One-in-six Ontario jobs hit by COVID-19: Financial Accountability Officer
About 1.2 million Ontarians have lost their job, been temporarily laid off or had their hours scaled back amid COVID-19.
The Ford government’s emergency shutdown of non-essential workplaces has hit nearly one in six jobs since it was first announced mid-March — and that’s expected to keep spiralling as the second wave of closures and tighter social-distancing measures are just beginning to manifest.
Released Thursday, the latest report from the Financial Accountability Office noted that 500,000 Ontario employees worked no hours while 300,000 worked less than half their usual shift between March 15 and 21.
That’s on top of the record 403,000 net job losses that StatsCan reported last week for the month of March (with the caveat that data does not capture the full picture because of the timeline constraints).
It’s the biggest monthly jobs loss in provincial history.
“The numbers are really awful, but the situation is completely unique,” budget watchdog Peter Weltman said in an interview.
Weltman predicts it “will likely get worse in April,” reflecting tougher ongoing restrictions, and while it’s early days yet, he doesn’t see a return to normalcy for at least another year.
“We should be able to get back out of this in a year or two, and without suffering significant structural damage to the economy, but it’s too early right now to tell if that will happen.”
Recovery will rely heavily on whether government relief efforts, such as the federal emergency wage subsidy, are enough to cushion the economic shock from so many job losses in such a short span of time; employment loss was a slower burn in past recessions.
Weltman characterized this as a “government-mandated recession” that will require “government-mandated recovery.”
Mini-budget projections ‘dead on arrival’
The FAO will start to assess the province’s response, as well as the mini-budget, in its next report mid-May.
“It was dead on arrival. The forecast was way off,” Weltman said of the PC’s spring fiscal outlook tailored to COVID-19, which came instead of a full-fledged budget.
It projected an arguably too-rosy one-percentage-point increase in the annual unemployment rate (to 6.6 per cent) and pegged GDP growth at nil.
In contrast, the Conference Board of Canada projects the province’s economy will shrink by 3.2 per cent, thanks to the shutdown of the service economy and auto parts manufacturing.
The spike in unemployment has already overshot the PC’s (annual) projection — March’s two-percentage-point jump to 7.6 per cent is the highest single-month increase ever recorded.
“Certainly the environment is rapidly changing,” Weltman explained.
The budget watchdog’s upcoming analysis will be “very different” from the March outlook, Weltman teased. It will weigh different recovery scenarios and include longer-term projections. (The PC’s outlook only covered this fiscal year and projected a $20.5-billion budget shortfall.)
Premier Doug Ford previously called March’s StatsCan report a “punch in the gut.” With the pandemic situation moving at an unheard-of clip, Ford has acknowledged mini-budget projections will have to be adjusted accordingly, but he isn’t saying by how much just yet.
“I wish I had a crystal ball,” Ford said after the job numbers were released.
Finance Minister Rod Phillips has convened a cabinet crew with relevant portfolios to map out economic recovery efforts. The minister’s office did not respond to Queen’s Park Today’s request for comment.