HEAVY TOLL ON TOURISM

Hospitality, food service sectors suffer losses

As anticipated due to the COVID-19 pandemic, Windsor’s unemployment rate closed in on historic levels in April as it reached 12.9 per cent of the labour force, according to the latest numbers released Friday by Statistics Canada.

There were 21,800 people in the Windsor area recorded as being unemployed in the latest Statscan survey. But another 3,600 people were said to have dropped out of the labour force over the past month, leaving the number of unemployed believed to be even higher.

Across Canada, the nation lost almost two million jobs overall last month — bringing total losses since February to three million. More than one-quarter of Canadian workers reported living in households that had “difficulty meeting financial obligations,” the federal agency said.

Nationally, the hospitality and food services sector has been hit the hardest with nearly half of those jobs disappearing since February. Since that time, the number of hours worked in the sector decreased by 63.8 per cent, Statcan said.

A recent regional survey showed operators of close to one in 10 businesses in the hospitality sector believe they may have to close permanently, said Gordon Orr, CEO of Tourism Windsor Essex Pelee Island.

“The longer this goes on, there will be a new reality,” he said.

“The landscape will change as to who will still be standing. Then what protocols or safety measures will need to be in place for each business going forward?

“The cost of doing business will increase because you will need more staff to clean and your capacity will be fewer tables. Nobody is going to be able to flip a switch and return right back (to before the virus). It’s very difficult to sugar coat this in any way.”

He said the sector has resilience, citing struggles through previous recessions, SARS and the Sept. 11 terrorist attacks.

“People involved love the industry,” Orr said. “They have real passion and put their heart and soul into it. They will prevail and see the other side. What that looks like will be different. The sooner the pandemic is resolved, the quicker they can stabilize and right the ship.”

Also hit hard is the wholesale and retail sector which has lost 20 per cent of its jobs nationally over the past two months, Statscan said.

The big economic question for everyone is whether the fate of employment locally is simply travelling through a storm due to the pandemic or headed toward a more dire long-term downturn.

“It is dependent on the sector, but everybody is concerned to some level,” said Stephen Mackenzie, CEO for the Windsoressex County Development Corp. and chairman of the COVID-19 task force established by the agency. “Some sectors will be quicker to rebound than others.”

As some reopening of businesses starts throughout this month — locally and across Ontario — Mackenzie doesn’t believe there will be much change in the unemployment over the next 30 days.

But he said Statcan employment figures for June will be the “real measure that will say which way we are going.”

“It really depends on the type of business people are in — what’s been temporary (for layoffs) might become permanent,” he said.

“In June, you will have had a full month after there has been some significant reopening.”

But Mackenzie was quick to preface that on how the virus remains in full control of the economy and should a second wave occur that hits workplaces, then all bets are off.

“Any optimism will be squashed if there is a second wave,” he said. “So everything remains a little bit fragile, but there is some optimism some sectors can start to recover.”

As of the week of April 12, the cumulative effect of the COVID -19 economic shutdown — the number of Canadians who were either not employed or working reduced hours — was 5.5 million.

That is more than one-quarter of February’s employment level, Statcan said.

Mackenzie noted it will be one thing for businesses to reopen — notably in the retail or hospitality sector — but another for customers to feel safe enough to return.

“Even if allowed to open, things will be driven by the consumer,” he said. “They will want to feel safe and how long is that going to take? If people are still scared to go out, (economic recovery) is going to take longer.”