FIND AN EXPERT
Let us connect you with
the right broker for you.

Contact Us

FIND AN EXPERT
Drop your contact info below, and we'll be in touch. 

Contact Us

Roaring Canadian Jobs Market Signals Economic Rebound

Dr. Sherry Cooper • Mar 15, 2021

Easing Restrictions Ignite Canadian Job Market In February

This morning, Statistics Canada released the February 2021 Labour Force Survey showing much stronger-than-expected job growth. The early days of the latest easing in COVID restrictions reinvigorated the labour market. Economists were pleasantly surprised by the rapid rebound. To be sure, there remain risks to the outlook, a rise in virus cases because of the prevalence of the new variants, but the resilience of the Canadian economy is notable.


Employment rose by 259,200 (1.4%) in February, after falling by 266,000 in the prior two months, nearly reversing the effects of the second pandemic wave. The jobless rate fell a whopping 1.2 percentage points to 8.2%, the lowest rate since the beginning of the pandemic in March 2020.


Employment gains in February were concentrated in Quebec and Ontario. Most of the gains in these provinces reflected a rebound in industries—particularly retail trade and accommodation and food services–that had been hardest hit by the lockdowns. Broadly, February’s employment increases were concentrated in lower-waged work. These high-contact service sectors remain among the hardest hit during the crisis (see chart below).


February marked one year of unprecedented pandemic-related changes in the Canadian labour market. Compared with 12 months earlier, there were 599,000 (-3.1%) fewer people employed in February, and 406,000 (+50.0%) more people working less than half of their usual hours. The number of workers affected by the COVID-19 economic shutdown peaked at 5.5 million in April 2020, including a drop in employment of 3.0 million and an increase in COVID-related absences from work of 2.5 million. Since the pandemic began one year ago, there remain over 1 million Canadians who have suffered a loss of employment income.


Pandemic-related changes to the labour market have disproportionately affected young women, particularly teenagers. Compared with February 2020, employment losses among women aged 15 to 24 (-181,000; -14.1%) accounted for nearly one-third (30.2%) of the decline in total employment.


Reflecting a rebound in employment following two months of declines, the number of people on temporary layoff fell by 103,000 (-28.6%) in February. The number of long-term unemployed—those who had been looking for work or been on temporary layoff for 27 weeks or more—fell by 49,000 (-9.7%) from a record high of 512,000 in January.


The number of people who wanted a job but were not actively looking for one and therefore did not meet the definition of unemployed decreased by 33,000 (-5.7%) in February. Had people in this group been included in the unemployment count, the adjusted unemployment rate in February would have been 10.7% (down 1.3 percentage points from January).


COVID-19 has widened income inequality in Canada, as well as in the rest of the world. By far, the lowest income workers have been hardest hit by the pandemic. We have seen net job gains over the past year for higher-income workers. The following chart sheds light on why the housing market is so strong.

The jobless rate plunged everywhere except Atlantic Canada.

Bottom Line 

While Friday’s jobs report surprised on the upside, there are still concerns around an uneven recovery with most of the job losses since last year concentrated in three industries — accommodation and food services, culture and recreation and ‘other services, including personal care. The March employment report may take on even greater importance for the Bank of Canada since it will be the last set of jobs data before the central bank’s April policy decision. Accelerating vaccinations after a slow start would keep the hiring momentum going.


Another strong jobs report combined with recent data showing surprisingly strong growth in Q4 and Q1 economic activity could set the BoC on the road to tapering its bond-buying.


This article was written by DLC's Chief Economist Dr Sherry Cooper and was syndicated with permission.

RECENT POSTS 

RRSP As A Downpayment

By DLC Canadian Mortgage Experts • 28 Dec, 2022
Did you know there’s a program that allows you to use your RRSP to help come up with your downpayment to buy a home? It’s called the Home Buyer’s Plan (or HBP for short), and it’s made possible by the government of Canada. While the program is pretty straightforward, there are a few things you need to know. Your first home (with some exceptions) To qualify, you need to be buying your first home. However, when you look into the fine print, you find that technically, you must not have owned a home in the last four years or have lived in a house that your spouse owned in the previous four years. Another exception is for those with a disability or those helping someone with a disability. In this case, you can withdraw from an RRSP for a home purchase at any time. You have to pay back the RRSP You have 15 years to pay back the RRSP, and you start the second year after the withdrawal. While you won’t pay any tax on this particular withdrawal, it does come with some conditions. You’ll have to pay back the total amount you withdrew over 15 years. The CRA will send you an HBP Statement of Account every year to advise how much you owe the RRSP that year. Your repayments will not count as contributions as you’ve already received the tax break from those funds. Access to funds The funds you withdraw from the RRSP must have been there for at least 90 days. You can still technically withdraw the money from your RRSP and use it for your down-payment, but it won’t be tax-deductible and won’t be part of the HBP. You can access up to $35,000 individually or $70,00 per couple through the HBP. Please connect anytime if you’d like to know more about the HBP and how it could work for you as you plan your downpayment. It would be a pleasure to work with you.

Is There A Difference Between A Deposit And Downpayment

By DLC Canadian Mortgage Experts • 21 Dec, 2022
If you’re new to the home buying process, it’s easy to get confused by some of the terms used. The purpose of this article is to clear up any confusion between the deposit and downpayment. What is a deposit? The deposit is the money included with a purchase contract as a sign of good faith when you offer to purchase a property. It’s the “consideration” that helps make up the contract and binds you to the agreement. Typically, you include a certified cheque or a bank draft that your real estate brokerage holds while negotiations are finalized when you offer to purchase a property. If your offer is accepted, your deposit is held in your Realtor’s trust account. If your offer is accepted and you commit to buying the property, your deposit is transferred to the lawyer’s trust account and included in your downpayment. If you aren’t able to reach an agreement, the deposit is refunded to you. However, if you commit to buying the property and don’t complete the transaction, your deposit could be forfeit to the seller. Your deposit goes ahead of the downpayment but makes up part of the downpayment. The amount you put forward as a deposit when negotiating the terms of a purchase contract is arbitrary, meaning there is no predefined or standard amount. Instead, it’s best to discuss this with your real estate professional as your deposit can be a negotiating factor in and of itself. A larger deposit may give you a better chance of having your offer accepted in a competitive situation. It also puts you on the hook for more if something changes down the line and you cannot complete the purchase. What is a downpayment? Your downpayment refers to the initial payment you make when buying a property through mortgage financing. In Canada, the minimum downpayment amount is 5%, as lenders can only lend up to 95% of the property’s value. Securing mortgage financing with anything less than 20% down is only made possible through mortgage default insurance. You can source your downpayment from your resources, the sale of a property, an RRSP, a gift from a family member, or borrowed funds. Example scenario Let’s say that you are looking to purchase a property worth $400k. You’re planning on making a downpayment of 10% or $40k. When you make the initial offer to buy the property, you put forward $10k as a deposit your real estate brokerage holds in their trust account. If everything checks out with the home inspection and you’re satisfied with financing, you can remove all conditions. Your $10k deposit is transferred to the lawyer’s trust account, where will add the remaining $30k for the downpayment. With your $40k downpayment made, once you sign the mortgage documents and cover the legal and closing costs, the lender will forward the remaining 90% in the form of a mortgage registered to your title, and you have officially purchased the property! If you have any questions about the difference between the deposit and the downpayment or any other mortgage terms, please connect anytime. It would be a pleasure to work with you.
More Posts
Share by: