Canada’s labour market weakened further in October, shedding 4,700 jobs for the third consecutive month of employment losses, while the national unemployment rate climbed to 6.7%, raising concerns about economic growth, household affordability and the outlook for interest rates.
The latest employment figures, released by Statistics Canada on November 6, come just a day after Prime Minister Mark Carney’s Liberal government tabled its 2026 federal budget, which outlined major spending commitments and tax incentives aimed at stimulating investment and strengthening the Canadian economy.
The report also presents a challenge for the Bank of Canada, which recently raised interest rates to address inflationary pressures driven partly by rising energy prices.
According to the reported figures, employment declined by 4,700 positions in October, falling short of economists’ expectations of a 13,600-job increase. The unemployment rate rose by 0.2 percentage points to 6.7%, exceeding the forecast of 6.5%.
Canada’s employment rate also slipped to 60.5%, marking its third consecutive monthly decline.
Between August and October, the economy lost nearly 115,000 jobs, following declines of approximately 42,000 in August and 68,000 in September.
The increase in unemployment was partly attributed to an additional 33,000 people entering the labour force and searching for employment.
Full-time employment declined by 18,100 positions, while part-time employment increased by 13,400, suggesting a shift in the composition of available work.
Youth unemployment rises as job opportunities narrow
Young Canadians were among the hardest hit by the deteriorating labour market, with the unemployment rate for those aged 15 to 24 rising by 0.7 percentage points to 13.7%.
The figure indicates that approximately one in seven young people participating in the labour force was unemployed in October, raising concerns about employment opportunities for students and recent graduates.
Among Canadians aged 25 to 54, unemployment remained relatively stable at 5.8% for men and 5.3% for women.
Older workers also experienced difficulties, with employment among those aged 55 and above falling by 14,000 and their unemployment rate increasing to 5.5%.
Long-term unemployment remains another significant concern. Approximately 23.7% of unemployed Canadians had been searching for work for at least 27 consecutive weeks, compared with a pre-pandemic average of 17.2% between 2017 and 2019.
Among unemployed job seekers aged 55 and older, the proportion experiencing long-term unemployment reached 32.7%.
The job-finding rate declined to 18.9%, compared with 19.8% a year earlier and an average of 24.6% before the pandemic, indicating that unemployed Canadians are finding it increasingly difficult to secure new positions.
Private-sector employment declines while public hiring increases
The weakness was particularly pronounced in wholesale and retail trade, where employment fell by 29,000 positions in October.
Compared with the same period last year, the sector has lost approximately 113,000 jobs, with much of the decline concentrated in Ontario, Quebec and British Columbia.
However, some industries recorded employment gains. Construction added 16,000 jobs, while educational services gained approximately 15,000 positions.
Private-sector employment declined by 53,000, marking its first monthly decrease since February. In contrast, public-sector employment increased by 50,000 following four consecutive months of losses totalling 148,000 positions.
The figures highlight a widening difference between private-sector hiring and public-sector employment, raising questions about the strength of business investment and job creation.
Ontario and Alberta record rising unemployment
Provincial labour market conditions varied considerably in October, with Ontario and Alberta experiencing notable increases in unemployment.
Ontario’s unemployment rate climbed by 0.3 percentage points to 7.3%, tying Alberta for the second-highest provincial rate. The province’s employment rate also declined by 0.1 percentage points.
Alberta recorded the largest monthly increase in unemployment, with its rate jumping by 0.9 percentage points to 7.3% as the province lost approximately 24,000 jobs.
British Columbia, meanwhile, added 12,000 jobs, with its unemployment rate declining slightly to 6.3%.
Quebec’s unemployment rate fell to 5.7%, although employment remained approximately 106,000 positions below its level a year earlier.
Manitoba recorded the lowest unemployment rate at 5%, followed by Quebec at 5.7% and Saskatchewan at 5.9%.
Newfoundland and Labrador continued to have the highest unemployment rate in the country at 8.7%, despite a monthly decline of 0.4 percentage points.
Wage growth falls behind inflation as household financial pressures mount
Average hourly wages increased by 2.2% year over year to $37.89 in October, representing an increase of 83 cents.
However, wage growth remained below the most recently reported inflation rate of 3%, indicating that average earnings were losing purchasing power in real terms.
The employment report also highlighted growing financial pressures on Canadian households.
Approximately 29.7% of Canadians aged 15 and older lived in households that reported difficulty meeting their financial needs during the previous four weeks, an increase of two percentage points compared with a year earlier.
Financial hardship was particularly pronounced in several Ontario communities with significant manufacturing and industrial activity.
In Oshawa, 38.4% of residents reported household financial difficulties, followed by Windsor at 36.9% and Hamilton at 35.9%.
The figures come amid ongoing trade tensions and tariffs affecting Canada’s automotive and steel industries, both of which play important roles in these regional economies.
Single-parent households were especially vulnerable, with 47.2% of working-age adults in such households reporting difficulty meeting financial obligations.
Workplace satisfaction also declined, with 60.9% of employed Canadians reporting being very satisfied with their jobs, compared with 62.2% in 2023.
Weak labour market complicates Ottawa’s growth agenda
Canada’s latest employment figures contrast with the federal government’s newly announced economic growth strategy, which includes investment incentives such as the Productivity Mega Deduction.
While these measures are intended to encourage business investment and improve productivity over time, their impact on employment may take longer to materialize.
The immediate challenge is a labour market in which private-sector employment is weakening, job seekers are spending longer periods without work and household financial pressures are increasing.
The Bank of Canada also faces competing economic pressures. Rising unemployment and slower wage growth could support a more cautious approach to further interest rate increases, while elevated energy prices and inflation continue to present risks.
The contrast with the United States is notable. The U.S. economy reportedly added 165,000 jobs in October, with unemployment holding near 4.1%, compared with Canada’s 6.7%.
For Canadian households, particularly younger workers and families in manufacturing-dependent communities, the latest figures suggest that economic uncertainty is extending beyond employment statistics into everyday financial security.
With nearly three in ten Canadians reporting difficulty meeting household expenses, the employment report underscores the importance of translating longer-term economic investment into sustainable jobs and near-term affordability improvements.
Statistics Canada’s next Labour Force Survey, covering November employment conditions, is scheduled for December 4.
