Unemployment in Canada climbed to 7.0% in May 2025, the highest level since 2016 (excluding the pandemic years), as job creation slowed to a crawl with only 8,800 new jobs added. According to Statistics Canada’s Labour Force Survey, released June 6, employment growth was essentially flat, marking the second consecutive month of stagnation.
Book Your Consultation for Canadian Immigration
Employment Trends: Growth Stalls
Canada’s total employment stood at 20.98 million, unchanged from April. The employment rate remained at 60.8%, matching the low seen in October 2024.
This follows a strong period of job growth between October 2024 and January 2025, when over 211,000 jobs were created. However, the recent slowdown has raised concerns about the labour market’s momentum, particularly amid rising tariffs and a tough job market for students.
In May, full-time employment rose by 58,000, but this was offset by a 49,000 decline in part-time jobs, suggesting a shift in job types rather than net gains.
Rising Unemployment and Longer Job Searches
The unemployment rate rose for the third straight month, now totaling 1.6 million unemployed Canadians—a 13.8% increase from a year earlier. The average job search duration extended to 21.8 weeks, up from 18.4 weeks in May 2024.
Nearly 47% of unemployed individuals had not worked in the past year or had never worked, highlighting growing difficulty in job transitions.
Sector Breakdown: Mixed Signals
Industries with Gains:
- Wholesale & Retail Trade: +43,000 jobs, led by wholesale recovery.
- Information, Culture, and Recreation: +19,000, boosted by seasonal activity.
- Finance & Real Estate: +12,000, continuing a long-term upward trend.
- Utilities: +4,900, showing stability in essential services.
Industries with Losses:
- Public Administration: -32,000, reflecting post-election adjustments.
- Accommodation & Food Services: -16,000, affecting youth and part-timers.
- Transportation & Warehousing: -16,000, potentially tariff-related.
- Business Support Services: -15,000, signaling reduced back-office demand.
Regional Overview: Gains in BC and Atlantic Canada, Declines in Quebec
- British Columbia: +13,000 jobs, with Victoria posting the lowest metro unemployment at 3.7%.
- Nova Scotia & New Brunswick: Strong job growth (+11,000 and +7,600, respectively).
- Quebec: -17,000 jobs, offsetting April’s gains.
- Ontario: Flat job numbers, but high unemployment in Windsor (10.8%), Oshawa (9.1%), and Toronto (8.8%).
Demographic Insights: Mixed Results by Age and Gender
Core-Aged Workers (25–54):
- Women: +42,000 jobs; employment rate rose to 80.1%.
- Men: -31,000 jobs; employment rate dropped to 86.0%, with rising unemployment.
Youth (15–24):
- Employment unchanged for a fourth month; unemployment remained high at 14.2%.
Older Workers (55+):
- Employment stable with minimal change year-over-year.
Student Labour Market: A Difficult Summer Start
Returning students faced an unemployment rate of 20.1%, the highest since 2009 (excluding COVID years). Young men were particularly affected, with a 22.1% jobless rate. Most employed students worked in retail, hospitality, or recreation, though student jobs in accommodation and food services dropped 22% year-over-year.
Non-returning students also saw slightly higher unemployment at 12.2%, up from 11.6% in 2024.
Wages and Hours Worked
Average hourly wages rose 3.4% year-over-year to $36.14, matching April’s pace. Total hours worked were unchanged from April but up 0.9% from May 2024.
Outlook: Uneven Recovery and Policy Pressure
Canada’s labour market is showing signs of strain. While sectors like retail and finance continue to grow, job losses in government, hospitality, and support services highlight vulnerabilities. Youth and student workers are particularly affected, and regional disparities remain sharp.
As economic headwinds persist—including trade tensions and inflation concerns—the Bank of Canada and policymakers face increasing pressure to support job creation and workforce transitions in the months ahead.
