First posted on Instagram · @profilopolitics
Canada lost 68,300 jobs in September, Statistics Canada said Friday, and the unemployment rate rose to 6.5% from 6.4% in August. Economists had expected a gain — analysts polled by Reuters forecast an increase of 9,200 jobs. It was the second straight month of losses, following a decline of 41,700 jobs in August, and it wiped out all the employment gains Canada had recorded this year: the country has now lost a net 41,200 jobs in 2026, against a gain of 211,300 in the same period last year.
Watch: CTV News on September's surprisingly weak Canadian jobs report. (CTV News/YouTube)
The losses were not mainly in factories hit by U.S. tariffs. The biggest drop came from the public sector — down 70,000 — with education and health care leading the way. Education alone dropped 35,000, which StatCan ties to fewer international students after Ottawa cut study permits. Health care and social assistance lost 23,000, its first monthly decrease since December 2022. Manufacturing lost about 13,000. Youth took the hardest hit, down 48,000 among Canadians aged 15 to 24, though the youth unemployment rate held at 13% as fewer young people looked for work.
Carney's side treats this as the plan working. His budget already pledged to shrink the federal workforce — 16,000 positions this year and 40,000 by 2028-29 — and the student-permit cuts were meant to cool housing and colleges that had scaled up on temporary residents. The trade fight is the other explanation they point to: talks are frozen, and new U.S. tariffs landed in September. Reuters noted that September was the first full month after the new round of American tariffs took effect, though economists say the tariffs are unlikely to have a major impact on employment data in the coming months.
Conservatives are not buying that. Pierre Poilievre said today Carney's industrial carbon tax is "driving out our jobs," and pledged to reverse the Liberal policies he says have cost people work and homes. His answer is a tariff-free U.S. deal, an end to the industrial carbon tax, and a stop to Chinese steel dumping. Poilievre has long promised to scrap carbon pricing, and Bloomberg has reported it is the first time he has been explicit about killing the industrial tax as well as the consumer one.
Economists see a murkier picture than either side's story. CIBC senior economist Andrew Grantham said the 68,000 decline was in stark contrast to consensus expectations for a modest rebound, but pointed to data volatility as the main cause — the 35,000 drop in education services often swings around the start of new school years. The 13,000 decline in manufacturing, he said, could be a sign the new U.S. tariffs are taking a toll. Through the monthly noise, six-month average employment growth sits at just 9,000. The losses were split almost evenly between full-time work, down 35,000, and part-time, down 33,000. The employment rate fell to 60.6%, and labour-force participation dropped to 64.8% — its lowest in 29 years outside the pandemic. Wage growth for permanent employees ticked up to 2.3% from 2.0% in August.
The September report is the last jobs data before the Bank of Canada's rate decision later this month. Money markets are no longer pricing in a rate increase, though some expect a hike in December. Desjardins' Royce Mendes said that given the recent deterioration in the labour market, Canadian central bankers will likely need to keep rates unchanged. The dollar weakened after the report, falling to C$1.4287 per U.S. dollar.