COVID-19

Canada’s economy continues to recover, as indicated by the 418,500 jobs created in July. However, the increase is less than June, suggesting the initial bounce-back is now behind us. At this point, most restrictions have been lifted across the country but only 55 per cent of jobs lost between February and April have been recovered, meaning employment is still down more than 1.3 million compared to February. Fully restoring Canada’s employment levels will take time as business closures are holding back both consumer and business confidence.

Focus Area—Canadian Economics

Consumer sentiment continued to improve in June. Our Index of consumer confidence nudged up 16 points this month to 79.7 (2014 = 100), roughly two-thirds of its pre-pandemic level (120.6).

Consumer confidence improved across all regions this month as did sentiments about future employment. With this increased optimism, the share of people who believe now is a good time to make a major purchase rose to 20.4 per cent in June, up 5.8 percentage points from May. Overall, however, Canadians are still cautious about making major outlays. More people feel pessimistic about making a major purchase now (57.5 per cent) than during the peak of the 2008 financial crisis (54.3 per cent).

Focus Area—Canadian Economics

The travel and tourism sector has been hit especially hard by the COVID-19 outbreak. This important sector of the Canadian economy generates billions for our economy and employs millions of Canadians. A typical weekend in late March sees about 40,000 Americans enter Canada by land. On March 29 of this year, only 531 Americans crossed land borders. The combination of closed borders and physical distancing guidelines has had travellers re-evaluating their plans.

In our spring survey, we typically find around 75–80 per cent of Canadians are planning a trip. This year, only 45 per cent are. We expect domestic travel to return to something similar to normal next April. International travel will likely remain at below-normal levels until next December.

Focus Area—Canadian Economics

Business sentiment had already been languishing at its lowest level since the financial crisis. From that weak starting point, the Index of Business Confidence dropped by half, its lowest level on record. Very few business leaders are expecting the economy, or their firms’ fortunes, to improve in the next six months.

Among the respondents to the survey, 63 per cent said they expect economic conditions to be worse while just 25 per cent believed economic conditions will improve. In the previous quarter, the ratio of pessimism to optimism was 25 to 20. With the index well below its previous low, it seems likely that business investment will be exceedingly weak for the foreseeable future, which will have a lasting impact on the country’s potential economic growth.

Focus Area—Canadian Economics

The Conference Board examined changes in the number of job postings across Canada, and they paint a stark picture. The good news? Organizations are still advertising for positions. The bad news? Job postings fell by half between the beginning and the end of March, and that drop is continuing into April.

Every province and territory saw at least a 30 per cent decline in the number of job postings during March. No part of the country has been unaffected, and we will need a coordinated effort to restart the economy once our health authorities deem it safe to do so.

Focus Area—Canadian Economics

Canada is in the midst of the worst economic downturn it has experienced in decades. The shutdown of non-essential businesses and the physical distancing measures in place across the country to slow the spread of COVID-19 have brought activity in many industries to a near standstill. In the second quarter of this year, the decline in GDP is forecast to hit a staggering 25 per cent in annualized terms. On top of that, Canada’s energy sector is dealing with plummeting demand for oil and a price war between Saudi Arabia and Russia. Our forecast for 2020 calls for a steep decline in economic growth in every province.

This Preliminary Provincial Outlook updates our outlook for the Canadian economy and provides our new estimates for growth in each of the provinces in this challenging year.

Focus Area—Canadian Economics

We expect the U.S. economy to decline by a staggering 22.0 per cent in the second quarter of this year. It will then begin to recover, based on our assumption that the impact of the virus will start to fade in the summer months. Overall real GDP growth is forecast to drop by 3.5 per cent in 2020, down from 2.3 per cent growth in 2019. A sharp recovery in growth is anticipated in 2021. What has saved the U.S. economy from a far worse fate has been the widespread and dramatic steps taken by the federal government and the U.S. Federal Reserve to ensure that it doesn’t spiral out of control.

In the space of just two months, world economic activity plunged as the world’s largest economies closed factories, schools, airports, non-essential shops, and other businesses and activities. At the beginning of this year, we expected global GDP to expand by 2.6 per cent in 2020. But the adverse developments over the past two months will likely reduce that to no growth at all this year. And if the virus is not contained, we could even see a global economic contraction.

