Economic impacts and recovery related to the pandemic

Release date: October 20, 2020

Key messages:

Unprecedented declines in output

Real gross domestic product

Description - Real gross domestic product
Real gross domestic product
  Real gross domestic product
2007 0.6
1.0
0.4
0.1
2008 0.1
0.4
0.8
-1.2
2009 -2.3
-1.1
0.4
1.2
2010 1.2
0.5
0.7
1.1
2011 0.8
0.2
1.4
0.8
2012 0.1
0.3
0.1
0.2
2013 0.9
0.6
0.8
1.1
2014 0.2
0.9
1.0
0.7
2015 -0.5
-0.3
0.4
0.1
2016 0.5
-0.5
1.0
0.6
2017 1.2
1.2
0.4
0.4
2018 0.5
0.4
0.6
0.2
2019 0.3
0.8
0.3
0.1
2020 -2.1
-11.5

As a purposeful, policy-based response to a health crisis, the COVID-19 restrictions brought about severe contractions in most industrial sectors, including in many service-based industries that typically support the economy during conventional downturns.

The road to recovery will involve major adaptations for businesses and households, which pose challenges for an equitable and resilient recovery.

Severe declines in most types of economic activity

During Q2, household spending fell by a record 13% as families faced heightened levels of job and income uncertainty.

Employment earnings fell by almost 9% in the second quarter. At the same time, household disposable income rose by almost 11%, because of the transfers and income supports provided by governments. Higher disposable income, coupled with lower spending, pushed the household savings rate to just over 28%, up from about 8% in the first quarter.

Many different aspects of the economy, from trade to investment to consumer spending, will need to rebound if the recovery is to be robust.

Strong retail numbers in May and June and housing numbers in July indicate consumers are opening their pocket books, but questions about the long term impact of the pandemic on mid and lower income households remain. The outlook on business investment remains weak and the outlook on trade is mixed, depending largely on developments in the U.S.

Historic declines in household spending, business investment, and international trade as the economy contracted by 11.5% in the second quarter

Description - Historic declines in household spending, business investment, and international trade as the economy contracted by 11.5% in the second quarter - Real GDP and selected components
Historic declines in household spending, business investment, and international trade as the economy contracted by 11.5% in the second quarter - Real GDP and selected components
  Q2 2020 Q1 2020 Q4 2019 Q3 2019
Real gross domestic product at market prices -11.5 -2.1 0.1 0.3
Household spending  -13.1 -3.2 0.4 0.5
Business investement -16.2 -0.6 -0.7 1.7
Exports -18.4 -2.2 -1.1 -0.1
Imports  -22.6 -2.6 -0.8 0

Output is recovering as businesses reopen – but stark differences across sectors

Many consumer-facing services face major logistical challenges and adaptation costs, particularly those directly involved in tourism and hospitality.

Output in accommodation and food services in June was at 55% of its pre-pandemic level.

But, the recovery, especially in services, is very uneven, with many professional services rebounding quickly while other services struggle to recover.

Economic output continues to rebound as more businesses reopen

Description - Economic output continues to rebound as more businesses reopen
Economic output continues to rebound as more businesses reopen
  February  March April  May  June
Total  100 93 82 86 91
Goods industries  100 94 79 85 92
Service industries 100 92 83 86 91

Real gross domestic product, expressed as a percentage of pre-COVID levels, selected service industries industries

Description - Real gross domestic product, expressed as a percentage of pre-COVID levels, selected service industries industries
Real gross domestic product, expressed as a percentage of pre-COVID levels, selected service industries industries
  Activity during  COVID-19 economic shutdown (April 2020) Activity during current reference month (June 2020)
Service industries 83 91
Finance and insurance 99 101
Professional, scientific and technical services 87 91
Retail trade  71 101
Transportation and warehousing 68 74
Accommodation and food services 34 55

Historic declines in labour market activity

Employment losses totaled 3 million from February to April, almost 2 million of which were in full-time work.

Employment rose by 1.9 million from April to August. Total employment in August was 5.3% below its pre-pandemic level.

Employment, by type of work

Description - Employment, by type of work
Employment, by type of work
  February March April May June July  August
Total  100.0 94.7 84.3 85.9 90.8 93.0 94.3
Full-time 100.0 97.0 87.5 88.9 92.1 92.5 93.9
Part-time 100.0 85.0 70.4 72.4 85.4 95.0 96.1

Labour market indicators:
Unemployment rate:

Employment rate:

Assessing the recovery to date: From February to April, 5.5 million Canadian workers were affected by the COVID-19 economic shutdown. By August, the number of impacted workers had fallen to 1.8 million.

Employment is recovering, but steep losses remain in certain highly impacted sectors

Employment in several heavily impacted industries (e.g., construction, manufacturing) has rebounded to more than 90% of pre-COVID levels as businesses reopen. By contrast, overall employment in accommodation and food services remains over 20% below levels in February.

However, payroll employment (a stricter measure of employment based on the number of workers receiving pay or benefits) yields a different perspective on the financial challenges facing many workers, especially those in lower earning occupations.

