Canada’s labour market delivered mixed signals in July, with modest gains in payroll employment, a rise in average weekly earnings, and a further slide in job vacancies that pushed labour demand to its weakest point in years.
Even as the data points to employment growth, many Canadians say the reality on the ground feels far different. Job seekers complain that finding stable work has become almost impossible, while newly arrived people and government-funded temporary workers often appear to have better access to opportunities. The federal government continues to prioritize immigration as part of its labour strategy, leaving many feeling vulnerable and uncertain about who is filling the jobs reflected in official data.
The number of employees on payrolls grew by 21,600, or 0.1 percent, reversing June’s dip but leaving overall employment levels slightly below where they were in January.
Average weekly earnings rose 3.3 percent year over year to $1,307.86, building on June’s 3.6 percent increase. On a monthly basis, earnings advanced 0.6 percent. Wages have been climbing steadily since 2022, reflecting a mix of higher pay scales, changing industry composition, and shifts in hours worked.
The headline numbers masked deep divergences between industries. Health care and social assistance added 14,900 jobs in July. Finance and insurance recorded a 1 percent gain, erasing losses from June, while accommodation and food services posted their third consecutive month of modest hiring.
At the same time, Canada’s factories continued to shed workers. Manufacturing payrolls fell by 4,600 in July, extending a seven-month slide. Since January, the sector has lost 28,000 positions, with the hardest-hit segments being motor vehicle parts, machinery, and chemical production. Construction also struggled, losing 2,200 jobs in July after a larger drop in June.
The number of unfilled positions fell 4.2 percent to 469,900, the lowest since before the pandemic recovery. Compared with a year earlier, vacancies are down by nearly 80,000 or 14.5 percent, reflecting both weaker demand and rising unemployment. The national job vacancy rate slipped to 2.6 percent, while the ratio of unemployed Canadians to vacant jobs climbed to 3.3, its highest since 2017 outside the pandemic years.
Provincial patterns revealed similar pressures. Alberta posted the largest drop in openings, down 6,100, followed by Quebec and Newfoundland and Labrador. Over the past year, vacancy rates have fallen most sharply in British Columbia, Manitoba, and Saskatchewan. Nova Scotia, B.C., and Alberta still posted the highest vacancy rates in July, though all were well below peaks reached in 2022.
Sector-by-sector, vacancies dropped in construction, finance, and agriculture. Health care, which has been a consistent source of labour shortages, saw the largest year-over-year contraction in openings, down more than 26 percent. Retail trade also posted double-digit declines.
Taken together, the July figures illustrate a labour market that is still generating pockets of hiring but is increasingly constrained by sectoral weaknesses and shrinking demand for new workers. Rising earnings suggest pay pressures remain, but the broader trend of fewer job postings and a higher unemployment-to-vacancy ratio signals a gradual cooling phase.