OTTAWA—Close to seven million Canadians have applied for Ottawa’s emergency income program, suggesting one-third of the country’s workforce has been hit by the economic fallout of the pandemic.

The federal government is releasing regular updates on the number of people who have applied for the Canada Emergency Response Benefit (CERB) and the numbers paint a grim picture of the economic fallout of the restrictions that have shut down broad parts of the economy.

As of Sunday, the government had received applications from 6.73 million Canadians and had so far paid out $19.8 billion. There were just over 19 million Canadians employed in February, meaning that more than 30 per cent of the workforce has been disrupted, said David Macdonald, senior economist with the Canadian Centre of Policy Alternatives.

“That’s just mind-boggling,” he said in an interview.

“We have no idea at this point on the scale of this devastation on the labour market. At this point traditional labour force stats just don’t mean anything anymore,” he said.

The benefit is meant to provide speedy financial relief to those who have lost income as a result of the virus. That includes those who have lost jobs as well as those forced to stay home because of illness, quarantine or child care. It pays $500 a week for 16 weeks.

The number of applicants suggest the country is suffering higher unemployment than indicated by the March jobs data released by Statistics Canada. The monthly labour force report revealed that employment fell by more than one million in March and a similar number saw their hours cut.

However, that data only captured one week in March just as the restrictions that closed retail and hospitality outlets set in. The state of the country’s labour market this month will be revealed in early May.

Economists say it will be some time before the true impact on the labour market is known. But they say that the CERB data provides one key telltale of the extensive — and ongoing — disruptions suffered by workers.

Academic Tammy Schirle said the numbers from the first few weeks of the program — one million Canadians applied on the first day alone — provide a sense of the immediate impact of the economic shutdown.

“We know that those were people who were completely pulled out of their jobs … I think that first week gives you the biggest impact of people who were hit hardest,” said Schirle, a professor of economics at the Lazaridis School of Business and Economics at Wilfrid Laurier University.

Initially, the program was aimed at people who had lost two weeks of work and had no income. It has since been expanded to include part-time workers and seasonal workers, making it more difficult to assess the impact of the pandemic on the labour force, she said.

“Things after that get a little murky because we are constantly modifying and expanding this program,” she said.

The massive scale of the workforce disruption also raises questions about how many will return to work as restrictions get lifted.

“The amount that we spent so far on the CERB is what we would normally spend on employment insurance in an entire year. We’ve done that in a matter of a couple of weeks … that’s the magnitude of this impact,” Schirle said.

She worries that those hit hardest at the outset were in precarious work to start with and will have trouble getting their jobs back.

“They were low-wage workers. They were women, many of whom are going to have caregiving responsibilities,” Schirle said. “These are some of the jobs where it’s going to be hard to guarantee that your employer is going to give you a callback.”

While it’s hoped that employers will reopen quickly and call everyone back, a more likely reality is a “slow restart,” Schirle said.

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Macdonald said lingering turmoil, marked by “mass bankruptcies” in the small businesses sector, patchwork restrictions to deal with ongoing, local outbreaks of the virus and a dearth of consumer confidence will slow the recovery and with it, the pace people returning to work.

“This is a new world in terms of employment and a lot of these jobs aren’t going to come back,” he said.

He predicts a “massive contraction” in consumer spending. “A lot of people have made a lot less in the last month … those who haven’t made less are pretty scared to spend more,” Macdonald said.

“The Canadian economy functions on the continued circulation of cash in the economy and when you dam that up for a while, some of that will return but not all of that. That’s the real danger,” he said.

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