Two million Canadians have already lost or are at immediate risk of losing their jobs in the COVID-19 crisis, pushing the country’s unemployment rate to an estimated 13.9 per cent, says a new analysis from the Canadian Centre for Policy Alternatives.
“The unemployment rate in March is on track to be the highest in 70 years, and we’re only at the beginning of the economic fallout,” analysis author David Macdonald said in a statement emailed to media.
If three-quarters of those 2 million potential job losses take place ― what the analysis calls “the realistic case” ― Toronto would lose some 261,000 jobs, Montreal would lose 192,000, and Vancouver would see 140,000 jobs disappear, Macdonald found.
In this scenario, youth unemployment jumps from 10.4 per cent currently, near a record low, to around 33 per cent.
The damage would hit low-income workers most. One-third of those earning $14 to $16 per hour are at risk, while only one per cent of those earning more than $40 per hour are at risk, the analysis found.
“Wednesday’s announcement of the Canada Emergency Response Benefit (CERB) is a critical step towards supporting workers, and highlights how inadequate and bureaucratic the employment insurance system was in normal times,” Macdonald wrote in the analysis.
The federal Liberals on Wednesday augmented the stimulus package they announced last week, combining several earlier programs into the CERB, which tops up the incomes of those who have lost their jobs or had income reduced as a result of COVID-19, up to $2,000 a month.
Wednesday’s expansion added a net $25 billion to the cost of the federal Liberals’ stimulus package, which now sits at $107 billion, including new spending and deferred taxes.
The CERB appears at least temporarily to be taking over from an overwhelmed employment insurance system.
Macdonald said 27 per cent of the workers laid off in this crisis would have been denied EI benefits, “but will likely receive the CERB.”
“Seventy-eight per cent of workers at immediate layoff risk in major cities will be better off with a CERB of $2,000 a month than they would have been receiving EI,” the report said.
Here is the CCPA’s chart breaking down forecasts for jobless rates for provinces and cities.
Chart: David Macdonald/Canadian Centre for Policy Alternatives