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Canada Employment Update November 2020

The Employment Rebound is Slowing, How will this Impact Commercial Real Estate?

Statistics Canada’s October Labour Force Survey shows that Canada’s economy created, or perhaps more accurately rehired, 83,600 jobs in October 2020.  After losing over 3 million jobs between February 2020 and April 2020, we are now within 636,000 jobs of the February 2020 peak.

Although the 83,600 jobs created in October more than quadruples the 10-year monthly average of 20,000 jobs, it pales in comparison to the almost 400,000 jobs created on average each month between May and September of 2020.  This deceleration in job growth was expected, as the low hanging fruit of people returning to work is exhausted,  However, with newly announced COVID-19 closures across the country, it is clear that this deceleration in growth will continue, which will ultimately delay forecasters’ expectations of full employment recovery by year-end 2021.

Canadian Employment by CMA 

When looking at employment by market we can clearly see there are outperformers in job creation when observed on both a year-over-year or 3-month basis.  On a year-over-year basis all markets remain below where they were last year, however, Montreal, Halifax, Winnipeg, Toronto and Saskatoon are all performing better than the national average and are within 2% of where they were at this time last year.  Furthermore, most major markets, except for Ottawa-Gatineau, are performing better than the national average, meaning it is the smaller markets, which are potentially more tourism or consumption and production based economies, that are being disproportionately impacted.  Calgary, and maybe this is surprising, has led the pack in 3-month job growth according to Statistics Canada, however, a lot of this has to do with the fact that according to Google Mobility Trends, Calgary’s return to “normal” mobility is outpacing Canada as a whole.  With the recent surge in COVID-19 cases in Alberta and Calgary, this outperformance may only be temporary.

Canadian Employment by CRE Use

Any outlook for commercial real estate traditionally uses employment growth as a meaningful indicator of demand.  As such, looking at the different sectors by the type of commercial real estate they normally occupy is a useful exercise. 


Despite the exceptionally low levels of people physically returning to the office, the predominant office intensive employment sectors, being FIRE (Finance, Insurance, and Real Estate) and PSTS (Professional, Scientific, and Technical Services), have actually seen increases in 2020 year-to-date, up 1.2% and 2.5%, respectively.  However, employment in the Business Services sector, those companies that generally support the operations of other companies, remains down 7.5% year-to-date, which is a stark improvement from the -12.5% experienced at the depths of the trough.  This dynamic is contributing to the perceived uncertainty surrounding workplace strategy going forward.

Interestingly, industrial using employment remains down, however, many markets across Canada continue to see stable or even strong demand for industrial space, specifically when it comes to ecommerce fulfillment type users.  This backs up the assumptions of increased spend on mechanization and automation.  The increase in manufacturing employment was expected, and the recent automotive manufacturing investments in Ontario are welcomed.  On the other hand, the Accommodation and Food Service, and Wholesale and Retail Trade sectors have and continue to take the hardest hits, and the resurgence in COVID-19 cases will further impact these sectors and the real estate they occupy.  The ramifications on retail properties across Canada will be something to pay close attention to.