Canadian Occupational Projection System (COPS)

(NAICS 6241; 6242; 6243; 6244)

This industry comprises establishments primarily engaged in providing social assistance such as counselling, welfare, youth protection, community housing, vocational rehabilitation and childcare. It is composed of four segments: individual and family services, which include child and youth services and services for the elderly and persons with disabilities; community food and housing, and emergency and other relief services; vocational rehabilitation services, such as job counselling, job training and work experience to unemployed or underemployed persons and persons with disabilities; and child day-care services, including pre-kindergarten educational programs. Individual and family services along with child day-care services are the two largest segments of the industry, accounting for 53% and 39% of employment respectively in 2021. The remaining share of employment (8%) is evenly split between the other two segments. The 4-digit NAICS breakdown for GDP is not available. Overall, the industry employed 514,200 workers in 2021, with a workforce primarily composed of women (85%) and characterized by a significant concentration of part-time workers (22%). Employment is distributed almost proportionately to population: 32% in Ontario, 29% in Quebec, 14% in British Columbia, 11% in Alberta, and 14% in the remaining provinces. Key occupations (4-digit NOC) include:

• Early childhood educators and assistants (4214)
• Social and community service workers (4212)
• Home support workers, housekeepers and related occupations (4412)
• Social workers (4152)
• Family, marriage and other related counsellors (4153)
• Managers in social, community and correctional services (0423)
• Social policy researchers, consultants and program officers (4164)
• Cooks (6322)
• Registered nurses and registered psychiatric nurses (3012)
• Employment counsellors (4156)
• Instructors of persons with disabilities (4215)

Social assistance is a central component of Canada’s welfare state. It comprises a set of need-based, last-resort income programs for Canadians who require support for a variety of reasons, including financial difficulties during bad economic times. As a result, many components of social assistance are inversely related to negative fluctuations in Canada’s economy. Demographic trends also have a significant impact on demand for social assistance, particularly for services provided to child, youth and the elderly. During and shortly after the recession of 2008-2009, the output grew at an accelerating pace as the slump in the economy forced many Canadians to seek welfare in response to the rise in unemployment, while solid growth in the number of children aged 1 to 4 increased the demand for child day-care services. The output advanced at a more moderate pace from 2011 to 2015, reflecting better economic conditions and much weaker growth in early childhood population, before accelerating significantly from 2016 to 2019. During those four years, higher unemployment in the oil-producing provinces (following the oil price shock) boosted demand for welfare and job counselling services, while faster growth in children and youth population (aged 5 to 17) stimulated demand for individual and family services. Greater awareness regarding mental illness, more frequent family breakups, and the gradual increase in the dependency ratio resulting from population aging also contributed to raise demand for various social assistance services over the past decade or so.

However, the industry’s output fell by 7.1% in 2020, as many child day-care centers and other establishments providing social assistance were temporarily closed during the first year of the COVID-19 pandemic, while displaced workers and low-income individuals were able to use the Canada Emergency Response Benefit (CERB) as an alternative to traditional forms of assistance. As parents returned to work, children returned to day-care, and individuals using CERB shifted to requiring different forms of support, the output in social assistance strongly rebounded in 2021 (+6.3%), recovering a large part of its losses. The resulting pace of growth in the industry’s real GDP averaged 1.7% annually over the entire period 2012-2021, compared to a more moderate pace of 0.7% for employment. After peaking in 2015, employment declined significantly in 2016 and remained essentially unchanged in 2017-2018, reflecting lower labour demand in child day-care services, mostly in Quebec and Ontario, as a result of program reforms, the stagnation in early childhood population, and the decision by the Ontario government to introduce full-time kindergarten for four- and five-years old. Following a notable rebound in 2019, the industry’s employment collapsed in 2020 (-9.7%) in response to the strong decline in output, before recouping most of its losses in 2021 (+8.2%). The significant gap observed between output and employment growth over the past decade reflected an upward trend in productivity, which increased by 1.0% annually, recording all the gains from 2016 to 2021. Fiscal constraints forced many provincial governments to restrain labour costs in social programs and implement innovative approaches to increase the efficiency of delivering services, resulting in output growth exceeding employment growth, particularly after 2015.

Over the projection period, output growth in social assistance is projected to accelerate marginally relative to the past decade, as the industry continues to recover from the pandemic and keeps expanding. Despite low fertility rates, demand for child day-care services is expected to increase significantly in the coming years, stimulated by the implementation of the Canada-wide early learning and childcare system which aims to reduce the average fee to 10$ per day for children under the age of five in all provinces and territories by 2026 (except in Quebec where a similar program already exists). Strong inflation and higher mortgage rates are also expected to push demand for social assistance, as rising food prices and lower housing affordability may drive more people to use community food and housing services, particularly in the short to medium term. Moreover, additional growth in population aged 5 to 17 is projected to increase demand for individual and family services, while further increases in the dependency ratio resulting from an aging population is expected to increase demand for social services provided to the elderly. Massive retirements of baby-boomers from the labour market are also projected to restrain growth in disposable income over the longer term, and those who have not managed to save enough to fund their retirement years may require financial support.

On average, real GDP in social assistance is projected to increase at an annual rate of 1.9% over the period 2022-2031. The slight acceleration in output growth relative to the previous decade and weaker gains in productivity are expected to lead to faster growth in employment, averaging 1.4% per year, with significant gains in the first half of the projection period. Overall, productivity is expected to increase at a slower pace of 0.5% annually, primarily reflecting a steep decline in 2022 (post-pandemic adjustments) and the fact that output growth will be largely driven by the highly labour-intensive segment of child day-care services during the next decade. That said, additional pressures on public finances will continue to support the need to increase productivity. Indeed, the gradual slowdown in Canada’s labour force growth is expected to constrain employment and real GDP growth across the country, which in turn will reduce growth in government revenues, thus limiting the capacity of governments to increase expenditures, including spending on social services. In such a context, the industry is expected to keep developing innovative approaches and implement new labour-saving ways of delivering services, leading to additional growth in productivity.

Real GDP and Employment Growth Rates in Social Assistance

Sources: Statistics Canada (historical) and ESDC 2022 COPS industrial projections.

Sources: Statistics Canada (historical) and ESDC 2022 COPS industrial projections.