out-of-the-home spending. Output edged up slightly in September as gains in services and energy extraction offset declines in manufacturing and construction.

As the Canadian economy-wide output continued to recover, employment strengthened in the wake of third-wave restrictions being lifted. All of the cumulative gains in headline employment from May 2021 to August 2021 were in service industries, over one-half of which reflected higher employment in accommodation and food services. Over one-half of net employment gains during this period were among young workers, as employment among 15- to 24-year-olds rebounded to pre-pandemic levels by August 2021.

Total Canadian employment recovered to pre-pandemic levels in September 2021 and as of November, was 1.0% above levels reported in February 2020. However, substantial differences persisted across sectors, with cumulative losses in accommodation and food services totalling over 200,000 workers, while employment in professional, scientific and technical services has risen by 190,000 workers since the start of the pandemic.

While overall employment has recovered, long-term unemployment remained at elevated levels. As of November, 318,000 Canadians were experiencing long-term unemployment, over three-quarters more than before the pandemic. Over half of the net increase in long-term unemployment reflects higher unemployment among core-aged workers, led by increases among core-age men.

Along with long-term unemployment, job vacancies remained elevated into the summer months, highlighting potential mismatches between labour demand and supply. Job vacancies were at record levels in the second quarter and continued to rise from June to September. Vacancies in accommodation and food services were at more than twice the levels reported in 2019. As of the fourth quarter of 2021, over 3 in 10 businesses expected labour shortages to be an obstacle in the near term.

Rising input costs further clouded Canada's business outlook. In the fourth quarter, rising costs related to labour, energy, capital or raw materials were identified as a near-term obstacle by over two-fifths of businesses, as disruptions in supply chains continue to affect different sectors of the economy. Consumer inflation has accelerated at the fastest pace in nearly two decades, driven by upward pressure from gasoline, shelter costs and consumer durables. In recent months, consumer inflation has outpaced annual wage growth, with average hourly wages—adjusted for changes in the composition of the workforce during the pandemic—rising at a slower pace than the headline Consumer Price Index. Meanwhile, sustained increases in new home prices, reflecting strong demand and rising input costs, put additional pressures on affordability.

Products

The product "COVID-19 in Canada: Year-end Update on Social and Economic Impacts" is now available as part of A Presentation Series from Statistics Canada About the Economy, Environment and Society (Catalogue number11-631-X).

Contact information

For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca).

To enquire about the concepts, methods or data quality of this release, contact Guy Gellatly (statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca), Strategic Analysis, Publications and Training Division.

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