Net employment losses, February to August, 2020

Description - Net employment losses, February to August, 2020 (Thousands of persons)

Net employment losses, February to August, 2020 (Thousands of persons)

Net employment losses, February to August, 2020
  Thousands of persons
Agriculture -28
Forestry, fishing, mining, quarrying, oil and gas extraction -13
Utilities -2
Construction -121
Manufacturing -83
Wholesale and retail trade -124
Transportation and warehousing -106
Finance, insurance, real estate, rental and leasing -23
Professional, scientific and technical services -19
Business, building and other support services -62
Educational services -33
Health care and social assistance -53
Information, culture and recreation -101
Accommodation and food services -260
Other services  -49
Public administration -24

Severe declines in payroll employment among hourly paid workers

Hourly paid workers have been far more severely impacted

Description - Hourly paid workers have been far more severely impacted
Hourly paid workers have been far more severely impacted
February March April May June July
hourly paid employees 100.0 92.5 76.4 74.5 81.1 86.7
salaried employees 100.0 96.9 94.2 92.2 92.5 94.5
Source: Statistics Canada table, 14-10-0222.

Economic impacts - Unequal impacts on Canadian workers

Challenges for robust, inclusive growth - Unequal impacts on Canadian households

Unequal impacts - Financial vulnerabilities among working families prior to COVID-19

Without government transfers, financially vulnerable families would have needed, on average, $3,500 over 2 months to stay above low income.

1 in 3 Canadians did not have enough savings to handle a 3-month work stoppage.

Financial vulnerability, by age and family type

Description - Financial vulnerability, by age and family type
Data table for Chart 1
Table summary
This table displays the results of Data table for Chart 1 Percent (appearing as column headers).
Percent
Age  
65 and over 10.4
35 to 64 23.4
Under 35 37.3
Family composition  
Single fathers 28.9
Single mothers 56.3
Non-elderly married with children 27.5
Non-elderly married without children 17.9
Non-elderly unmarried women 35.5
Non-elderly unmarried men 37.4
All 26.4
Source: Statistics Canada, Survey of Financial Security, 2016.

Unequal impacts - Visible minority groups face much higher risks from work stoppages

Poverty rates in 2015 among working families, by visible minority group of major income earner

Description - Poverty rates in 2015 among working families, by ethnicity of major income earner
Poverty rates in 2015 among working families, by ethnicity of major income earner
  Percent
White 5.3
Filipino 7.9
Other visible minorities 9.4
South Asian 10.8
Latin American 10.8
Southeast Asian 10.8
Black 11.3
Japanese 12.3
Chinese 13.7
Arab 14.3
West Asian 18.8
Korean 23.2

Recent immigrants were more likely than Canadian-born workers to move out of employment in March and April, mainly because of their shorter job tenure and over-representation in lower-wage jobs

Percentage of workers employed in accommodation and food services and arts, entertainment and recreation, 2016

Description - Percentage of workers employed in accommodation and food services and arts, entertainment and recreation, 2016
Percentage of workers employed in accommodation and food services and arts, entertainment and recreation, 2016
Percent
South Asian 9.7
Chinese 12.5
Black 9.2
Filipino 15.5
Latin American 9.6
Arab 9.2
Southeast Asian 15.3
West Asian 10.8
Korean 20.6
Japanese 15.8
Other visible minorities 10.8
Aboriginal peoples 10.4
White 8.0
Overall 8.8
Note: People not designated as a visible minority are identified with the colour red.
Source: Statistics Canada, Census of Population of 2016.

Unequal impacts - Low-wage workers have been affected to a far greater extent than during the 2008-2009 recession

Average monthly layoff rates of employees, by wage decile, 2007, 2009 and 2020*

Description - Average monthly layoff rates of employees, by wage decile, 2007, 2009 and 2020*
Average monthly layoff rates of employees, by wage decile, 2007, 2009 and 2020*
  2007 2009 2020
Bottom decile 1.6 2.0 12.9
2nd 1.5 1.7 11.3
3rd 1.4 1.8 9.0
4th 1.2 1.6 7.1
5th 1.1 1.5 5.8
6th 0.9 1.5 4.5
7th 0.8 1.2 4.1
8th 0.8 1.2 3.5
9th 0.8 1.2 2.9
Top decile 0.6 0.7 1.9
Source: Statistics Canada, Labour Force Survey.

Percentage change, from 2019 to 2020, in the number of employees working at least half their usual hours, by 2019 wage decile

Description - Percentage change, from 2019 to 2020, in the number of employees working at least half their usual hours, by 2019 wage decile
Percentage change, from 2019 to 2020, in the number of employees working at least half their usual hours, by 2019 wage decile
April July
Bottom decile -65.1 -39.4
2 -52.7 -20.1
3 -43.4 -11.1
4 -24.1 -0.6
5 -34.3 -12.6
6 -25.8 -9.9
7 -16.4 -3.4
8 -9.7 2.7
9 -0.5 8.0
Top decile 13.7 16.0
Source: Statistics Canada, Labour Force Survey.

Unequal impacts - Youth, less educated workers, women, recent immigrants, and temporary employees have been hit harder

Among temporary employees aged 25-54, employment at significant hours was 20% lower in August 2020 than in August 2019

Among permanent employees aged 25-54, the corresponding gap was 3%

Employees holding jobs that can be done from home have generally fared better

Percentage change, in the proportion of population employed and working at least half of their usual hours

Individuals aged 15 to 24 versus others

Description - Individuals aged 15 to 24 versus others
Individuals aged 15 to 24 versus others
  15 to 24 25 to 44 All
February 101.8 100.8 101
March 67.3 82.3 80
April 51.7 72.8 70
May 57.3 77.4 75
June 75.3 85.2 83
July 83.2 91.3 89
August 85.7 93.5 91
Source: Statistics Canada, special tabulations, Labour Force Survey.

