A worker smooths concrete at a construction site in Toronto on January 16, 2020. THE CANADIAN PRESS/Cole Burston

OTTAWA - Canada's economy added more than 300,000 jobs in March, once again outpacing expectations and putting the labour market on track to recoup all that was lost one year ago even before a federal budget rolls out with its promise of billions in stimulus spending.

In all, Statistics Canada said the economy added 303,000 jobs in March as restrictions rolled back, paving the way for more workers to return to high-touch sectors hardest hit by public health restrictions.

Retail gained 95,000 jobs to fully recoup losses sustained in January lockdowns, while employment jumped 21,000 in the accommodation and food services sector.

Notable gains were also seen in health care, construction and educational services. That last gain was partially a result of Ontario, which led employment gains overall, moving its March break for schools to next week in a bid to slow the spread of COVID-19.

The March increase puts overall employment 296,000 shy of the pre-COVID level in February 2020, a gap of 1.5 per cent. The unemployment rate was 7.5 per cent, down from 8.2 per cent in February, hauling the rate to a pandemic-era low.

Statistics Canada said the unemployment rate would have been 9.7 per cent in March had it included in calculations Canadians who wanted to work but didn't search for a job.

With March's gains, there are now as many sectors with employment above February 2020 levels as those still below, wrote BMO chief economist Douglas Porter, adding that total employment outside of hotels and restaurants was at an all-time high.

However, the momentum won't carry into April as restrictions tighten, just as has happened throughout the pandemic, said Brendon Bernard, an economist with job-posting site Indeed.

"It's going to continue as long as the pandemic is with us," he said.

"It all goes back to the vaccine — getting the crisis under control. That's what it takes for this recovery to really be on track firmly and not fall off the rails."

Closing the remaining gap by year's end, as the parliamentary budget officer suggested is possible, won't be as small or simple a task as the 1.5-per-cent gap suggests, said Mikal Skuterud, a labour economist from the University of Waterloo.

The gap is made up of workers who are in the hardest hit sectors and will have the longest road to recovery. Food services, for instance, still sits 24.4 per cent, or 298,000 jobs, below pre-pandemic levels — the widest gap of any sector.

Skuterud said for all the economic policy that could be rolled out, the labour market rests on managing the health crisis: "It's entirely a race between the vaccine … and the virus."

Back in the fall, the Liberals promised to create one million jobs, and the prime minister said Friday that the April 19 budget would outline plans to create more jobs.

The government needs to rethink how much to spend from a promised $70 billion to $100 billion in stimulus over three years, and what to spend it on in light of the improved labour market and economy, said Robert Asselin, senior vice-president policy at the Business Council of Canada.

"If you don't build productive capacity … then you really are not solving much," said Asselin, a former budget adviser to the Liberals

"If they are focusing on really short-term stuff, that's this year or next year just to boost demand in the economy, I think, if anything, it will just create more problems than it will solve."

Prime Minister Justin Trudeau said Friday he wanted to meet one-on-one with opposition party leaders early next week to talk about the budget, which if not approved could topple the minority government and plunge the country into a federal election.

On the job numbers for March, Trudeau called them encouraging, but said there are still Canadians who are jobless or working reduced hours.

Statistics Canada said the number of people unemployed, despite sharp reductions over February and March stood at 1.5 million, or 371,000 more than the February 2020 level.

As well, the number of long-term unemployed, meaning they have been out of work for six months or more, was 286,000 above pre-pandemic levels, or almost 160 per cent more than in February 2020.

Hassan Yussuff, president of the Canadian Labour Council, said he expected the government to outline a skills-training plan in the budget to help workers find jobs, and others who may be displaced in the coming years.

"There is going to be continuous need for us to have a resilient workforce in this country that can adapt to changes happening in the economy," he said, pointing to energy workers who would be affected by the Liberals' promise to green the economy.

"The only way that's going to happen is if you give people opportunity to keep renewing, and improving their skills on a continuous basis."

This report by The Canadian Press was first published April 9, 2021.

News from © The Canadian Press, 2021