Canada added 246,000 jobs in August, but employment still 1 million short of pre-COVID level

Canada's economy added 246,000 jobs in August, a figure that pushed the jobless rate down 0.7 percentage points to 10.2 per cent.

Statistics Canada reported Friday that most of the new jobs recorded in the month were full-time work. The figure was in line with what economists had been expecting.

August's number brings the four-month total of new jobs to almost two million since May. But because of the plunge in March and April, Canada still has 1.1 million fewer paid workers than it did in February, before COVID-19 hit.

But job losses aren't the only way that the pandemic is impacting the job market. Many more people are finding themselves working less than they normally do, too. 

Statistics Canada says an additional 713,000 people who still had jobs during the month had what the data agency calls a "COVID-related absence" from work.

That brings the number of workers affected by the pandemic to 1.8 million. In April, that figure peaked at 5.5 million, with three million lost jobs and 2.5 million people working less.

The number of people who described themselves as being on "temporary layoff' — meaning they expect to eventually return to their old job — declined to 230,000 last month. That number peaked at 1.2 million in April, but the figure going down is not necessarily good news, because it means those people may still be laid off, but it's no longer "temporary."

Katherine Judge, an economist with CIBC, says that as those layoffs move from temporary to permanent, many people will start to look for work in new fields and discover they don't have the right qualifications or experience, which can take time to address.

"One thing that happens in a recession is that people look for new jobs and discover there is a skill mismatch," she said in an interview. That's one of the reasons why she expects the jobless rate will be at least three points higher than it was before COVID-19, at least into 2021. 

"That tells you how slow the recovery is expected to be," she said.

Almost every province added jobs, but most came from the two provinces hardest hit in the early days of the pandemic — Quebec added 54,000 new jobs, while Ontario gobbled up more than half of the national total, with 142,000 new positions.

Toronto-Dominion Bank economist Sri Thanabalasingam said that while the numbers on the whole were encouraging, they underline just how slow the recovery is likely to be from here on out.

"It will be difficult for the labour market to maintain the current pace of job gains," Thanabalasingam said. "Future employment improvements will be closely tied to the path of the virus. This final third could be the longest stretch in the road to recovery for Canada's labour market."

A big reason why the next few months could be harder for the job market is very Canadian: the weather.

The hard-hit restaurant sector lost about half of its jobs as lockdowns and quarantines forced the closure of restaurants across the country.

A few have been making a go of it and hiring people back during the summer months by focusing on patio service and takout orders. But the cold months to come could bring an end to that.

Paul Bognar is president of Service Inspired Restaurants, which owns several dozen pubs in and around Toronto. 

"Sixty per cent of our revenue is happening on this small little patio extension," he said of the makeshift patio set up at one the company's pubs, Duke's, on Front St. in Toronto.

The company has hired back some of its laid-off staff, but he worries that a second wave of the virus could lead to a second wave of layoffs that many in the sector will not recover from. 

"These winter months are going to be the tell tale. And I think we're going to see a lot of restaurants not making it."