Canada lost 200,000 jobs in January as Omicron hit hard

Unemployment rate rises to 6.5%, job losses about double what was expected

Pete Evans · CBC News

Canada’s economy lost 200,000 jobs last month, according to Statistics Canada, as COVID-19 shutdowns related to the Omicron variant saw many businesses close up shop.

The data agency reported Friday that the decline pushed the unemployment rate up half a per cent, to 6.5 per cent. That’s the first increase to Canada’s jobless rate since April 2021.

Most of the job losses were concentrated in Ontario and Quebec, two provinces that saw some of the hardest and earliest surges of the Omicron-driven wave, and which both moved to lock down in reaction. Economists had been expecting a bleak figure, but the 200,000 lost jobs was roughly twice what they were anticipating.

As was the case during previous waves, accommodation and food services bore the brunt of the job losses, with 113,000 jobs lost during the month. Another public-facing industry, retail, was also hit hard, losing 26,000 workers.

‘No choice’ but to close

Drew Bathory, co-founder of the Element Studio fitness centre in Montreal is one of thousands of employers who has tried diligently to keep the doors open throughout the pandemic.

The business opened only weeks before COVID-19 first hit in March of 2020, and while they gamely made a go of it through multiple waves, they recently pulled the plug for good.

“We planned to close down for holidays [and] planned to reopen but just never did,” he told CBC News in an interview.

The centre employed more than 40 people at one point, and shrank to about 20 staff due to various capacity restrictions, but Omicron has proved to be too much.

“We really have no choice,” he said. “We have tried.”

Swift rebound likely

It may be too late for businesses like Element, but economist Royce Mendes with Desjardins says there is reason for some hope in the numbers. Goods-producing industries actually added 23,000 jobs during the month, he noted, a sign that parts of the economy may have turned the corner.

“Virus-related hospitalizations appear to have peaked at the national level, which has allowed provincial governments to ease restrictions and made Canadians feel a bit safer about venturing out of their homes again,” he said. 

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

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