Women versus men

Description - Women versus men
Women versus men
  men women
February 100.9 100.6
March 84.9 74.8
April 72.8 67.5
May 77.5 71.2
June 86.0 80.4
July 90.4 87.9
August 92.4 89.4
Source: Statistics Canada, special tabulations, Labour Force Survey.

Individuals aged 25 to 54, by education

Description - Individuals aged 25 to 54, by education
Individuals aged 25 to 54, by education
  Less than high school High school BA+
February 101.6 102.2 100.1
March 76.6 81.7 84.4
April 58.4 65.0 82.8
May 67.7 70.7 85.4
June 82.6 81.5 89.1
July 91.3 86.3 94.5
August 95.6 88.6 95.7
Source: Statistics Canada, special tabulations, Labour Force Survey.

Individuals aged 15 and over, by immigration status

Description - Individuals aged 15 and over, by immigration status
Individuals aged 15 and over, by immigration status
  Recent immigrants Others
February 101.5 100.7
March 84.1 79.9
April 66.0 70.7
May 70.7 74.9
June 82.1 83.5
July 88.9 89.4
August 91.1 91.3
Source: Statistics Canada, special tabulations, Labour Force Survey.

Unequal impacts - Women and youth

Employment losses among youth were severe during the containment phase (totaling over 870,000). Since April, youth employment has rebounded by 483,000.

Employment, expressed as a percentage of pre-COVID levels , by age group and sex

Description - Employment, expressed as a percentage of pre-COVID levels , by age group and sex
Employment, expressed as a percentage of pre-COVID levels , by age group and sex
  Indexed employment level during  COVID-19 economic shutdown (April 2020) Indexed employment level during  current reference month (August 2020)
Youth: male 70 85
Youth: female 62 85
Core-age: male 88 97
Core-age: female 87 96
Older: male 87 95
Older: female 86 94
Notes: Youth: 15 to 24 year-olds; Core-age: 25 to 54 year-olds; Older: 55 year- olds and over.
Source: Statistics Canada, table 14-10-0287-01.

Employment, expressed as a percentage of pre-COVID-19 levels, by type of work

Description - Employment, expressed as a percentage of pre-COVID-19 levels, by type of work
Employment, expressed as a percentage of pre-COVID-19 levels, by type of work
  Indexed employment level during  COVID-19 economic shutdown (April 2020) Indexed employment level during  current reference month (August 2020)
Youth: Full-time 78 77
Youth: Part-time 53 93
Core-age: Full-time 88 95
Core-age: Part-time 79 102
Older: Full-time 88 95
Older: Part-time 81 92
Notes: Youth: 15 to 24 year olds; Core-age: 25 to 54 year olds; Older: 55 year olds and over.
Source: Statistics Canada, table 14-10-0287-01.

Unequal impacts - A weaker recovery among young Canadians

Youth employment was much slower to recover, particularly in terms of full-time work, especially among women. The youth unemployment rate in August was 23.1%, compared to 10.3% in February.

Unemployment rate, 15 to 24 year-olds, February to August, 2020

Description - Unemployment rate, 15 to 24 year-olds, February to August, 2020
Unemployment rate, 15 to 24 year-olds, February to August, 2020
15 to 24 year-olds
February 10.3
March 16.8
April 27.2
May 29.4
June 27.5
July 24.2
August 23.1
Source: Statistics Canada, table 14-10-0287-01.

The partial recovery in youth employment since April, has all been in part-time work. Full-time work among young Canadians is down 23% from pre-COVID levels. Among young women, it's down almost 30%.

Full-time employment, 15 to 24 year-olds, February to August, 2020

Description - Full-time employment, 15 to 24 year-olds, February to August, 2020
Full-time employment, 15 to 24 year-olds, February to August, 2020
February March April May June July August
Total 100.0 94.6 77.8 76.5 80.7 74.6 76.7
Young men 100.0 95.3 77.8 78.0 82.8 78.8 80.9
Young women 100.0 93.6 77.8 74.5 77.7 68.7 70.9
Source: Statistics Canada, table 14-10-0287-01.

Unequal impacts - Larger impacts on women and youth

"Pandemic threatens decades of women's labour force gains"
– RBC Economics, July 16

About 50% of young employed women work in either retail or accommodation and food, compared to 38% of young men.

Decline in labour force participation rate, February to August:

Men: -0.5 percentage points
Women: -1.4 percentage points

Description - Distribution of employment across industries
Distribution of employment across industries
  All persons Men Women Young men Young women
Agriculture 2.4 3.3 1.5 3.3 1.6
Mining, quarrying, and oil and gas extraction 1.5 2.3 0.6 1.2 0.3
Utilities 0.7 1.1 0.4 0.5 0.2
Construction 7.5 12.6 1.9 11.2 1.2
Manufacturing 8.7 12.1 5.1 8.0 3.0
Wholesale 3.6 4.7 2.5 2.9 1.3
Retail 11.6 10.3 12.9 21.7 26.3
Transportation and warehousing 4.8 6.9 2.5 3.3 1.1
Information and cultural 2.3 2.6 2.0 2.0 1.8
Finance and insurance 4.3 3.4 5.3 1.8 2.4
Real estate, rental and leasing 1.8 1.9 1.7 1.1 0.8
Professional, scientific and technical 7.3 7.8 6.8 3.7 3.8
Management of companies 0.2 0.1 0.2 0.1 0.1
Administrative and support services 4.4 4.9 3.9 6.2 3.0
Education 7.4 4.4 10.6 3.1 5.9
Health care and social services 11.7 4.0 20.1 2.1 10.8
Arts, entertainment and recreation 2.1 2.0 2.1 4.1 4.5
Accommodation and food 7.0 5.6 8.6 16.6 24.6
Other services 4.5 3.9 5.1 3.6 4.1
Public administration 6.2 6.2 6.2 3.7 3.3
Source: 2016 Census of Population.

