VICTORIA -- Victoria is facing severe economic challenges during the COVID-19 pandemic, as unemployment rates climbed to dramatic levels in June.

According to Statistics Canada, Victoria’s unemployment rate climbed to 11 per cent in June, up from 10.1 per cent in May. Around this time last year, Victoria’s unemployment rate was roughly four per cent, according to the South Island Prosperity Partnership (SIPP).

Previously, the city’s highest unemployment rate was seen during the Great Depression, when unemployment levels were near 20 per cent in 1931 and 1932.

In recent memory, Victoria’s highest unemployment rate occurred in 2008, when unemployment levels reached roughly 7.4 per cent as a result of a national financial crisis and recession, says the SIPP.

While B.C.’s overall unemployment rate went down for the first time in months in June, from 13.4 per cent to 13 per cent, Victoria was among four cities where unemployment continued to rise.

South Island Prosperity PartnershipThe South Island Prosperity Partnership believes that one reason why Victoria’s unemployment rate is rising is because tourism-related sectors continue to be hamstrung by the global pandemic.

"Of particular concern are the tourism-related indicators since our region has the third-most tourism-related jobs out of Canada's metro regions," said Dallas Gislason, SIPP director of economic development, in a release Friday.

On Friday, B.C. Finance Minister Carole James echoed this assessment when speaking at a news conference.

"You would, by now in Vancouver and in Victoria, be seeing cruise ships coming in, seeing passengers unload, be seeing people through the downtown core," said James. "And that's just not possible."

The SIPP says that the loss of this year’s summer tourism season in Victoria will likely lead to a “prolonged recession” in the region.

However, nearly one month after Statics Canada recorded its most recent monthly labour force survey, the SIPP says that Victoria could see a reduction in unemployment as people return to work amid Phase 3 of B.C.’s restart plan.

Phase 3, which began on June 24, included the reopening of more economic industries. James says that around this time, more members of the hospitality and service industry began returning to work.

"In fact, the accommodation and food services sector accounts for 50 per cent of this month's gain in jobs," said James.

Moving forward, as B.C. continues to reopen parts of its economy, James stresses that health and safety will continue to be a priority in the province.

"We need to stay focused on our restart plan, doing it in a responsible way so we can see more and more businesses reopen," she said Friday.

With files from CTV Vancouver’s Alyse Kotyk