EconoFACTS

May 08, 2026 | 09:08

Cdn. Employment — Here Comes the Rain Again

Economist

Douglas Porter , CFA

Chief Economist and Managing Director
Economics

Douglas Porter brings more than three decades of experience analyzing gl... (Read more)

Douglas Porter , CFA

Chief Economist and Managing Director
Economics

Douglas Porter brings more than three decades of experience analyzing gl... (Read more)

Canadian employment fell 17,700 in April, the third decline in the past four months, and weak enough to push up the jobless rate two ticks to 6.9%. There's little doubt that this is a soft report, even taking into account the big slowdown in underlying population growth (the labor force actually rose 33,500 in April). Full-time jobs fell heavily again, dropping 46,700 and shaving total hours worked yet again. The sectoral split was not friendly, with health care & social services one of the rare bright spots, while all of the goods-producing sectors reported job losses. Even the seeming strength in average hourly wages—they eased only slightly to 4.5%—may be a bit of a statistical mirage; the fixed-weight measure reports much tamer wage growth of 3.4% y/y, which squares with other measures. Overall, our grading system gives this report a failing 26.4 score (out of 100)—not to mince words, but that's a clunker.

By sector: The goods-producing industries combined reported a net job loss of 26,800, with a notable pullback in construction (-15.7k). Even the resource sector, which flashed strength earlier in the year, saw a drop of 5.5k. Manufacturing shed a mild 1.5k jobs, but the industry has seen a net loss of almost 60,000 jobs since the start of 2025. Services managed to grind out a small gain, led by health care & social services (+17.5k), management & administrative jobs (+21.5k) and hotels & restaurants (+13k). Most other service sectors reported small losses, with a notable drop in culture, info & recreation (-24.8k).

By province: The big mover to the downside last month was Quebec, which saw a drop of 43,300 jobs, which was almost precisely offset by a 42,400 bounce in next-door Ontario. The big losses in Quebec were in retail & wholesale trade (-14k) and manufacturing (-11k), while Ontario saw 17k pop in health care jobs. Six of the remaining eight provinces reported job losses last month, albeit most were modest setbacks. Quebec also saw the biggest move in its jobless rate, rising a full 8 ticks to 6.2%—taking it well away from vying for the low in the country. That honour now goes to Manitoba, where the unemployment rate fell 6 ticks to just 5.0%.

Bottom Line: The underlying tone in Canada's job market remains quite sour so far in 2026, as the uptick in March jobs proved to be a false dawn. The economy has shed 111,000 full-time jobs just since the start of the year, and youth unemployment is back up to 14.3%. After stumbling slightly in the first quarter of the year, total hours worked in April currently sit 1% a.r. below the Q1 level, suggesting overall GDP growth is struggling again to grow in Q2. For the Bank of Canada, not sure we can be any more direct, but it's incredibly tough to see the logic behind the market's pricing of more than one rate hike later this year, when the economy is struggling mightily to take even one step forward. Even with the big slowdown in population growth, slack appears to be re-building in the job market, which should help keep a lid on any secondary inflation pressures from the oil shock.

Table 1 - Canada — Employment

(change in thousands)

Source: BMO Economics, Haver Analytics