Unequal impacts - Earning losses over time

Long-term effects of COVID-19 will depend critically on the degree to which layoffs become permanent job losses

In the 3 previous downturns, 45% of laid-off workers ended up losing their job.

Of those who lost their job, one in five had substantial (25% or more) earnings declines 5 years after job loss, when EI benefits no longer apply.

Description - Selected statistics - current and previous labour market downturns
Selected statistics - current and previous labour market downturns
Labour market downturn Average monthly layoff rates
1981 to 1982 1990 to 1992 2008 to 2009 February-March and March-April 2020
  percent
Overall 3.5 3.4 2.5 12.4
Men 3.9 4.1 3.3 12.2
Women 2.9 2.5 1.8 12.6
Educational attainment
Below Bachelor's degree 3.8 3.8 3.0 15.1
Bachelor's degree or higher 1.2 0.8 1.1 7.2
Age group
15 to 24 5.2 4.8 4.1 25.1
25 to 44 2.9 3.1 2.1 10.7
45 to 64 2.8 2.9 2.3 9.9
Permanently laid-off workers as a percentage of all laid-off workers 46.2 46.4 44.6
…not applicable
Notes: Paid workers aged 15 to 64. Montly layoff rates include temporary layoffs and permanent layoffs and are computed for the first two pairs of months of each labour market downturn.
Source: Statistics Canada, Labour Force Survey and Longitudinal Worker File.

Percentage of permanently laid-off workers whose real earnings 5 years after job loss are at least 25% lower than in the year prior to job loss, 1979 to 2011

Description - Percentage of permanently laid-off workers whose real earnings 5 years after job loss are at least 25% lower than in the year prior to job loss, 1979 to 2011
Percentage of permanently laid-off workers whose real earnings 5 years after job loss are at least 25% lower than in the year prior to job loss, 1979 to 2011
Men Women
1979 41.7 37.4
1980 41.4 37.3
1981 38.8 36.7
1982 36.6 34.4
1983 27.3 31.0
1984 22.3 28.7
1985 23.3 28.2
1986 29.3 31.7
1987 33.4 31.0
1988 36.1 32.8
1989 37.4 35.6
1990 36.6 36.1
1991 33.6 36.1
1992 26.4 32.2
1993 22.3 29.6
1994 20.4 27.2
1995 19.8 24.8
1996 21.3 24.0
1997 20.9 23.7
1998 22.3 24.9
1999 22.3 27.0
2000 22.3 25.8
2001 23.2 26.1
2002 22.1 26.8
2003 20.9 25.8
2004 25.2 26.7
2005 23.8 27.0
2006 23.1 26.5
2007 22.4 26.7
2008 22.2 27.6
2009 22.7 26.8
2010 20.7 26.6
2011 22.7 26.4
Note: Laid-off workers aged 25 to 44 with real annual earnings of at least $10,000 (2016 dollars) in the year prior to job loss and with positive earnings 5 years after job loss.
Source: Statistics Canada, Longitudinal Worker File.

Unequal impacts - Young workers entering the labour market will take an earnings hit

If this year's youth unemployment rate roughly matches the historical high at 19.0%, potential losses could range from about $8,000 to $15,000.

Cumulative five-year earnings loss after graduation due to economic downturn (Bachelor's degree graduates in 2020 by gender)

Description - Cumulative five-year earnings loss after graduation due to economic downturn (Bachelor's degree graduates in 2020 by gender)
Data table for Chart 1
Table summary
This table displays the results of Data table for Chart 1. The information is grouped by Youth unemployment rate in 2020 (percent) (appearing as row headers), Men and Women, calculated using earnings loss (2016 constant dollars) and earnings loss (percent) units of measure (appearing as column headers).
Youth unemployment rate in 2020 (percent) Men Women Men Women
earnings loss (2016 constant dollars) earnings loss (percent)
16 -3,491 -5,467 -1.45 -2.67
19 -9,590 -15,019 -3.98 -7.32
22 -15,689 -24,570 -6.52 -11.98
25 -21,788 -34,122 -9.05 -16.64
28 -27,887 -43,674 -11.58 -21.30
Note: Shown are the cumulative earnings loss in dollars and percent over the first five years following graduation under different scenarios of the youth unemployment in 2020, compared to historial average earnings in first five years following graduation.
Source:Statistics Canada, Census of Population and Labour Force Survey.

Unequal impacts - Lower wage growth, more job displacement, increases in teleworking and automation?

From 2000 to 2018, between 10% and 14% of employees worked at home.

Estimates suggest that between 30% and 50% of workers might have worked from home at the end of March 2020.

The density of industrial robots in Canada increased by 49.5% between 2010 and 2015.

