Source: Statistics Canada
Canada’s labour market remained relatively stable in May 2025, despite a modest uptick in the national unemployment rate. According to the latest Labour Force Survey from Statistics Canada, employment was virtually unchanged (+8,800; +0.0%), and the employment rate held steady at 60.8%. However, the national unemployment rate rose by 0.1 percentage points to 7.0%, marking its highest level since September 2016 (excluding pandemic years).
This increase extends a three-month upward trend in unemployment, which has risen a total of 0.4 percentage points since February. Still, the rise was not uniform across regions or demographic groups, and several positive developments emerged in both employment composition and sector-specific performance.
Sectoral Gains Offset Broader Weaknesses
While total employment remained flat, full-time jobs increased by 58,000 (+0.3%), counterbalanced by a decline of 49,000 part-time positions (-1.3%). Employment gains were concentrated in several key sectors. Wholesale and retail trade added 43,000 jobs (+1.5%), rebounding from two consecutive months of losses. The information, culture and recreation sector saw an increase of 19,000 (+2.3%), while finance, insurance, real estate, rental and leasing also continued its upward trajectory, gaining 12,000 jobs (+0.8%) and extending a trend that began in late 2024.
Utilities recorded a smaller but proportionally significant rise of 4,900 jobs (+3.1%). Meanwhile, public administration (-32,000; -2.5%), transportation and warehousing (-16,000; -1.4%), accommodation and food services (-16,000; -1.4%), and business and support services (-15,000; -2.1%) posted employment declines, partially offsetting the gains elsewhere.
Regional Divergence Highlights Resilience
Not all provinces were affected equally. British Columbia saw an employment rise of 13,000 (+0.4%), with little change in its unemployment rate (6.4%). In Nova Scotia and New Brunswick, employment rose by 11,000 (+2.1%) and 7,600 (+1.9%) respectively, accompanied by meaningful drops in unemployment. Nova Scotia’s rate fell by 0.7 percentage points to 6.5%, and New Brunswick’s fell by 0.6 points to 6.3%.
Conversely, Quebec lost 17,000 jobs (-0.4%) after gains in April, although the unemployment rate remained relatively stable at 5.8%. Manitoba and Prince Edward Island also experienced employment declines, with PEI seeing a notable drop of 2.9%.
Ontario’s employment held steady in May, following losses over the previous two months. However, regional disparities within the province were pronounced. Windsor (10.8%), Oshawa (9.1%), and Toronto (8.8%) recorded the highest unemployment rates among Canada’s 20 largest metro areas, with job losses concentrated in areas affected by trade-related uncertainty in the auto manufacturing sector.
Areas of Strain — and Strength
Several indicators point to growing friction in the labour market. The number of unemployed Canadians rose to 1.6 million, a 13.8% increase year-over-year. The share of job seekers who transitioned into employment in May (22.6%) was lower than both last year’s rate (24.0%) and the pre-pandemic average (31.5%). The average duration of unemployment rose to 21.8 weeks, and nearly half of those unemployed in May had not worked in the past year.
Yet even amid these headwinds, private sector employment posted its first monthly increase since February (+61,000; +0.4%), and average hourly wages continued to grow at a steady 3.4% year-over-year pace, reaching $36.14.
May 2025 brought mixed signals for Canada’s labour market. While the unemployment rate inched upward for a third consecutive month, the overall employment level held fairly steady, bolstered by full-time job growth and sector-specific rebounds.