Canada Loses 68,300 Jobs as Unemployment Rises to 6.5%

By: Ebenezer Adugyamfi / Emmanuel Ayiku for GhanaianNewsCanada

12 October 2026

Canada’s labour market suffered a significant setback in September after the country recorded a net loss of 68,300 jobs, pushing the national unemployment rate higher and raising fresh concerns about the strength of the economy.

Data released by Statistics Canada on Friday, October 9, showed that employment declined by approximately 68,000 positions during the month, representing a 0.3 per cent decrease. The unemployment rate rose from 6.4 per cent in August to 6.5 per cent in September.

The latest figures marked the second consecutive month of employment losses, following a decline of 41,700 jobs in August. Together, the two monthly setbacks have reversed much of the employment growth recorded earlier in the year.

The September outcome was also considerably weaker than economists had anticipated. Economists surveyed by Reuters had expected Canada to add approximately 9,200 jobs during the month, with the unemployment rate reaching 6.5 per cent.

Instead, the economy recorded another contraction in employment, highlighting the challenges facing workers and employers across several sectors.

Young Canadians Among the Hardest Hit

Young people experienced one of the largest declines in employment during September, raising concerns about opportunities for students, recent graduates and others attempting to enter the workforce.

Statistics Canada reported that employment among people aged 15 to 24 fell by 48,000 jobs, representing a 1.8 per cent monthly decline. This followed a smaller decrease in August, bringing the cumulative loss among young workers to 67,000 positions over the two-month period.

The decline effectively offset the employment gains recorded among young people between April and July.

Canada’s youth unemployment rate, however, remained relatively unchanged at 13 per cent in September. Statistics Canada explained that the number of young people participating in the labour force also declined during the month.

The figures point to continuing challenges for young Canadians seeking employment in an increasingly competitive labour market.

For international students and newcomers hoping to establish themselves professionally in Canada, the figures also underline the importance of monitoring changes in hiring conditions and employment opportunities.

Education and Healthcare Record Significant Job Losses

The public sector recorded a substantial decline in employment as the number of government-sector employees continued to fall.

According to Statistics Canada, public-sector employment declined by 70,000 positions in September, representing a 1.5 per cent decrease. It was the fourth consecutive monthly decline in the sector.

Educational services recorded one of the largest industry-specific reductions, losing 35,000 jobs, or 2.2 per cent, during September.

Compared with September 2025, employment in educational services was down by 67,000 positions, representing a 4.2 per cent decline.

Healthcare and social assistance also experienced a reduction, with employment falling by 23,000 jobs, or 0.8 per cent, during the month.

Despite the September decline, healthcare and social assistance employment remained 93,000 positions higher than a year earlier, demonstrating that the sector’s longer-term employment trend differs from its latest monthly performance.

The combined losses in education, healthcare and social assistance accounted for a significant portion of the September employment decline.

The figures come amid changes in Canada’s immigration and international student policies, which have affected parts of the education sector. However, the monthly employment figures alone do not establish that any single policy was responsible for the entire decline.

Manufacturing Sector Also Feels the Pressure

Canada’s manufacturing industry recorded a loss of 13,000 jobs in September, equivalent to a 0.7 per cent decline.

The reduction followed an increase of 22,000 manufacturing jobs in August. Employment in the industry was broadly unchanged compared with September 2025.

The manufacturing sector has attracted attention amid trade tensions between Canada and the United States, particularly following the introduction of a new round of US tariffs affecting Canadian goods.

Although the timing has raised questions about the possible effects of trade measures on Canadian employers, economists have cautioned against attributing the September employment decline directly to tariffs.

The latest figures show that manufacturing was among the industries experiencing losses, but the broader employment decline also affected public services and younger workers.

Full-Time and Part-Time Employment Both Decline

The September job losses were spread across both full-time and part-time employment.

Statistics Canada’s Labour Force Survey recorded a decline of approximately 35,000 full-time positions and 33,000 part-time positions.