Median real hourly wages of full-time employees aged 17 to 64, 1981 to 2019 (1981:100)

Description - Median real hourly wages of full-time employees aged 17 to 64, 1981 to 2019 (1981:100)
Percentage of permanently laid-off workers whose real earnings 5 years after job loss are at least 25% lower than in the year prior to job loss, 1979 to 2011
2019 dollars indexed
1981 100.0
101.0
102.0
1984 103.0
102.0
1986 101.0
1987 101.6
1988 104.2
1989 102.2
1990 102.6
102.6
102.6
102.7
102.7
102.7
102.7
1997 102.7
1998 104.0
1999 103.4
2000 103.8
2001 105.7
2002 105.2
2003 104.2
2004 105.1
2005 104.1
2006 105.9
2007 106.7
2008 108.5
2009 110.9
2010 111.5
2011 110.6
2012 111.9
2013 114.0
2014 113.7
2015 117.3
2016 115.8
2017 115.6
2018 116.0
2019 117.6
Source(s): Statistics Canada, 1981 Survey of Work History, 1984 Survey of Union Membership, 1986 to 1990 Labour Market Activity Survey, 1997 to 2019 Labour Force Survey.

Temporary and permanent layoff rates for employees aged 15 to 64, 1976 to 2019 (LFS)

Description - Temporary and permanent layoff rates for employees aged 15 to 64, 1976 to 2019 (LFS)
Temporary and permanent layoff rates for employees aged 15 to 64, 1976 to 2019 (LFS)
  Both Sexes Men Women
1976 2.23 2.17 2.32
1977 2.41 2.37 2.47
1978 2.32 2.26 2.42
1979 2.20 2.13 2.30
1980 2.35 2.31 2.41
1981 2.58 2.62 2.53
1982 3.56 3.81 3.23
1983 3.16 3.35 2.92
1984 2.92 3.10 2.70
1985 2.78 2.86 2.69
1986 2.68 2.76 2.59
1987 2.48 2.51 2.43
1988 2.34 2.39 2.28
1989 2.32 2.40 2.24
1990 2.62 2.83 2.38
1991 2.91 3.22 2.57
1992 2.96 3.29 2.60
1993 2.88 3.11 2.62
1994 2.59 2.76 2.40
1995 2.69 2.89 2.46
1996 2.63 2.86 2.39
1997 2.31 2.52 2.08
1998 2.27 2.51 2.01
1999 2.11 2.26 1.95
2000 1.95 2.08 1.80
2001 2.12 2.37 1.85
2002 2.08 2.30 1.86
2003 2.07 2.26 1.87
2004 1.98 2.15 1.80
2005 1.89 2.07 1.70
2006 1.87 2.07 1.67
2007 1.88 2.07 1.69
2008 2.06 2.32 1.79
2009 2.28 2.72 1.85
2010 1.93 2.19 1.68
2011 1.88 2.12 1.64
2012 1.86 2.05 1.66
2013 1.79 2.01 1.57
2014 1.73 1.92 1.53
2015 1.77 1.99 1.54
2016 1.66 1.88 1.43
2017 1.56 1.68 1.43
2018 1.46 1.56 1.35
2019 1.51 1.69 1.33
Sources: Statistics Canada, Labour Force Survey.

Potential impacts of COVID-19:

Percentage of workers facing a high risk of job transformation due to automation

Description - Percentage of workers facing a high risk of job transformation due to automation
Percentage of workers facing a high risk of job transformation due to automation
Percent
Master's degree 1.3
First professional degree 6.1
Bachelor's degree 3.6
College or CEGEP certificate or diploma 9.9
All levels 10.6
Trade or apprenticeship certificate 15.4
High school diploma or equivalent 24.1
No certificate, diploma or degree 33.4
Source(s): Longitudinal and International Study of Adults (LISA), Wave 3 (2016).

Economic impacts - Business uncertainty in the recovery phase

Business uncertainty - Steep challenges facing many firms

Business uncertainty - Prior to the pandemic, firm creation was on a upswing and the financial position of firms was improving

Since 2015, the number of active firms has increased. In the last two years, the economy added an average of 16,500 firms each quarter.

The potential rates of business failures, especially among small firms, that may occur in the wake of the shutdowns dwarf the entry and exit rates observed over the last two decades.

Small firms (with less than 100 employees) account for about 45% of GDP.

Share of GDP

Description - Share of GDP
Share of GDP
  percent
Large (500 or more employees) 45.14
Medium (100-499 employees) 13.17
Small (0-99 employees) 41.69
Source: Statistics Canada, Special tabulations, National Accounts Longitudinal Microdata file

Since mid-2015, the debt to equity ratio for larger firms has been declining, indicating lower debt and interest expenses.

Private non-financial corporations, total debt to equity

Description - Private non-financial corporations, total debt to equity
Private non-financial corporations, total debt to equity
Percent
2007 169.75
169.91
167.13
169.74
2008 175.17
174.04
194.51
217.17
2009 224.94
205.15
193.04
185.88
2010 188.14
192.75
186.43
179.46
2011 180.01
184.93
195.01
190.62
2012 188.74
191.63
189.36
187.85
2013 191.65
195.14
192.55
187.84
2014 186.23
183.26
186.89
191.25
2015 188.66
193.72
201.4
200.69
2016 196.88
193.9
194.97
192.83
2017 192.04
192.95
191.91
188.59
2018 191.32
187.93
186.72
192.58
2019 187.51
188.54
190.33
188.59
2020 213.24
199.74
Source: Statistics Canada, table 38-10-0236-01.

Business uncertainty - Closures rose dramatically during the shutdowns as employees left payrolls

Closures are businesses that did not have payroll employment in the current month, but did have payroll employment in the previous month.

