A report released this week by the Financial Accountability Office (FAO) in Ontario states that the labour market in the province rebounded to pre-COVID levels in 2021, though recovery remains uneven.

In 2021, the province added 344,800 jobs and the unemployment rate fell to 8% from 9.6% in 2020 (though it’s still above the 2019 unemployment rate of 5.6%). According to the FAO, it was the largest year-over-year jobs gain on record. But employment among young workers ages 15 to 24 – particularly women – and those in low-wage, customer-facing jobs, such as food service, accommodation, retail, transportation and warehousing, remains below pre-COVID numbers.

“Despite record job vacancies, accommodation and food services had the slowest employment growth since 2019,” the report stated. “This could partly reflect workers switching to other industries amid health concerns and repeated pandemic-related restrictions that have affected business operations.”

The FAO says employment among young workers and people in low-wage, customer-facing jobs such as in food service and retail remains below 2019 levels, as does the labour market in 11 of Ontario's 16 major cities https://t.co/rkcBJrUaAo

— NEWSTALK1010 (@NEWSTALK1010) February 23, 2022

A few of the industries that saw the largest job gains in 2021 were professional, scientific and technical services; healthcare; manufacturing; and wholesale and retail trade as restrictions were gradually lifted.

Approximately 145,700 jobs were lost earlier this year due to re-implementation of restrictions in the face of the omicron variant, as the unemployment rate rose from 6.1% in December to u7.3% in January. However, analysts expect those numbers to continue to improve as Ontario lifts more COVID restrictions.

The government has announced that it will discontinue its proof of vaccination program on March 1 and has already lifted capacity limits on restaurants, bars and gyms. “Given how well Ontario has done in the omicron wave, we are able to fast-track our reopening plan,” Ontario Premier Doug Ford said last week.

The report also found that the labour market remained slow in 11 of Ontario’s 16 major cities. While London, Peterborough and Guelph have experienced the healthiest recovery, Belleville, Brantford and Greater Sudbury have seen the slowest. The rate of long-term unemployment (no job for six months or more) rose to the highest it’s been in 30 years. “Long-term detachment from the labour market can result in skill erosion and make reemployment more difficult for job-searchers,” the report stated. “This could also slow the overall recovery in the labour market.”

The FAO report comes a week after new Statistics Canada data shows that inflation in the Great White North hit a 30-year high last month, putting pressure on the Bank of Canada to raise interest rates. The consumer price index rose to 5.1% from 4.8% in December, which marked the 10^th consecutive month that inflation surpassed the Bank of Canada’s target rate of 1% to 3%. Canadians across the country are seeing significant spikes in costs for groceries, energy and housing. Shelter costs increased 6.2% from January 2021, the fastest since February 1990, and food prices increased 5.7%.

The Consumer Price Index (CPI) rose 5.1% on a year-over-year basis in January, up from a 4.8% gain in December. On a seasonally adjusted monthly basis, the #CPI rose 0.6% in January. More info: https://t.co/cpBxquM82f . #CdnEcon #Inflation pic.twitter.com/vZkUfXpAtD

— Statistics Canada (@StatCan_eng) February 16, 2022

As Canada looks to the next phase beyond COVID, suppliers and distributors say they continue to contend with irregular recovery and uncertainty after almost two years of strict lockdown measures and continuing rises in inflation.

“It’s still uneven depending on the event and industry,” says Mark Jackson, president of SwagDrop (asi/300621) in Oakville, ON. “Toronto Mayor John Tory says the St. Patrick’s Day Parade, Pride Parade, Canadian National Exhibition and other GTA events are coming back this year. Many of these events have a longer planning cycle, but will contribute to positive growth in Q3 and Q4. Our customers that were active in conferences and shows pre-pandemic are signaling a return to large events this fall, but they’ll still have a hybrid component available for those choosing not to attend in-person.”

Andrew Witkin, president of StickerYou (asi/89791) in Toronto, says consumers are “less nervous” which leads to more bullish promo clients, though inflationary pressures on prices continue to put a damper on full recovery. Witkin says StickerYou’s all-domestic production has helped them to avoid large price increases on products.

“Our order volumes have increased this month compared to December and January when omicron hurt business,” he says. “We definitely saw some customers ordering less or who had ordering gaps during COVID, but when waves would decrease, optimism grew and an increase in demand followed. I think this time is different – there’s a sentiment here that we have to live with COVID and return to normal life with some risk.”