The Bank of Canada says companies are hedging hiring plans and wage growth expectations in the coming months over heightened uncertainty from the COVID-19 pandemic.
The central bank’s business outlook survey finds hiring intentions remain below their historical averages, suggesting modest hiring plans even as the overall outlook on employment edges up.
Almost one-third of businesses told the bank they expect their workforce numbers to remain below pre-pandemic levels for at least the next 12 months, or to never fully recover.
The survey also finds that wage growth is widely expected to slow over the next year, mostly a result of the pandemic and ongoing uncertainty, with some firms reporting a wage freeze.
The bank also says that nearly half of firms surveyed used the federal wage subsidy program to avoid layoffs or quickly refill positions.
About 100 firms took part in the bank’s regular survey out this morning, but did so between late August and mid-September when COVID-19 case counts were still low.