Business sector, openings and closings

Description - Business sector, openings and closings
Business sector, openings and closings
Openings Closures
Jan-15 40,238 31,174
Feb-15 39,723 35,613
Mar-15 35,809 32,798
Apr-15 38,593 37,444
May-15 39,603 34,224
Jun-15 28,382 35,601
Jul-15 41,887 36,725
Aug-15 37,629 35,643
Sep-15 31,280 35,032
Oct-15 38,848 37,302
Nov-15 41,439 36,596
Dec-15 33,579 36,581
Jan-16 39,902 34,422
Feb-16 37,528 45,678
Mar-16 38,029 37,877
Apr-16 39,968 37,010
May-16 37,894 36,716
Jun-16 30,094 34,396
Jul-16 42,999 41,910
Aug-16 38,142 38,385
Sep-16 35,071 36,579
Oct-16 38,994 38,733
Nov-16 43,735 39,925
Dec-16 38,966 37,525
Jan-17 37,172 39,036
Feb-17 38,332 34,832
Mar-17 38,929 42,476
Apr-17 38,646 37,406
May-17 38,867 34,004
Jun-17 36,927 36,771
Jul-17 35,925 38,800
Aug-17 39,399 38,172
Sep-17 41,420 39,303
Oct-17 36,466 38,390
Nov-17 36,157 31,767
Dec-17 37,470 38,757
Jan-18 37,020 38,986
Feb-18 38,983 37,310
Mar-18 41,766 39,658
Apr-18 37,957 37,453
May-18 36,393 39,091
Jun-18 41,517 37,944
Jul-18 37,480 36,691
Aug-18 38,755 43,234
Sep-18 41,078 39,271
Oct-18 39,413 38,616
Nov-18 50,149 49,462
Dec-18 38,899 39,663
Jan-19 38,586 39,887
Feb-19 40,137 40,186
Mar-19 42,409 37,699
Apr-19 39,358 38,978
May-19 39,321 38,796
Jun-19 39,601 39,760
Jul-19 39,617 37,784
Aug-19 37,062 38,097
Sep-19 37,783 38,608
Oct-19 37,545 37,671
Nov-19 37,827 37,492
Dec-19 38,697 38,307
Jan-20 37,676 39,190
Feb-20 35,652 39,321
Mar-20 33,505 59,220
Apr-20 35,597 87,998
May-20 37,724 62,560
Source: Statistics Canada table 33-10-0270-01.

Business uncertainty - Historic declines in the number of active firms

Business sector, change in the number of active firms, year-over-year

Description - Business sector, change in the number of active firms, year-over-year
Business sector, change in the number of active firms, year-over-year
  Business sector, active firms
2016 18,392
6,318
3,529
5,401
1,158
3,928
-87
-2,199
84
-1,082
-1,611
2,898
2017 -5,625
6,307
2,525
796
4,407
8,722
4,970
6,763
10,204
8,410
9,774
7,100
2018 5,661
4,035
9,350
8,494
1,130
4,195
8,141
2,774
2,259
5,398
2,519
3,155
2019 2,892
1,224
3,224
2,813
6,266
2,234
3,568
7,341
4,603
3,964
4,397
5,513
2020 4,922
1,142
-29,857
-82,953
-107,824
Source: Statistics Canada table 33-10-0270-01.

The number of active firms expanded as economic growth accelerated in 2017.

There were 100,000 fewer active businesses in May 2020 than in May 2019.

Over half of these losses were in accomodation and food services, other business services (including personal services), construction, and retail trade.

Business uncertainty - Operating costs and weak demand cloud the outlook for many affected businesses

Business uncertainty - Firms sharply downgrade capital spending plans and focus on protecting balance sheets

Private sector capital spending

Description - Private sector capital spending
Private sector capital spending since the oil shock
2014 (billions of dollars) 2015 (billions of dollars) 2016 (billions of dollars) 2017 (billions of dollars) 2018 (billions of dollars) 2019 (billions of dollars) 2020 (billions of dollars)
Pre-COVID 2020 intentions 199 173 154 156 172 176 178
Post-COVID 2020 intentions 199 173 154 156 172 176 147
Source: Statistics Canada table 34-10-0037.

2020 private capital intentions prior to COVID-19 ($178 billion)

2020 private capital intentions after COVID-19 ($147 billion)

2020 capital intentions
   Percent change  from 2019 levels
All industries -9.5
Private sector -16.6
Public sector 4.2
Mining and oil and gas extraction -27.2
Manufacturing -18.5
Construction -10.1
Accommodation and food -39.2
Retail -11.9
Real estate and rental -27.0
Source: Statistics Canada table 34-10-0037.

Business uncertainty - The recovery in Canadian trade may be influenced by the spread of COVID-19 in U.S. States that are key trading partners

Total trade in 2019 with key states, billions of dollars, COVID-19 cases per 100,000

Description - Total trade in 2019 with key states, billions of dollars, COVID-19 cases per 100,000
Total trade in 2019 with key states, billions of dollars, COVID-19 cases per 100,000
2019 Total Trade Cases per 100,000
Michigan 90,923,966,000 1,078
Illinois 71,587,894,000 1,752
Texas 56,340,917,000 2,022
California 52,096,093,000 1,690
New York 43,914,909,000 2,218
Source(s): Statistics Canada, table 12-10-0099-01, U.S. Center for Disease Control.

Economic impacts - Structural challenges in heavily affected sectors

Structural impacts - Severe implications for transportation and tourism

transportation tourism

Structural challenges in heavily impacted sectors - transportation

Disruptions to the Canadian airline industry are unprecedented

Description - Disruptions to the Canadian airline industry

Disruptions to the Canadian airline industry

The title of the infographic is "Disruptions to the Canadian airline industry"

In brackets underneath the title it says "Percentages indicate year-over-year changes."

