Maple News reports that the economic impact of the COVID-19 pandemic has resulted in a surge in long-term unemployment across Canada, exceeding levels seen during the 2008 financial crisis.
By December 2020, approximately 493,000 Canadians were considered long-term unemployed—defined as being out of work for 27 weeks or longer. This figure represented nearly one-third of the country’s total unemployed population at the time. The rise began in the fall of 2020, following the massive job losses from March and April when nationwide shutdowns were implemented to stop the spread of the virus.
The subsequent months saw a slow recovery, but new waves of infections during the winter led to renewed lockdowns and stay-at-home orders in several provinces. These rising restrictions stalled economic momentum and, for the first time since April, employment in Canada declined in December 2020.
According to Maple News, by the end of 2020, around 1.1 million Canadians were still heavily affected by the pandemic’s impact on employment—either through job losses or reduced working hours.
This prolonged disruption reshaped economic behavior for businesses and individuals alike. As financial uncertainty grew, many Canadians curtailed their spending, while businesses delayed investment plans or expansion. Those that could operate digitally moved employees to remote work setups.
However, not all businesses transitioned smoothly. Many continued to face operational hurdles with repeated closures and shifting regulations, leading to layoffs and deepening financial strain. The Canadian Survey on Business Conditions identified these ongoing challenges as key pressure points for employers attempting to navigate through pandemic-era restrictions.
The scope and scale of long-term unemployment during COVID-19 pose risks for economic recovery. Prolonged joblessness can erode household income, reduce consumer spending, and create structural challenges in the labor market, particularly for vulnerable groups including immigrants and low-income workers.
As Canada moves toward economic recovery with increased vaccination and reopening plans, attention is shifting to policies that can counter this long-term unemployment trend—particularly job training programs, inclusive hiring strategies, and sector-specific recovery efforts.