Canada’s labour market lost ground in July, erasing some of June’s momentum and adding to a year of near-stagnation that is exposing deep weaknesses in the jobs pipeline. Statistics Canada reported a loss of 41,000 positions last month, a 0.2 percent drop that pushed the employment rate to 60.7 percent. The unemployment rate held steady at 6.9 percent, but long-term joblessness reached its highest point since 1998 outside of the pandemic years.
Young workers bore the brunt of the losses. Employment among Canadians aged 15 to 24 fell by 34,000, driving their jobless rate up to 14.6 percent. Returning students fared even worse, with 17.5 percent out of work, and more than 31 percent of high school–age students unable to land a summer job. For racialized youth, the numbers were starker still: Arab youth faced a 26.4 per cent unemployment rate, while rates for Black, Chinese, Filipino and South Asian youth were also far above the 12 per cent seen among non-racialized peers.
Job losses were concentrated in sectors that should be growing. Information, culture and recreation shed 29,000 positions. Construction lost 22,000. Health care and social assistance dropped 17,000 after a short-lived increase in June. Business support services fell again, marking their third decline in four months. Transportation and warehousing added 26,000 jobs, but that wasn’t enough to offset the broader losses.
Most of the decline came from the private sector, which lost 39,000 positions. Public-sector jobs and self-employment were flat. Since January, the economy has only added 27,000 jobs, just 0.1 percent, and the employment rate has slipped by 0.4 percentage points. Full-time work dropped by 51,000 in July alone.
Long-term unemployment is also creeping higher. Nearly one in four unemployed Canadians has been looking for work for more than six months. Two-thirds of those who were jobless in June were still unemployed in July, a sign that it’s taking longer to connect people with suitable jobs.
Provincial results were mixed. Alberta lost 17,000 jobs, lifting its unemployment rate to 7.8 percent. B.C. shed 16,000, with most of the losses among core-aged women. Ontario was mostly unchanged overall, but Toronto’s jobless rate reached nine percent. Saskatchewan was the lone bright spot, adding 3,500 jobs and keeping the lowest unemployment rate in Canada at 5 percent.
Wages rose 3.3 percent from last year to an average of $36.16 an hour, outpacing inflation in June, but growth for newly posted positions is slowing. Hours worked were essentially flat over the year, and productivity gains remain weak.
Confidence in job prospects is uneven. Workers in healthcare, education and construction are the most optimistic, while those in information and culture, professional services, manufacturing and hospitality are far less sure.
And these numbers don’t even capture the full picture. Missing from the official unemployment rate are thousands of so-called “survivor Canadians,” people working two or three part-time or contract jobs, those stuck with fewer hours than they need, or those who’ve simply given up looking. For them, the reality is harsher: incomes that don’t keep up with costs, unstable schedules, and little hope of moving into secure, full-time work.
The July figures point to a labour market struggling to keep up with a growing population. Young workers, racialized communities, and key sectors that should be hiring are instead losing ground. Ottawa has promised action on skills shortages, youth jobs and regional support, but without faster credential recognition, targeted retraining and more robust summer job programs, the gaps will keep widening.
The question is whether the federal and provincial governments will take steps to bring sidelined and underemployed Canadians back into the workforce, or allow the divide between secure and precarious work to grow deeper. If the current trend continues, it raises a deeper question: will more Canadians, whether by choice or because they feel forced, leave for opportunities abroad while new arrivals take their place in the labour force, reshaping the country’s economic landscape in ways policy-makers have yet to fully address?