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COVID-19 is a public health crisis that has caused serious disruption in our economy. Statistics Canada estimates that more than one million jobs were lost between February and March 2020, with many more experiencing other forms of disruptions in their work. Previous research suggests that larger firms, due to their structural and organizational differences, respond differently to economic shocks than smaller firms. Is this difference reflected in their response to COVID-19?

Our analysis of the March Labour Force Survey (LFS) clearly shows that large firms responded differently. Employees working in larger firms experienced relatively fewer employment losses, demonstrating a larger firm’s ability to withstand the initial impact of the pandemic. 

We also identified a number of notable employment trends within the numbers, some of which include: 

  • Job loss rates experienced by women were disproportionately higher at smaller firms
  • The magnitude of layoffs for younger people were high for all firm sizes – however, larger firms did not experience employment losses among those of core working age. We did see a reduction in the number of workers aged 65+ in all firm sizes, likely reflecting increased levels of retirement.
  • Recent immigrants working in firms with fewer than 20 people saw significantly higher unemployment numbers than non-immigrants.
  • Firm size effects vary by industry, but Retail and Food and Accommodation industries saw negative changes in employment across all firm sizes.
  • Employment changes across businesses in major metropolitan areas vary because of differences in the timing of closures. However, it is clear that small businesses were impacted the most.

“Without establishing specific supports for these large firms, employment conditions may become more bleak in the coming months.”

Our analysis indicates that larger firms can better absorb the economic shock, at least for now. Without establishing specific supports for these large firms, employment conditions may become more bleak in the coming months. Such action will be crucial in ensuring the recovery process is as painless as possible. At the same time, a different set of policies must be put in place to support small businesses to ensure that the entrepreneurship ecosystem is not irreparably damaged in the long term. This is true not just for the short term, but for the duration of the recovery process.

Recent public health efforts have proved successful in flattening the curve of COVID-19 in Canada. However, the pandemic and the associated economic crisis are likely far from over. The March Labour Force Survey measured the beginning phases of the economic disruptions and we will be closely monitoring subsequent data releases to update this research. This will improve our understanding of how the employment landscape will be changing for the foreseeable future across Canada.

Our joblessness memo, published on May 7th, 2020, includes all these insights and more. We will be closely watching the April Labour Force numbers – due to be released tomorrow – and look forward to publishing an update to this piece.

Learn more in our complete analysis: