Statistics Canada reported that Canada’s unemployment rate rose to 7.1% in August 2025, up 0.2 points from July highest rate since May 2016, excluding the pandemic years of 2020 and 2021.
Nearly 1.6 million Canadians were out of work as the economy lost thousands of jobs. Most of these losses occurred in part-time positions.
The data shows ongoing economic challenges. Fewer new hires and some layoffs led to job losses. The employment rate fell to 60.5%, the lowest since the pandemic began.
Canada's August unemployment rate at nine-year high outside of pandemic https://t.co/DXYnNN7dFK https://t.co/DXYnNN7dFK
— Reuters Business (@ReutersBiz) September 5, 2025Losses were largest in professional services, transportation, and manufacturing. In August, Canada lost 65,500 jobs, more than analysts expected. This was the worst monthly drop since January 2022. U.S. tariffs on Canadian goods have further affected hiring and job growth, Reuters reported.
Read: Canada to Lift USMCA Tariffs, Seeks New US Trade Deal
The rising unemployment has raised worries about Canada’s economic recovery and job market stability. It may influence decisions on interest rates by the Bank of Canada.
