MRO Magazine

Study analyzes Canada’s employment downturn from Oct. 2008-Oct. 2009

Ottawa, ON -- A recent Statistics Canada study shows that employment in Canada declined much faster in the ear...

Ottawa, ON — A recent Statistics Canada study shows that employment in Canada declined much faster in the early months of the current economic downturn than it did in the early months of the recessions in 1981 and 1990. However, employment levels in the next seven months of this current downturn were relatively stable, while employment had continued to decline in previous downturns.


In October 2008, employment had reached an all-time high in Canada. Five months later, it had fallen by 2.1%. After five months in 1981 and 1990, it had declined by 0.8% and 0.6%, respectively.



However, in recent months, employment levels have been relatively stable. In 1981/1982, employment losses continued for 17 months and in 1990/1991, they continued for 11 months.


While the 11-month employment decline of the early 1990s was followed by six months of growth, it then experienced another seven months of employment declines.


Between October 2008 and October 2009, total employment declined by 400,000 or 2.3%, while the unemployment rate rose from 6.3% to 8.6%.


Among the groups experiencing the heaviest employment losses during the 12-month period were workers in the manufacturing and construction sectors, young people, low-paid workers, families with young children, and core working-age immigrants who were recent arrivals in Canada.


Manufacturing and construction sectors hardest hit


Between October 2008 and October 2009, the manufacturing and construction sectors experienced the largest declines in employment of all sectors. These industries also experienced the largest employment declines over the first 12 months of the previous two economic downturns.


In manufacturing, employment fell by 218,000 (-11.0%) from October 2008 to October 2009, and the decline was widespread. Manufacturers experiencing notable decreases included fabricated metal products; transportation equipment manufacturing; paper and printing; and furniture and related manufacturing.


Manufacturing employment has been falling since late 2002, but the current downturn accelerated the pace of decline. Since November 2002, employment in manufacturing has fallen by 573,000. More than one-third of this decline occurred from October 2008 to October 2009.



Since October 2008, employment in construction declined by 73,000 (-5.8%), and while the trend in manufacturing employment has been declining over the 12-month period, all of the decrease in construction employment was during the first 5 months.


Some industries did not have employment losses over this 12-month period. Modest employment gains took place in real estate and leasing; information, culture and recreation; and health care and social assistance. During the first 12 months of the previous two downturns, health care and social assistance also experienced modest employment gains, while the other two industries either experienced employment declines or slower growth compared with the current 12-month period.


Declines among private sector, youth, low-paid workers, families with children


Some groups have been hard hit in this downturn. This was particularly the case for the private sector, young people, low-paid workers and families with children. Modest employment gains occurred among those aged 55 and over.


Between October 2008 and October 2009, the number of employees in the private sector fell by 449,000, compared with a decline of 55,000 among public employees. At the same time, self-employment rose by 104,000.


Employment among workers earning less than $10 an hour fell 24.8%, the largest decline. The majority were youth, but nearly one-third were aged 25 to 54. On the other hand, the number of employees who earned $40 or more an hour increased during the 12-month period.


As in previous downturns, employment losses among young workers have been a consistent feature. During the 12-month period, employment in the age group 15 to 24 fell 10.5% among young men and 6.9% among young women. Furthermore, young people experienced employment losses throughout the entire 12 months.


Employment among core-working age men aged 25 to 54 whose highest level of education was at most high school fell 5.2%, as many were employed in manufacturing and construction. Core-working age women with the same educational attainment also experienced employment losses (-3.6%).


The effect of the downturn was also different across family types. Families with children were notably affected. Single mothers with children were hit hard, with a 6.8% employment decline. As well, employment fell by 2.5% among mothers and 2.4% among fathers in two-parent families with at least one child under the age of 18.


Less full-time work, more temporary employment


Between October 2008 and October 2009, there was less full-time employment and more temporary jobs.


Full-time employment declined 2.2%, a faster pace than the 1.6% drop in part-time work. Employment among people working 40 or more hours a week declined 4.6%. The number of employees with a shorter full-time schedule (between 30 and 34 hours) increased.


In addition, the number of permanent employees declined by 3.8%, while the number of temporary employees increased by 0.7%.


Recently-arrived immigrants


Between October 2008 and October 2009, immigrants in the core working-age group who had landed within the previous five years were more affected by the economic downturn than Canadian-born workers. Employment declined 12.9% among this group of immigrants, more than five times the decline of 2.2% among the Canadian-born. The bulk of the losses for these immigrants occurred among those working in manufacturing.


Immigrants who landed in Canada more than 5 years to 10 years earlier, however, experienced smaller losses than the Canadian-born over the 12-month period, and those who landed more than 10 years earlier experienced modest employment gains.


The study “Canada’s employment downturn: October 2008 to October 2009” was released in the November 2009 edition of the Canadian Economic Observer, Vol. 22, no. 11 (11-010-X, free), that is available today from the Publications module at




This release is based on an analytical report in the Canadian Economic Observer. The report provides an in-depth review of the impact of the current economic downturn on Canada’s labour market.


Using monthly data from the Labour Force Survey, it assesses developments between October 2008, when employment was at an all-time high and unemployment rates near historic lows, and how the labour market looked a year later in October 2009. The report also compares the situation during this 12-month period with previous economic downturns.