February 2022

Spotlight on data and research

Working from home for an employer located in another province or territory

Following the COVID-19 pandemic, some Canadian businesses are moving towards more flexible work arrangements, including allowing employees to telework from another province or territory. Using data from the Canadian Survey on Business Conditions and integrated data from Statistics Canada’s Longitudinal Worker File and the 2001 and 2016 Censuses of Population, this article estimates that 113,000 employees might telework exclusively from a different province or territory in the near future, up from 12,600 in 2016.

The employees expected to work from home for an employer located in another province or territory represent about 4% of all employees expected to do some telework in the near future. The ability to telework interprovincially is still confined to a fairly narrow segment of the workforce that is highly educated and earns substantially higher wages on average than other teleworkers.

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Understanding the tax implications of Registered Retirement Savings Plans

Canadians with less financial literacy are more likely to use Registered Retirement Savings Plans (RRSPs) to reduce their annual taxes in the short term rather than optimize the benefits of RRSPs for long-term retirement planning.

This article, by researchers at Statistics Canada and the Retirement and Savings Institute at HEC Montréal, uses a new dataset that is the first in Canada to combine longitudinal information from tax records with a direct measure of financial competence. It also shows that tax filers with high financial literacy were more likely to understand the tax implications of withdrawing money from their RRSPs, thereby benefitting more from the wealth accumulation in these plans.

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Insights

Immigrant labour market outcomes during recessions: Comparing the early 1990s, late 2000s and COVID-19 recessions

Recessions often have a more severe impact on jobs for recent immigrants than for the Canadian born. However this was more apparent during the recession of the early 1990s compared to that of 2008-2009.

While there was a marginal difference between recent immigrant and Canadian-born men in their employment and unemployment rates over the COVID-19 recession, recent immigrant women experienced a greater increase in unemployment than Canadian-born women. This is due in part to their overrepresentation in the hardest hit sectors of the economy—accommodation and food services and retail trade.

Recessions can have a “scarring” effect on future earnings. This was evident for immigrants entering Canada during the early 1990s recession, although there was little evidence of such an effect during the 2008–2009 recession. It is too early to tell whether the COVID-19 recession will have scarring effects on immigrants’ labour market outcomes.

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International students as a source of labour supply: Pre-immigration study in Canada and post-immigration earnings

Immigrants who studied in Canada before immigrating earn more in the first two years after immigration than those who did not study in Canada. This advantage was due entirely to their better official language ability and much higher shares with pre-immigration Canadian work experience.

This earnings advantage increased over time. Ten to 11 years after immigration, economic immigrants with two to five years of pre-immigration Canadian study experience earned 9 to 12% more than those who did not.

From 2000 to 2019, the share of new economic immigrants with Canadian study experience increased from 6% to 38%. This trend occurred alongside increasing numbers of international students and the implementation of immigration programs designed to admit economic principal applicants with Canadian study experience.

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Research articles

The relative earnings of individuals in designated visible minority categories in Canada across four workplace sectors

This study compares the weekly earnings of workers in designated visible minority and White categories employed in four broad sectors of the Canadian workforce. Differences in earnings were most prevalent in small commercial firms and least prevalent in the non-commercial sector. Differences in weekly earnings are expected to be less prevalent in larger firms because of factors such as formalized human resources management, unionization and sensitivity to issues of diversity and equity.

In small commercial firms, the weekly earnings of White men were significantly higher than the weekly earnings of men in seven of the nine designated visible minority categories considered. In large commercial firms, the weekly earnings of White men were significantly higher than those of men in four of the nine categories. The earnings gap was consistently largest among Black men.

When comparing White women to women in visible minority categories, significantly lower weekly earnings were consistently observed only among Black women.

In the non-commercial sector, weekly earnings of both visible minority men and women were either higher or not significantly different than the weekly earnings of White men and women.

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The Canada emergency wage subsidy program and business survival and growth during the COVID-19 pandemic in Canada

Between March and September 2020, the Canada Emergency Wage Subsidy (CEWS) was used at least once by 41.6% of the employer businesses that were active in February 2020. Estimating the relationship between the use of the CEWS and business closures is important for understanding the role that the program played in assisting businesses through the pandemic. 

Among active employer businesses active in February 2020, using the CEWS between March and September 2020 was associated with a 6.9 percentage point lower probability of being closed from October 2020 to March 2021. This result takes into account the pre-pandemic characteristics (e.g, indebtedness, profitability, liquidity, productivity, and size) of the business and the use of other support programs.

For employer businesses that were active in February 2020 and that remained open after October 2020, CEWS usage was associated with a 5.0 percentage point higher cumulative employment growth rate between February and the average of the last three months in 2020.

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