Canada’s Reopening Economy in 2022

Canada is slowly emerging from its COVID cocoon. As we take flight into the Canada of 2022, how have the changes and instability of the last 2 years altered the economic terrain of our country?

According to Statistics Canada, the national unemployment rate, which peaked at nearly 14% in mid-2020, has almost returned to its pre-pandemic level. In February 2020, unemployment across Canada was at a historic low of just 5.7%; now as of September 2021, it sits at 6.9%.

However, this promising statistic may not paint an entirely accurate picture of Canadian employment as it is not necessarily indicative that Canadians who lost their jobs during the pandemic are now back in employment. Per Stats Can, “the decline in the unemployment rate was driven instead by an increase… in the number of Canadians participating in the labour market.” Retirees, stay-at-home parents, and students are among those who have elected to rejoin the workforce, many choosing to do so due to financial instability caused by COVID-19. Conversely, many formerly-employed people have not yet returned to work as they are unsatisfied with the compensation being offered relative to what is being asked of them.

This divide is especially evident in the restaurant industry, which was among the hardest hit by forced closures during the pandemic. Restaurants Canada reports that over 12,000 foodservice establishments across the country have been forced to close permanently, equating to hundreds of thousands of jobs lost. Despite these losses, many surviving restaurants say they are struggling to find staff as they reopen. Former front and back-of-house employees, dissatisfied with the wages and working conditions offered by foodservice employers, are opting to delve into new industries. The ICT sector, in comparison, continues to lead growth in employment and profit. Generally offering flexible hours, above-average pay, and generous benefits packages, it’s no wonder Canadians are flocking to ICT jobs.

Stats Can reports that wages have gone up an average of 4.6% over the last two years. In comparison, grocery prices across the country have gone up by an estimated 3-5% this year alone. Gas prices have increased by around 20 cents per litre since 2019. Looking at the cost of rent, our East and West coasts tell very different stories. Stats show that there are far more available rental units in Montreal and Toronto compared to Vancouver, which is reflected in monthly rental rates. The average rent for a one-bedroom apartment in Vancouver is over $2100, up 9% this year. Heading towards the East, Toronto’s average rent clocks in a fair bit lower at $1800, a 10% decrease from last year. Further east still we find Montreal sitting at a mere $1350, about even with where it’s been for the last few years.

The Canadian real estate market seems to have not been slowed by the pandemic. The GTA records a 12-36% increase in the cost of purchasing a home from 2020, with condos on the lower end of that statistic and townhomes on the higher end. Montreal and Vancouver both show around a 15% increase in all types of homes. With the average cost of a condo in each of these major cities (such as Toronto) sitting around the $700,000 mark, it’s clear why these cities have a need for affordable rental housing.

So, as Canada unfurls its wings in the post-pandemic world, will we see an exodus of West-Coasters heading East in search of more affordable and available home rentals? Will so-called labour shortages drive employers to be more people-focused rather than profit-driven? The only thing that is certain is that our sights should be firmly set in one direction: forward.