The first subheading is "2001 – September 11 events in the United States". The description under this subheading says "A sudden 26% drop in passengers followed by a gradual recovery."

There are five blue arrows in a row pointing to the right. Each arrow contains one month with the year-over-year percentage change for that month. The first arrow is for the month of September and the change is minus 26.0%. The second arrow is for the month of October and the change is minus 18.4%. The third arrow is for the month of November and the change is minus 9.6%. The fourth arrow is for the month of December and the change is minus 3.4%. The fifth arrow is for the month of January 2002 and the change is minus 1.3%.

The second subheading is "2003 – SARS (severe acute respiratory syndrome) outbreak." The description under this subheading says "A gradual decline in passengers, reaching a 26% decrease in May, followed by a gradual recovery."

There are five green arrows in a row pointing to the right. Each arrow contains one month with the year-over-year percentage change for that month. The first arrow is for the month of February and the change is minus 10.1%. The second arrow is for the month of March and the change is minus 12.7%. The third arrow is for the month of April and the change is minus 25.2%.The fourth arrow is for the month of May and the change is minus 26.0%. The fifth arrow is for the month of June and the change is minus 17.1%.

The third subheading is "2020 – COVID-19 pandemic." The description under this subheading says "A steep decline, falling to 97% fewer passengers than the previous year."

There are four red arrows in a row pointing to the right. Each arrow contains one month with the year-over-year percentage change for that month. The first arrow is for the month of March and the change is minus 44.1%. The second arrow is for the month of April and the change is minus 97.0%. The third arrow is for the month of May and the change is minus 96.7%. The fourth arrow is for the month of June and the change is minus 93.9%.

Source(s): Monthly Civil Aviation Survey (5026), table 23-10-0079-01.

Because of weaker demand for energy and autos, Canadian railways were hauling few tonnes of freight

Description - Because of weaker demand for energy and autos, Canadian railways were hauling few tonnes of freight
Because of weaker demand for energy and autos, Canadian railways were hauling few tonnes of freight
March April May June
2019 31,746,377 33,344,944 34,705,350 33,201,400
2020 33,398,609 30,023,466 30,072,833 29,800,000
Source: Statistics Canada, table 23-10-0216-01.

Severe declines in public transit as workers adjust to the new normal

Description - Severe declines in public transit as workers adjust to the new normal
Severe declines in public transit as workers adjust to the new normal
  2019 2020
Jan 159 163.4
Feb 153.5 160.9
Mar 163.5 94.8
Apr 156.5 23.4
May 152.7 26.2
Jun 149.5 37.9
Source: Statistics Canada, table 23-10-0521-01.

Structural challenges in heavily affected sectors – commercial real estate

The pandemic pulled down commercial rents across Canada

Description - The pandemic pulled down commercial rents across Canada
The pandemic pulled down commercial rents across Canada
  Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Office buildings 99.9 99.4 100.1 100.6 100.5 97.4
Retail buildings 99.4 99.4 100.3 100.9 99.9 96.9
Industrial buildings and warehouses 98.9 99.8 100.4 100.9 101.4 98.2
Source: Statistics Canada, table 18-10-0260-01.

The long-term outlook of the commercial real estate market remains in flux as building tenants assess their future office space needs as large numbers of corporate employees continue to work from home . This could put further downward pressure on new office building lease rates.

Structural challenges in heavily affected sectors – retail trade

The retail sector rebounded quickly from storefront closures as companies developed or enhanced their on-line platforms . By June, the volume of retail activity had surpassed pre-COVID levels, while payroll employment in retail industries was 15% below levels in February.

Retail e-commerce sales soar to all-time high

Description - Retail e-commerce sales soar to an all-time high
Retail e-commerce sales soar to an all-time high
  E-commerce In-store
2016 100 100
110.8 99.5
105.1 96
105.8 100.1
104.3 93.6
105.6 96.9
107.8 97.6
111.1 96.4
120 99.3
115.6 99.4
117.9 98.9
165 103
2017 140.9 103
136.5 103.1
142.8 103.1
150.8 105.1
147 103.2
147.8 105
152.9 104.9
152.5 105
151.9 105
156.1 106.9
169.7 105.7
165.7 106.5
2018 165.7 105.2
159.2 105.5
163.8 107.3
167.6 104.5
174.2 107.9
178.6 108.1
167.9 105.9
180.5 107.8
172 108.4
188 108.4
207.4 107.5
177.8 108.1
2019 189.1 107.9
188.7 107.5
204 108.9
203.4 107.7
217.7 108.4
232.5 107.7
225.8 108.8
223.6 109.9
228 107.6
217.7 108.4
220.2 108.9
244.5 108.3
2020 213.6 110.2
230.2 111.4
273.8 97.8
448.6 73
459 85.9
Source: Statistics Canada, Census of Population of 2016.

E-commerce sales increased more among non-essential retailers

Description - E-commerce sales increase more among non-essential retailers
E-commerce sales increase more among non-essential retailers
  In-store E-commerce
Retail trade   -34.5 94.8
Furniture and home furnishings stores   -69.6 191.2
General merchandise stores  -15.1 170.1
Sporting goods, hobby, book and music stores   -79 154.9
Food and beverage stores   3.3 107
Clothing and clothing accessories stores   -84.2 83.3
Health and personal care stores   -16.1 55.6
Building material and garden equipment and supplies dealers   -15.8 40.5
Source: Statistics Canada, Monthly Retail Trade Survey.

