In April 2025, Canada’s unemployment rate surged to 6.9%, aligning with the highest level seen in November 2024 outside the pandemic period, according to fresh data released by Statistics Canada on Friday. This spike brings the number of jobless Canadians close to 1.6 million, driven in part by economic turbulence from U.S. President Donald Trump’s tariffs on Canadian goods.
The labor market showed minimal movement, with a modest gain of 7,400 jobs in April, a stark contrast to the 32,600 jobs lost in March. Economists surveyed by Reuters had anticipated a smaller job increase—of around 2,500—and an unemployment rate of 6.8%.
The imposition of U.S. tariffs, starting with steel and aluminum in March and extending to automobiles and other products in April, has rippled through Canada’s economy. These trade barriers, coupled with varying exemptions, have strained businesses and consumers alike. The Bank of Canada has signaled that the economy could face significant challenges in the near term, with declining exports, rising prices, and potential layoffs looming. The central bank has pledged swift action if conditions deteriorate further.
Market expectations for monetary policy adjustments are growing, with currency swap markets indicating a 52% chance of a 25-basis-point rate cut by the Bank of Canada in June. Following the labor data release, the Canadian dollar edged up 0.08% to 1.3912 against the U.S. dollar, while yields on two-year government bonds dipped 2.4 basis points to 2.566%.
The pool of unemployed Canadians—those actively seeking work or on temporary layoff—grew by 39,000 (2.6%) in April, marking a 13.9% increase (189,000 people) compared to April 2024. Statistics Canada noted that job seekers faced tougher conditions, with 61% of those unemployed in March still without work in April, up nearly four percentage points from the previous year.
The manufacturing sector bore the brunt of the tariff-related uncertainty, shedding 31,000 jobs in April. Meanwhile, the employment rate—the share of the working-age population with jobs—fell to 60.8%, a six-month low, down 0.2 percentage points from March. Despite slower population growth in recent months, employment gains have not kept pace, continuing a trend seen throughout 2023 and 2024.
Public sector employment provided some relief, rising by 23,000 jobs (0.5%) in April, largely due to temporary hiring for the federal election. Wage growth for permanent employees held steady at 3.5%, a key indicator monitored by the Bank of Canada for inflationary pressures.
As Canada navigates these economic headwinds, the interplay of trade disruptions and domestic policy responses will likely shape the labor market’s trajectory in the months ahead.
