Precarious Employment in Canada: An Overview of the Situation

Dominique Fleury
Aboriginal Affairs and Social Development

Recent studies have raised questions about the quality of jobs in Canada. These studies have also highlighted concerns regarding the impact of precarious employment on the well-being of workers and the general population.

In a report published in 2015, the Organisation for Economic Co-operation and Development (OECD) noted a net increase in non-standard jobs in a number of countries, which may have contributed to rising inequality in recent decades. Moreover, the OECD stated that it is not only the quantity of jobs that fosters equality of opportunity and economic growth, but their quality as well.

In a special report released in March 2015, TD Economics stated that precarious employment is a serious issue in the Canadian economy. While precarious employment provides flexibility to employers, enabling them to more easily adjust to economic shocks, the report mentioned that it can also harm the economy. The lack of income security associated with precarious work reduces consumer confidence, leading them to spend less, which in turn reduces business profits and investments, thereby depriving governments of revenue.

However, the TD Economics analysts pointed to gaps in our knowledge of precarious employment owing to problems such as the lack of a common definition for the phenomenon and data constraints.

Defining precarious employment

According to the International Labour Organization, precarious employment generally refers to a lack or inadequacy of rights and protection at work. This definition can apply to informal work, but also to several types of formal work, including subcontracting, temporary contracts, interim work, self-employment and involuntary part-time work.

These types of formal employment are considered more precarious, because they are associated with reduced financial security and stability stemming from lower wages on average, less access to benefits such as private pension plans and complementary health insurance, as well as greater uncertainty about future employment income. These types of jobs are also associated with poorer physical and mental health outcomes. 

It is worth noting that studies on precarious employment also often refer to non-standard or atypical employment, that is, work other than full-time permanent paid work, as well as to vulnerable workers, which are workers in precarious jobs.

Incidence of self-employment, involuntary part-time work and temporary work

According to OECD data, the vast majority (70.3%) of Canadian workers were in full-time permanent employment in 2013, a proportion slightly above the average in OECD countries (66.8%).

Still, in 2014, the most recent year for which Statistics Canada has released annual data on employment, a non-negligible proportion of working Canadians were self-employed (15.3%), involuntarily employed part time (5.3%) or in a temporary job (11.3%).

Recent trends

Figure 1 shows the trends in self-employment, involuntary part-time work and temporary work since the 2008–2009 recession, as well as over the period of growth preceding this recession (specifically, from 1997 to 2007).

Figure 1 – Percentage of Self-Employed, Involuntary Part-Time and Temporary Workers Among Employed Persons 15 Years of Age and Over, Canada, 1997–2014

Graph showing percentage of Self-Employed, Involuntary Part-Time and Temporary Workers Among Employed Persons 15 Years of Age and Over, Canada, 1997–2014

Notes:     Based on Statistics Canada definitions:
  • Self-employed workers consist of all independent workers, with or without paid help, whether they are owners of an incorporated business or not.
  • Involuntary part-time workers are individuals who work less than 30 hours per week at their main job because of poor business conditions or because they could not find work with 30 or more hours.
  • Temporary workers hold a paid position with a predetermined end date. These jobs include seasonal jobs, temporary jobs (that is, term or contract jobs, including work done through a temporary help agency), casual jobs and other temporary work. Note that it is impossible to accurately identify temporary foreign workers using data from the Labour Force Survey (LFS).
Source:   Figure prepared by the author using data from Statistics Canada, Tables 282-0002, 282-0012, 282-0014, and 282-0080, CANSIM (database), consulted 10 November 2015.

However, the latest trends provide only a partial picture of the evolution of precarious employment in Canada. This is notably because other dimensions of precarious employment could be taken into account (e.g., low wages), but also because these types of jobs may overlap (e.g., a self-employed worker may also be involuntarily working part time), and because these trends sometimes run in opposite directions.

Recognizing these limitations, TD Economics chose to develop a “Precarious Employment Index” to study the general trend in precarious employment. This index shows that, despite a declining trend since the end of the 2008–2009 recession, precarious employment remained higher in 2014 than in 2007, just before the recession. However, the level in 2014 was roughly the same as that observed in the mid-2000s and considerably lower than that seen in the 1990s.

Groups most likely to hold precarious jobs 

Statistics Canada data reveal that some groups are more likely to hold precarious jobs than others (Table 1). Year in and year out, the proportion of involuntary part-time and temporary workers is higher among youth (aged 15 to 24) and women. Yet older workers (aged 55 and over) and men are most likely to be self-employed. In addition, a study by the Law Commission of Ontario (LCO) concluded that not only are youth and women overrepresented among precarious workers, but so too are racialized persons, immigrants, Aboriginal persons, persons with disabilities and older adults.

Table 1 – Percentage of Self-Employed, Involuntary Part-Time and Temporary Workers Among Employed Persons 15 Years and Over, By Age Group and Sex, Canada, 1997, 2007 and 2014

Groups
Self-Employed (%)
Involuntary Part-Time (%)
Temporary (%)
1997 2007 2014 1997 2007 2014 1997 2007 2014
All, 15+ 17.1 15.5 15.3 5.9 4.0 5.3 9.4 11.0 11.3
15–24 7.5 3.4 3.1 11.1 6.8 9.9 23.2 27.9 29.9
25–54 16.9 15.5 14.5 5.2 3.5 4.5 7.1 7.8 8.4
55+ 33.1 28.1 26.8 3.7 3.5 4.4 5.7 8.3 8.1
Men 20.3 19.1 18.6 3.6 2.6 3.6 8.7 10.0 10.5
Women 13.2 11.4 11.7 8.7 5.6 7.1 10.1 12.0 12.2
Source:   Table prepared by the author using data from Statistics Canada, Tables 282-0002, 282-0012, 282-0014, and 282-0080, CANSIM (database), consulted 10 November 2015, as well as using a special table on employment by class of worker and age group provided by Statistics Canada on 19 November 2015.

 

Government actions

Governments can help make workers less vulnerable. In fact, some recent federal government initiatives have aimed to do so. For example, the government has implemented new measures to give the self-employed access to special Employment Insurance benefits and enable private-sector employees to participate in group pension plans.

In the same vein, the LCO’s Vulnerable Workers Advisory Group was established in 2010. Its final report, published in 2013, contained 47 recommendations for changes to legislation, policies and programs concerning job protection, health, safety, training and education, some of which concerned federal legislation, such as those respecting temporary foreign workers.

In recent years, the federal government has made substantial changes to the Temporary Foreign Worker Program. In July 2015, the federal government implemented new measures with the objective of better protecting some potentially vulnerable foreign workers, such as those in low-wage positions.

Related resources

Poverty and Employment Precarity in Southern Ontario (PEPSO), McMaster University and the United Way – Toronto, It’s More than Poverty: Employment Precarity and Household Well-being, February 2013.

Leah F. Vosko, Nancy Zuchewich and Cynthia Cranford, Precarious jobs: A new typology of employment, Statistics Canada, Perspectives on Labour and Income – The online edition, Vol. 4, No. 10, October 2003.

Elgersma, Sandra. Temporary Foreign Workers, Publication No. 2014-79-E, Ottawa, Parliamentary Information and Research Service, Library of Parliament, 1 December 2014.