From February to May 2020, total retail sales fell by 18% while retail e-commerce sales doubled.

Economic impacts - Investing in resilience and growth

Investing in resilience and growth - Digitalization a driver of structural change in the economy

Employment growth in the digital economy and in clean technology and environmental production has outpaced even high growth areas in the service sector.

Digitally intensive industries have higher rates of innovation and more high growth firms than other sectors.

Employment growth in selected sectors since the 2008-2009 recession

Description - Employment growth in selected sectors since the 2008-2009 recession
Employment growth in selected sectors since the 2008-2009 recession
  2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
All industries 100 102 103 105 106 107 108 110 113 115
Clean technology and environment 100 105 107 110 112 119 118 123 125  
Digital economy 100 103 105 118 121 125 132 137    
Knowledge-based industries 100 103 106 107 109 110 110 114 119 123
Health care and social assistance 100 101 103 105 107 109 112 114 117 121
Source(s): Statistics Canada, special tabulations, "Measuring digital economic activities in Canada: Initial estimates"; Environmental and Clean Technology Products Economic Account; and Survey of Employment, Payrolls and Hours.

Percentage of innovative enterprises, 2017

Description - Percentage of innovative enterprises, 2017
Percentage of innovative enterprises, 2017
  Percent
Digitally intensive industries 81.6
Other industries 78.5
Source: Special tabulations, Survey of Innovation and Business Strategy

Percentage of High-Growth Firms by Industry

Description - Percentage of high-growth firms, by industry
Percentage of high-growth firms, by industry
  Percent
Digital Industries 18.58%
Information & cultural industries 11.87%
Agriculture, forestry, fishing & hunting 11.17%
Mining, quarrying, oil & gas extraction & utilities 10.06%
Finance, insurance, real estate, rental & leasing 9.44%
Construction 9.33%
Manufacturing 9.07%
Administrative, support, waste management & remediation 8.98%
Professional, scientific & technical 7.96%
Wholesale trade 7.23%
Transportation & warehousing 6.84%
Arts, entertainment, recreation, accommodation & food 6.71%
Retail trade 6.20%
Other services (except public admin.) 5.49%
Source: Statistics Canada, special tabulation, National Accounts Longitudinal Microdata File.

Investing in resilience and growth - Digitalization accelerated during the pandemic

Telework capacity, selected industries, 2019

Description - Telework capacity, selected industries, 2019
Telework capacity, selected industries, 2019
  Percent
Accommodation, food services 5.6
Construction 11.1
Manufacturing 19.1
Retail trade 22
Transportation, warehousing 24.5
Health care, social assistance 28.8
Utilities 38.6
Arts, entertainment, recreation 40.1
Public administration 58.2
Information, cultural industries 68.5
Professional, scientific & technical services 83.9
Educational services 84.6
Finance, insurance 85.3
Source: Statistics Canada, Special Tabulations, Labour Force Survey, Occupational Information Network (O*NET).

Investing in resilience and growth - Risks and opportunities associated with digitalization in the workplace are unevenly distributed

Workers at the bottom of the earnings distribution have greater risk of job automation and less opportunity for telework.

Percent of workers at high-risk of automation-related job transformation, by percentile of employment income

Description - Percentage of workers at high-risk of automation-related job transformation, by percentile of employment income
Percentage of workers at high-risk of automation-related job transformation, by percentile of employment income
  Percent
Below 10 26.8
10-24 16.6
25-49 13.7
50-74 5.5
75-89 3.1
90 or above 2.1
Source(s): Statistics Canada, Labour Force Survey, 2019, and Longitudinal and International Study of Adults, 2016.

Percent of adults in jobs that can be done from home, by family earnings decline, dual-earner families, 2019

Description - Percentage of adults in jobs that can be done from home, by family earnings decile, dual-earner families, 2019
Percentage of adults in jobs that can be done from home, by family earnings decile, dual-earner families, 2019
  Husbands Wives Both
1st (Lowest) 18.7 28.6 8.1
2nd 23.5 36.5 10.9
3rd 27.3 45.1 14.7
4th 28.3 49.9 16.3
5th 33.8 55.8 21.7
6th 38 57.1 24.6
7th 40.5 63.2 27.6
8th 50.7 65.9 36.9
9th 53.1 66.9 39.1
10th (Highest) 66.1 74.8 53.9
Source: Statistics Canada, Special Tabulations, Labour Force Survey, Occupational Information Network (O*NET).

Investing in resilience and growth - Environmental and clean technology (ECT) products and services

ECT products and services include clean electricity, clean-technology manufactured goods, scientific services, research and development services, construction services and support services. Examples include solar panels or the design and construction of energy-efficient buildings.

Gross domestic product, ECT activities

Description - Composition of national gross domestic product from environmental and clean technology products

Share of total jobs attributable to ECT activity

Description - Jobs attributed to environmental and clean technology products sector, 2018

Source: Statistics Canada, Environmental and Clean Technology Products Economic Account

Investing in resilience and growth - Many environmental and clean technology (ECT) jobs are relatively high paying and high skilled

Average annual wages for ECT jobs were higher for than for non-ECT jobs across comparable educational levels.

Two-thirds of ECT jobs employ workers with some post-secondary education.

Engineering positions are relatively well represented in the ECT sector.

Share of total jobs attributable to ECT activity

Description - Portrait of environmental and clean technology jobs in Canada, 2017

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