The world may be witnessing the beginning of the end of the global COVID-19 health and economic crisis. After unprecedentedly quick development timelines, a handful of promising vaccines have emerged in North America and Europe, and in Russia and China. Efficacy ranges from 70% (Oxford-AstraZeneca) to over 90% (Pfizer and Moderna), but in all cases, sufficient inoculation would achieve herd immunity.
Immediate success is not guaranteed, and challenges persist. In most countries, the rate of vaccination is not yet reaching targets. Various observers have ascribed the blame on insufficient vaccine supply, lack of trained staff, regulatory roadblocks, or ineffective distribution and logistical plans (which must accommodate vaccine freezers). As shown in Figure 1 below, in Canada, as of January 11th, about 20,000–40,000 vaccinations were being performed per day. To vaccine roughly 50% of the population within 6 months, this rate will need to rise to about 100,000 per day.
Photo by Nikita Ignatev on Unsplash
Figure 1: Daily COVID-19 Vaccinations Doses
Figure 2 below reveals that, as of January 10th, Canada had vaccinated about 0.85% of the total population.
Figure 2: COVID-19 Vaccinations per 100 People
However, as shown in Figure 3, the per-capita vaccination rate is increasing steadily.
Figure 3: Covid-19 Vaccinations per 100 People, Time-Series
In the early days of 2021, several European countries have entered fresh lockdowns due to more contagious strains of the virus discovered in the United Kingdom and South Africa. Theoretically, the virus can mutate further, creating new strains and potentially evolving resistance to the vaccine. However, most experts have argued that this can be resolved via modifications to existing vaccines, and will not likely require the development of an entirely new vaccine. Like seasonal influenza, annual updates to the COVID-19 vaccine may be required.
Health impacts have varied dramatically depending on the location. The surge in the total mortality rate was much steeper in the United States than Canada, as shown in the Figure 4. Values for 2020 are estimates by ICTC based on existing population and mortality data.
Figure 4: Total Crude Morality Rate, Canada vs USA
Figures 5 and 6 show that in Canada in April and May, COVID-19 briefly surpassed 15% of official deaths, but have tapered significantly since.
Figure 5: Official Causes of Death in Canada in 2020, Percent
As seen in Figure 6, COVID-19 is forecast to be the cause of 4.7% of total deaths in 2020, although this number may change as deaths are recategorized.
Figure 6: Total Canadian Death Percentages, 2020
Human mortality is surely the most meaningful adverse consequence of the pandemic, but economic impacts have also been unprecedented. Government-mandated lockdowns have led to the most rapid contraction and recovery in employment and GDP ever recorded. Figure 7 shows that employment plunged from 18.9 million in February 2020 to 16 million in April, and then recovered rapidly. As of December 2020, employment remains modestly below pre-crisis levels.
Figure 7: Canadian Unadjusted Employment, Pre- and Post-COVID
Figure 8 shows that employment impacts have varied considerably by sector. In December, employment in the ICT sector was 9.7% above the value of January 2020, while the broader Digital Economy was 7.5% above. In contrast, employment in the accommodation and food services sector was down by 24.4% and the general economy was down by 1.8%.
Figure 8: Percent Change in Employment over 2020 by Industry
The crisis has also had differential impacts by gender and age. Figure 9 shows that throughout the pandemic, female employment has been more adversely affected than male employment. As of December, male employment was 2.6% below the January level, and female employment was 3.8% down.
Figure 9: Percent Change in Employment over 2020 by Sex
Figure 10 shows that the crisis had differential impacts on employment by age as well. The steepest declines was among the youngest workers (those aged 24 and younger). Middle-aged workers were the most robust to the shock, while those aged 65 and over may have taken the opportunity to retire.
Figure 10: Percent Change in Employment over 2020 by Age
The latest data for GDP is for October 2020. At this point, Canadian GDP was 3.5% below the 2019 value. Despite a sharp recovery following the lifting of the first lockdowns in the late spring, GDP recovery appeared to be tapering off in the fall.
Figure 11: Gross Domestic Product, Pre- and Post-COVID
Although 2020 has been a year of challenges and sacrifice the world around, it was also a year of unprecedented innovation, as seen by the development of several viable vaccines. Some additional good news can be found by examining the digital economy. GDP in the ICT sector has surged well-above pre-pandemic levels. As shown in Figure 12, ICT-sector GDP for October 2020 was about 3% above the value for 2019.
Figure 12: GDP in ICT Sector, Pre- and Post-COVID
Employment growth in core digital occupations over 2020 has been mixed, but fared considerably better than employment across the general economy. As shown in Figure 13, most core ICT occupations saw employment rise above pre-crisis levels by December 2020.
Figure 13: Percent Employment Change over 2020 by Core Digital NOC
Finally, Figure 14 reveals perhaps the most intriguing and troubling aspect of this crisis. Almost all the job loss has been concentrated among the lowest-wage-earning segments of Canadian society. In fact, employment in the top two thirds of wage earners is actually up slightly in December 2020 from January. This suggests that the most economically vulnerable segments of Canadian society have suffered the most labour market disruption in 2020.
Figure 14: Percent Employment Change by Thirds of Wage Earners
Digital economy occupations are more resilient to the crisis of 2020 as they can easily be performed remotely. Meanwhile, demand for digital products and services that these workers create has surged. These jobs also tend to pay higher wages, which drives part of the disparity shown in Figure 14. Going forward, policy discussions must occur regarding how to help transition workers in disrupted traditional industries towards the more robust digital economy roles.
The year 2020 has brought obstacles, lessons, and a radical shift in human behavior. As of early 2021, Canada is making promising — though as of yet insufficiently rapid — progress inoculating its population. Second, after an unprecedentedly steep decline, followed by an equivalently steep recovery, Canada’s economy remains modestly below pre-crisis levels. While the recovery appears to be tapering off, digital sectors and occupations within the economy are mostly at or above pre-crisis levels, and have proven themselves more resilient than all other sectors. The greatest labour market disruption occurred among workers earning the lowest wages prior to the pandemic.
The Digital Think Tank by ICTC will continue to monitor and report on these developments as they occur. ICTC’s second Outlook report, a follow-up to the The Digital-Led New Normal (released summer 2020), will examine the economic and labour market impacts of COVID-19 on the Canadian digital economy. The updated report will be released in late summer 2021.