Focus Area—Canadian Economics

In another sign Canada’s economy is on the path to recovery, employment rose by a record 952,900 in June. The rebound was concentrated in services, part-time and low-wage jobs—a partial recovery in the same segments that were hardest hit by the pandemic. Despite the solid gains in June, Canada’s economy still has a long road back to recovery. Employment is still down 1.8 million when compared to pre-pandemic levels, with the largest gaps in industries that will not recover quickly.

Focus Area—Canadian Economics

In another sign that the worst of the economic decline from COVID-19 is behind us, employment rose by 289,600 in May. Given the survey dates didn’t coincide with much of Ontario’s gradual re-opening, employment growth will continue in June as restrictions are gradually eased across the country. Of course, even with the increase this month, employment remains well below where it was in February, and the road to recover the net 2.7 million jobs lost will be long.

Focus Area—Canadian Economics

Consumer confidence edged higher in May on the heels of two months of record-breaking declines that had brought our Index of Consumer Confidence to a historical low. The index climbed 16.2 points in May, after hitting a record low last month, and sits at 63.7 (2014 = 100), slightly higher than its trough (56.3) during the 2008 financial crisis.

While the increase is certainly good news, the index is still down nearly 60 points since before the lockdown in February. This tepid gain shows the households across the country remain cautious about the economy and this will weigh on purchasing decisions over the coming months.

Focus Area—Canadian Economics

Canada lost nearly 2 million jobs in April during the peak of the COVID-19 economic impact. This brings total job losses since February to 3 million, close to our late March forecast of 2.8 million. In all, employment has fallen 15.6 per cent since February. We expect the worst of the job losses are behind us and the labour market will slowly recover as restrictions are eased.

While it’s troubling that job losses are concentrated in low wage industries, the CERB is a good income support for workers in these jobs. In all, the latest job report suggests that government programs have helped stem job losses in the country, which should foster optimism as we head into the recovery phase.

Focus Area—Canadian Economics

The Index of Consumer Confidence fell by 41.0 points in April—a record decline and a record low. Canadians are especially worried about the future. Nationally, 36.1 per cent of respondents expect their finances to worsen over the next six months. With little optimism about the future, Canadians are unwilling to make a major purchase. Over three-quarters of respondents think now is a bad time to make a major purchase—more than 20 percentage points above the previous record.

Overall, this month’s results reflect the speed and depth of Canada’s economic slowdown. The sharp plunge in consumer confidence supports our view that economic growth in the second quarter of 2020 will be the worst we have seen in the past 60 years.

Focus Area—Canadian Economics

In the first wave of COVID-19 related job losses, Canada lost over one million jobs in March. This was the largest monthly employment decline ever and we expect even more job losses in April as the full impact of mandatory closures and physical distancing measures are reflected in the data. The initial job losses were concentrated in accommodations, food service, retail trade and cultural industries. April is likely to show a broader decline as more businesses scale back due to mandatory closures and reduced demand.

Focus Area—Canadian Economics

From family obligations to remote work, we’ve surveyed COVID-19’s effects on Canadian employers and workers. But how is the pandemic changing the ebbs, flows, and makeup of the workforce? We asked organizations about how COVID-19 is affecting their turnover, attraction, and retention rates—and the strategies they’ve put in place to manage.

Focus Area—Human Resources

Employees are choosing to stay put

(n = 124; percentage of organizations)

Q: Since the onset of the COVID-19 pandemic, the following rates have:

Note: Total may not add to 100 due to rounding.
Source: The Conference Board of Canada.

COVID-19 is here to stay, at least for the foreseeable future. Will employers keep their employees working remotely? And will remote workers be on the hook for home office expenses?

Pre-pandemic, nine in 10 organizations had less than 20 per cent of their workforce working remotely. COVID-19 has flipped this on its head. Now, nearly two thirds of organizations have at least 60 per cent of their workforce working remotely.

Focus Area—Human Resources

Home is where the office is

(n = 273; percentage of organizations)

Q: What percentage of your organization’s workforce works remotely?

Note: Total may not add to 100 due to rounding.
Source: The Conference Board of Canada.

Summer is typically prime vacation time. Will it be this year? With nowhere to go and travel restrictions still in effect, employees may be less motivated to use their vacation in the coming months.

