Canada’s Unemployment Rate Grew to 7.1 Percent in August; 66,000 Jobs Lost

Signage marks the Statistics Canada offices in Ottawa on July 21, 2010. The Canadian Press/Sean Kilpatrick

For the second month in a row, the Canadian economy lost jobs as the unemployment rate grew to its highest level since May 2016, excluding the pandemic period.

Canada’s unemployment rate grew 0.2 percentage points since July to 7.1 percent in August, representing a 0.5 percentage point increase since January, Statistics Canada said in its August Labour Force Survey data released Sept. 5.

In total, the number of unemployed people rose by 34,000 from July to reach 1.6 million people in August. Comparatively, the unemployment rate averaged 6 percent from 2017 to 2019, ahead of the pandemic period.

The layoff rate in August was 1 percent, which increased from 0.9 percent one year ago, and most of those who were unemployed in July continued to face challenges finding work in August, Statistics Canada says. Only 15.2 percent of those who were unemployed in July found work in August, compared to an average of 23.3 percent from 2017 to 2019.

The employment rate declined by 0.2 percentage points from July to 60.5 percent in August, which also represents the second consecutive monthly decline. Since the beginning of the year, employment has decreased by 0.6 percentage points.

Meanwhile, the economy lost 66,000 jobs, largely due to a decline in part-time work. This continued the decline that began in July when Canada lost 41,000 jobs, totalling more than 100,000 job losses this summer.

‘A Grim Picture’

Conservative Leader Pierre Poillievre says that while more than 100,000 Canadians lost their jobs this summer, the federal government has allowed 105,000 temporary foreign workers into the country this year.

“We have the lowest economic growth in the G7. That adds to the second highest unemployment in the G7, the worst housing costs in the G7, and the most household debt in the G7,” Poilievre told reporters on Sept. 5.

Conservative MP Garnett Genuis called the latest job data “a disaster” that “paints a grim picture.” He said that calling for an end to “this metastasizing unemployment crisis” will be the Conservatives’ top priority when Parliament returns on Sept. 15.

“Working Canadians want more hours and work multiple jobs because of the cost of living crisis,” Genuis said in a Sept. 5 post on X, adding that the number of “discouraged searchers” continues to increase.

The Labour Force Survey found that nearly one in 10 workers would prefer to work more hours, and 8.2 percent of those unemployed didn’t look for work because “they believed no suitable work was available.” This rate increased 0.6 percentage points from one year earlier.

The industries that faced the largest job losses were the professional scientific and technical services sector with 26,000 job losses, the transportation and warehousing sector with 23,000 job losses, as well as the manufacturing sector with 19,000 job losses.

The provinces that recorded the largest declines in employment in August were Ontario, British Columbia, and Alberta. Ontario lost 26,000 jobs with its unemployment rate declining by 0.2 percentage points to 7.7 percent. The three highest unemployment rates across Canada’s 20 largest census metropolitan areas were in all Ontario, including Windsor, Oshawa, and Toronto.

“Since the beginning of the year, regions of Southern Ontario have faced an uncertain economic climate, brought on by the threat or imposition of tariffs, including on motor vehicle and parts exports,” Statistics Canada said.

New Measures

Following the release of the Labour Force Survey on Sept. 5, Prime Minister Mark Carney announced new measures for workers and businesses impacted by the U.S. sectoral tariffs.

The announcement includes a range of measures such as “a new reskilling package” for up to 50,000 workers, improvements to employment insurance benefits, and a digital jobs and training platform aimed at connecting Canadians with jobs more quickly.

Among other measures, the federal government has pledged $5 billion in funding to help firms in all sectors impacted by tariffs, and says it will introduce a new “buy Canadian policy” to ensure the federal government buys from Canadian suppliers.

The Prime Minister’s Office says the new initiatives aim to “help workers acquire new skills and businesses retool their production and diversify their products.”

Jobs Minister Patty Hajdu says Canadian workers are the “foundation” of Canada’s economy.

“By investing in skills, training, and resources, workers will be ready to adapt to today’s challenges and lead in tomorrow’s economy,” she said in a Sept. 5 statement. “When Canadian workers succeed, all of Canada benefits.”

Meanwhile, the Alberta government says it’s launching a new Labour Market Information portal in response to the latest job data. The initiative aims to provide Albertans with up-to-date data on what jobs are in demand and what skills are needed in the workforce, the province said in a Sept. 5 release.

To combat rising youth unemployment in British Columbia, the province says it’s investing in education by improving post-secondary education opportunities, and providing funding for more than 28,000 individuals to attend apprenticeship and foundation training programs. The announcement also came in response to the latest job data from Statistics Canada.

In August, the Ontario government announced funding to expand training and employment services for workers impacted by U.S. tariffs.

The Canadian Press contributed to this report.