Canada’s Jobs Market Faces Chill: Tariffs Hit Employment & Signal Rate Cut 🚧📉💰

Overall employment changed little in April (+7,400; +0.0%), following a decline in March (-33,000; -0.2%) and virtually no change in February.

Following a decline of 0.2 percentage points in March, the employment rate—the proportion of the population aged 15 and older—fell a further 0.1 percentage points in April. This increased the employment rate to 60.8%, matching a recent low in October 2024.

The employment rate trended down for most of 2023 and 2024, as population growth outpaced employment gains. More recently, it increased for three consecutive months from November 2024 to January 2025, driven by strong employment gains amid slower population growth.

Public sector employment increased by 23,000 (+0.5%) in April, following three consecutive months of little change. This growth was associated with temporary hiring for the federal election.

The number of private-sector employees was little changed in April, following a decline in March (-48,000; -0.3%). Self-employment was little changed for a third consecutive month in April.

The unemployment rate rose 0.2 percentage points to 6.9% in April, following an increase of 0.1 percentage points in March. With these increases, the unemployment rate has returned to its level of November 2024, which was the highest since January 2017 (excluding the years 2020 and 2021, during the COVID-19 pandemic).

The number of unemployed people—those looking for work or on temporary layoff—increased by 39,000 (+2.6%) in April and was up by 189,000 (+13.9%) year over year.

Unemployed people faced more difficulties finding work in April than a year earlier. Among those unemployed in March, 61.0% remained unemployed in April, higher than the corresponding proportion for the same months in 2024 (57.3%) (not seasonally adjusted).

The share of workers being laid off may increase during periods of economic downturn or disruption. Among those employed in March 2025, 0.7% had become unemployed in April due to a layoff. This proportion changed little from the same period in 2024 (0.6%) (not seasonally adjusted).

There were more people in the labour force in April, and the participation rate—the proportion of the population aged 15 and older who were employed or looking for work—increased by 0.1 percentage points to 65.3%. Despite the increase in the month, the participation rate was down 0.4 percentage points on a year-over-year basis.

Total hours worked increased 0.4% in April and were up 0.9% compared with 12 months earlier.

Average hourly wages among employees increased 3.4% (+$1.20 to $36.13) year-over-year in April, following growth of 3.6% in March (not seasonally adjusted).

Employment fell in manufacturing (-31,000; -1.6%) in April, as the industry continues to face uncertainty related to tariffs on exports to the United States. Ontario posted the most significant decline (-33,000; -3.9%) in this industry among the provinces. This was the first significant decline for manufacturing employment at the national level since November 2024. Despite the decrease in the month, employment in manufacturing changed little on a year-over-year basis in April.

Wholesale and retail trade employment declined by 27,000 (-0.9%) in April, following a similarly sized decline in March (-29,000; -1.0%). The decline over the two months offset the substantial gain recorded in February. On a year-over-year basis, wholesale and retail trade employment changed little in April.

Chart 3 
Employment down in manufacturing in April

Employment rose in public administration (+37,000; +3.0%) in April, the first significant increase for the sector since July 2024. The increase was mostly in temporary work and coincided with activities associated with the federal election. Advanced polling took place from April 18 to April 21 and the election was held on April 28. The Labour Force Survey (LFS) reference week was April 13 to April 19.

In finance, insurance, real estate, rental and leasing, employment increased by 24,000 (+1.6%) in April, continuing an upward trend from October 2024, with cumulative gains during this period totalling 67,000 (+4.7%).