The labour market weakened for a second consecutive month in August as job losses mounted across key industries and provinces. The decline of 66,000 positions pushed the unemployment rate to 7.1 per cent, its highest level since 2016 outside of the pandemic years.
Full-time employment held steady after slipping in July, while self-employment fell sharply, down 43,000. The employment rate dropped to 60.5 per cent, continuing a downward trend that has stretched throughout 2025.
Canadians in their prime working years bore the brunt of the losses. Employment for men aged 25 to 54 declined by 58,000, while women in the same age group lost 35,000 jobs. For both groups, the employment rate fell to its lowest level in several years, excluding the disruptions of the pandemic. Youth and older workers were less affected in August, but unemployment among young Canadians remained elevated at 14.5 per cent. Among returning students, one in six reported being unemployed over the summer, the weakest student job market since 2009.
Job cuts were concentrated in industries tied to Canada’s economic growth engines. Professional, scientific and technical services lost 26,000 jobs, transportation and warehousing fell by 23,000, and manufacturing shed 19,000, extending a steady decline since the start of the year. Construction was a rare bright spot, adding 17,000 positions.
Regional impacts varied. Ontario recorded the steepest drop with 26,000 jobs lost, a setback most evident in manufacturing hubs such as Windsor and Oshawa. Windsor’s unemployment rate rose to 11.1 per cent, while Toronto and Oshawa also faced elevated joblessness. British Columbia lost 16,000 jobs and Alberta 14,000, the latter posting an 8.4 per cent unemployment rate, the highest since 2017. Quebec’s employment levels held steady, though more residents were actively searching for work, lifting the provincial jobless rate to 6.0 per cent. Prince Edward Island was the only province to post gains.
Despite the losses, average hourly wages increased 3.2 per cent year-over-year to $36.31. Yet the gains masked a rise in underemployment: nearly nine percent of Canadians said they would have preferred more hours of work, with the rate climbing above 11 percent in Newfoundland and Labrador, Ontario, and Alberta.
When discouraged job seekers and struggling people to cover daily living costs or saving are factored in, the broader unemployment measure stood at 8.2 percent in August.
Rising unemployment, weaker part-time and self-employment opportunities, and limited job creation across major provinces point to a challenging fall for Canadian workers.