The employment rate, which measures the proportion of the population aged 15 and older who are employed, fell by 0.2 percentage points to 60.6 per cent.

Meanwhile, the labour force participation rate declined to 64.8 per cent, its lowest level since December 1997 outside the COVID-19 pandemic period.

The participation rate measures the proportion of the population aged 15 and older who are either employed or actively seeking work.

Statistics Canada attributed much of the longer-term decline in participation to population ageing and slower immigration, which have reduced the number of people entering the workforce to replace those leaving it.

The job-finding rate also weakened. The proportion of people who were unemployed in August and found work in September fell to 30.6 per cent, compared with 32.8 per cent a year earlier.

These indicators suggest that finding employment has become more challenging for some jobseekers.

Employment Trends Differ Across Provinces

The impact of the employment decline varied across Canada, with some provinces recording substantial losses while others added jobs.

Quebec experienced the largest provincial decline, losing 49,000 jobs in September. The province had also recorded an employment reduction in August, bringing its cumulative decline since January to 130,000 positions.

British Columbia lost 20,000 jobs during the month, while employment in Manitoba declined by approximately 4,400 positions.

Ontario recorded a smaller reduction of 2,000 jobs. Despite the monthly decline, employment in Ontario remained 86,000 positions higher than a year earlier. The province’s unemployment rate stood at 7.0 per cent in September.

Alberta moved in the opposite direction, adding 23,000 jobs, an increase of 0.9 per cent. Employment in the province was 76,000 positions higher than a year earlier, while its unemployment rate fell to 6.4 per cent.

Newfoundland and Labrador also recorded an employment increase, adding 1,800 jobs, while Prince Edward Island gained approximately 1,000 positions.

The differences underline the uneven nature of Canada’s labour market, where employment conditions can vary significantly depending on the province and industry.

Wage Growth Continues Despite Employment Losses

Despite the reduction in employment, average hourly wages for permanent employees continued to rise.

Statistics Canada reported that average hourly wages for permanent employees increased by 2.3 per cent year over year in September, reaching $37.64. This compared with annual growth of 2.0 per cent in August.

However, rising average wages do not necessarily mean that all workers are experiencing improved financial conditions. People who lose their jobs may face reduced household income, while those who remain employed continue to deal with their individual living expenses.

The combination of weaker hiring, job losses and continued wage growth also presents a challenge for policymakers assessing the direction of the Canadian economy.

What the Figures Mean for the Bank of Canada

The weaker employment report has added another consideration for the Bank of Canada as it assesses economic growth, inflation and the appropriate direction of interest rates.

A deteriorating labour market can strengthen the argument for maintaining or reducing borrowing costs to support economic activity. However, persistent inflation pressures, including those associated with higher energy prices, can complicate decisions about monetary policy.

Following the release of the September employment figures, financial markets reduced expectations of an immediate interest-rate increase.

Economists remain attentive to the possibility that rising energy prices could contribute to inflation later in the year, even as employment conditions weaken.

The Bank of Canada’s future decisions will depend on a broader range of economic indicators rather than employment figures alone.

Outlook for Canada’s Labour Market

The September employment report presents a difficult picture for Canada’s labour market, particularly after the country recorded two consecutive months of job losses.

The decline has affected young workers, public-sector employees and manufacturing workers, while provincial results show that employment conditions remain uneven across the country.

Nevertheless, the latest monthly figures do not, on their own, establish that Canada is entering a recession. Employment remains above its level a year earlier, and some provinces and industries continue to record growth.

The next Labour Force Survey, scheduled for release on November 6, 2026, will provide further information about employment conditions during October.

Until then, the central question for workers, employers and policymakers is whether the recent losses represent a temporary setback or the beginning of a more prolonged period of labour-market weakness.

Source: Statistics Canada, Labour Force Survey, September 2026, released October 9, 2026; Reuters reporting on Canada’s September employment figures.