This is a top concern among employers that could lead to paying out large amounts of unused vacation, or more employees taking time off at year-end. Organizations are encouraging—or even requiring—their employees to draw down their accrued vacation. Only a small number of organizations are directing when employees must take this time off.

Focus Area—Human Resources

More encouragement than requirement

(n = 296; percentage of organizations)

Q: As a result of COVID-19, how is your organization directing employees to use vacation before year-end (or other deadline)?

Note: Total does not add to 100 as more than one response could be selected.
Source: The Conference Board of Canada.

As provinces move to ease restrictions, Canadian organizations must consider a return of their employees to physical workplaces. With COVID-19 still active, what will this shift look like, and how prepared are employers for the risks? How will this impact working arrangements in the long term?

Throughout the pandemic, many employees have been working remotely. With easing restrictions, employers must consider whether they will be calling these employees back to the workplace. Only 8 per cent of organizations are fully prepared to reopen workplaces. 40 per cent will require employees currently working remotely to return to the workplace in some capacity. This is most common in transportation and warehousing, where 58 per cent of employers have taken this approach.

Focus Area—Human Resources

Few organizations fully prepared to reopen workplaces

(n = 279; percentage of organizations)

Q: When governments lift restrictions related to your location(s) and/or industry, how prepared is your organization to reopen workplaces?

Note: Total does not add to 100 due to rounding.
Source: The Conference Board of Canada.

As COVID-19 distancing measures continue into the year, Canadian organizations are exploring ways to reduce any overhead they can. How is this affecting employee benefits coverage?

68% of organizations have not made—nor are they considering making—any changes to the employee benefits offerings we surveyed. Leading the pack, 46 per cent of utility companies have made or are considering making changes to employee benefits coverage. Retail trade follows at 44 per cent of companies. Almost all organizations in these industries are looking to increase coverage as opposed to reducing it. Across all organizations that have made changes, 46 per cent increased their paid sick leave.

Focus Area—Human Resources

Most organizations staying the course on employee benefits

(n = 333; percentage of organizations)

Q: What changes has your organization made your employee coverage?

Source: The Conference Board of Canada.

As COVID-19 distancing—and budgeting—measures continue, many HR leaders are re-evaluating the status of upcoming salary increases and short-term incentive payouts.

The Conference Board of Canada has asked organizations across Canada how they’re managing pay planning for employees at all levels. Here’s what we found.

Focus Area—Human Resources

Few pay cuts so far

(n = 279; percentage of organizations)

Q: Has your organization implemented any of the following actions due to COVID-19?

Source: The Conference Board of Canada.

As COVID-19 continues to shift the daily rhythms of Canadian households, millions of Canadians are feeling the pinch to balance competing demands of work and family. What are their employers doing to help?

The Conference Board has asked organizations across Canada how they’re accommodating employees with family responsibilities. Here’s what we found.

Focus Area—Human Resources

New realities mean new accommodations

(n = 185; percentage of organizations)

Q: For employees who cannot work their regular working hours due to caregiving needs, what accommodations has your organization provided?

Note: Total is greater than 100 as respondents could select more than one option.
Source: The Conference Board of Canada.

The Conference Board has asked HR professionals across Canada about the many ways they’re supporting their public-facing workers. Here’s what we found.

Nine out of 10 organizations offering premiums are adding a fixed amount to employees’ pay. On average, employers are providing $4.43 per hour worked.

Focus Area—Human Resources

Few front-line employees rewarded for service so far

(n = 157; percentage of organizations)

Q: Are you providing pay premiums to non-unionized employees still coming into work?

Note: Totals may not add to 100 due to rounding.
Source: The Conference Board of Canada.

The spread of the novel coronavirus disease is changing the nature of work. For many Canadians, it’s also changing how they get paid. As businesses adapt to physical distancing, how are Canada’s workers—especially those who cannot do their jobs remotely—being supported by their organizations?

91% of organizations are navigating our new reality with employees who cannot work remotely.

Focus Area—Human Resources

Locked out of work, but still being paid

(n = 160; percentage of organizations)

Q: How are you compensating employees who cannot access their physical workplace and cannot otherwise perform their work remotely?

Note: Total is greater than 100 as respondents could select more than one option.
Source: The Conference Board of Canada.