Canada experienced a rise in unemployment to 6.9% in April, marking a six-month peak with a loss of 18,000 jobs, according to recent Statistics Canada data. The labor market, facing challenges from U.S. tariffs and trade uncertainty, has shown ongoing weakness.
Despite Canada adding 67,000 jobs since April 2025, a cumulative loss of 112,000 jobs has been recorded since the beginning of this year. CIBC economist Andrew Grantham highlighted the rocky start for the labor market in 2026, with job losses in three out of the four months.
The decline primarily affected full-time positions, witnessing a net loss of 46,700 jobs, partially offset by a gain of 29,000 part-time jobs. The overall drop in employment from January to April also concentrated on full-time work, which decreased by 111,000 jobs, as reported by StatsCan.
Average hourly wages of permanent employees, a key metric for gauging inflation expectations by the Bank of Canada, increased by 4.8% from the previous year. In comparison, the growth rate was 5.1% in March.
The participation rate, indicating the economically active population over 15 years old, rose to 65% in April from 64.9% the previous month, implying more individuals were actively seeking employment. Unemployment rates for core-aged workers (25-54 years old) and youth rose to 6% and 14.3%, respectively.
The goods-producing sector, particularly vulnerable to U.S. tariffs, saw a decline of 26,800 jobs in April, while the services sector, where the majority of Canadians work, added 9,100 jobs. Sectors like health care, social assistance, and business and building also saw job gains.
Despite analysts’ predictions of 15,000 net job gains and an unemployment rate of 6.7%, actual figures deviated. The Bank of Canada’s Monetary Policy Report highlighted indicators suggesting underutilized labor market capacity, despite modest layoffs.
Ongoing uncertainties surrounding the North American free trade deal and the economic impacts of rising prices due to the Iran conflict have compounded the effects of U.S. tariffs on Canada’s economy. Senior economist Brendon Bernard expressed concerns over subdued economic growth, indicating prolonged challenges in the job market for 2026.
