Canadian employment weakened in April, with Statistics Canada reporting a loss of 17,700 jobs against consensus expectations for a modest gain. The decline marks the third monthly contraction in the past four months and brings cumulative job losses since the start of the year to roughly 112,000 — the weakest opening to a year since 2009, excluding the pandemic period.
The unemployment rate rose 0.2 percentage points to 6.9 per cent, approaching last September’s cyclical high of 7.1 per cent. While part of the increase reflects a constructive rise in labour force participation (to 65.0 per cent) as workers re-entered the job market, the broader composition of the report points to underlying softness in labour market conditions.
Full-time employment fell by 46,700, extending a pattern that has erased roughly 111,000 full-time positions year-to-date. Losses were broad-based, with 10 of 16 sectors declining, the weakest breadth since 2009. Goods-producing industries shed a combined 26,800 jobs, led by construction (-15,700) and resources (-5,500), while manufacturing recorded only a small monthly decline but has cumulatively lost nearly 60,000 jobs since the start of 2025. Services posted a marginal gain, with increases in health care and social assistance (+17,500), management services (+21,500), and accommodation and food services (+13,000) partially offset by a sharp drop in culture, information and recreation (-24,800).
Regionally, Quebec lost 43,300 jobs, pushing its unemployment rate up 0.8 percentage points to 6.2 per cent, largely offset by a 42,400 gain in Ontario. Youth unemployment also rose, climbing back to 14.3 per cent.
Wage data offered a mixed signal. Headline average hourly earnings held at 4.5 per cent year-over-year, but Statistics Canada’s constant-composition measure, which controls for shifts in the composition of employment, eased to 3.4 per cent, a reading more consistent with a softening labour market and corroborating indicators. Total hours worked in April are tracking roughly 1 per cent annualized below the Q1 average, pointing to a sluggish handoff into Q2 GDP.
Rising unemployment is always a concern given its close correlation with mortgage defaults. However, the data should be examined both on a regional basis and by age cohort. Employment among the 25-54 age group was broadly steady, while declines were concentrated in the 15-24 and 55+ segments. These groups tend to be less central to core mortgage market dynamics. Looking at Ontario cities since December 2025, unemployment rates have moved unevenly across communities dependent upon manufacturing, with no clear directional trend emerging to date.
The April release reinforces the case for the Bank’s wait-and-see posture and pushes back against market pricing of further tightening later this year. With slack visibly rebuilding in the labour market and constant-composition wage growth decelerating, the risk of second-round inflation effects from the recent energy price shock appears contained. Combined with subdued housing activity, modest credit growth, and consumers facing higher expenses, the balance of risks tilts the policy bias toward patience and, should weakness persist, toward eventual easing rather than further restraint.
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