Canada lost a record-breaking 2 million jobs in April while the unemployment rate surged and Ottawa said it was extending a wage subsidy program that helps firms deal with coronavirus shutdowns.
Although the numbers were not as bad as markets had feared, Statistics Canada said they did not capture the 1.1 million people who had temporarily lost their jobs and who expected to return to work once restrictions were relaxed.
Had these people been counted, the April unemployment rate would have been a record 17.8% rather than 13%.
“These numbers are and should be profoundly worrying to all Canadians. Our country is going through a very, very trying economic time,” said Deputy Prime Minister Chrystia Freeland.
Canada had already lost a million jobs in March as the crisis intensified. As of May 5, more than 7.5 million Canadians had applied for some form of federal employment aid.
Prime Minister Justin Trudeau said Ottawa would extend an emergency wage subsidy program beyond June to “help kick-start our economic reopening and boost jobs”.
Trudeau said more details would be released next week. The program is already budgeted to cost C$73 billion ($52.4 billion), or just under half the entire value of all the measures Ottawa has unveiled.
Analysts in a Reuters poll had forecast a loss of 4 million jobs and an unemployment rate of 18%, up from 7.8% in March.
“The unemployment rate at 13% is not something to be excited about, but it’s a lot better than feared. I would say that the jobs figures probably understate the weakness in the economy,” said Andrew Kelvin, chief Canada strategist at TD Securities.
The Canadian dollar strengthened to a one-week high of C$1.3922 to the U.S. dollar, or 71.83 U.S. cents.
The April employment data was leaked ahead of its 8:30 a.m. ET (1230 GMT) release. Finance Minister Bill Morneau said the leak was unacceptable.
Most non-essential businesses have been shut since mid-March but in recent weeks, some of the 10 provinces have started to gradually reopen their economies.
“Almost all (97.0%) of the newly-unemployed were on temporary layoff … indicating that they expected to return to their former employer as the shutdown is relaxed,” Statscan said in a commentary.
The record for the highest unemployment rate since Statscan adopted their current labor force model in January 1976 was the 13.1% seen in December 1982.