Canada’s blowout job report in June looks like a headfake after last month’s erosion. Statistics Canada (Stat Can) data shows a sharp decline in jobs for July, partially rolling back most gains made the month before. The details were even worse—the labour force contracted, while long-term and youth unemployment reached levels not seen in decades.
Canada Lost 41,000 Jobs Last Month, Most Were Full-Time Roles
The Canadian labour market shed tens of thousands of jobs last month. Employment fell 0.2% (-41,000 jobs) in July, concentrated in the loss of full-time roles (-51,000 jobs). The sharp drop partially offset the blowout job report in June, where the economy added 83,000 jobs in a single month.
Canada’s unemployment rate remains unchanged at 6.9% in July, as the agency emphasized almost no change (+7,700 workers) in the volume of people actively seeking work.
Canada’s Labour Force Shrank As More People Opt Out
The labour force shrank 0.15% (-33,000 people) to 22.58 million in July, despite the 15+ population growing 0.1% (+37,600 people) to 34.61 million. The participation rate dropped 0.2 percentage points to 65.2%, its lowest since March 2025. That decline offset job losses in the unemployment data, as more people left the job market entirely—likely a reflection of how long it now takes to find work.
Canadian Long-Term Unemployment Rate Highest Since 1998
The most ominous data point in this morning’s report is how many people can’t find a job after months. The share of unemployed workers now considered long-term (27+ weeks) reached 23.8% in July, the highest rate since February 1998. Nearly 1 in 4 unemployed have been actively looking for a job for at least half a year.
Long-term unemployment often increases the likelihood of skills erosion, requiring retraining. It also means workers are more likely to give up job seeking, and fall out of the labour force.
Canada’s Job Losses Hitting Young Adults The Most
Source: StatCan.
Canadian job losses were largely concentrated in young adults (15 to 24 years old). This demographic saw employment dropped 1.2% (-34,000 jobs) in July, sending its employment rate plunging to just 53.6%—the lowest since November 1998 (excluding COVID).
Canada’s youth unemployment rate has climbed to 14.6% in July, with the agency once again emphasizing this was the highest since 2010 (excluding COVID). Returning students were the hardest hit, with an unemployment rate of 17.5%—the worst July since 2009.
The labour market has stagnated so far in 2025, though that’s a slight improvement from erosion last year. However, long-term and youth unemployment are turning into crisis-level issues, eroding into something Canadians haven’t seen in at least a decade. Both of these worsening imply long-term structural issues with no quick fix, but if left unaddressed, will result in a much bigger problem.