Canada’s Job Market Sags Under Pressure from US Tariffs

Canada’s unemployment rate shot up to 6.9% in April, marking the highest level in six months as US-imposed tariffs on steel, aluminum, and automobiles has begun to bite. 

Statistics Canada reported a 0.2% increase in unemployment from March, largely driven by a 31,000-job loss in the manufacturing sector and another 27,000 cuts in wholesale and retail trade. Public sector hiring, up by 23,000 or 0.5%, offered some relief due to temporary staffing for the federal election held on April 28.

Average hourly wage growth for permanent employees remained steady at 3.5%, providing little new momentum for the Bank of Canada’s inflation monitoring efforts. 

Net employment gains were modest, with just 7,400 jobs added, slightly better than market expectations but much better than March’s loss of 32,600 jobs. Meanwhile, the employment rate dipped to 60.8%, continuing a trend where job creation lags behind population growth.

With 61% of unemployed Canadians from March still jobless in April, almost four percentage points higher than last year, labor market weakness is becoming harder to ignore. 

What Does This Mean for Me?

The Bank of Canada has already flagged slowing exports, rising prices, and weaker hiring as signs of economic strain, hinting at a possible rate cut if conditions worsen. As trade tensions deepen, Canada’s economy is bracing for a challenging summer.