Canada’s labour market got off to a tough start in 2026, losing over 100,000 full-time jobs in the first two months. These latest numbers have raised worries about the health of the Canadian economy and the effects of ongoing trade tensions with the United States.
New labour data shows Canada’s unemployment rate has climbed to 6.7 per cent, which is high compared to other major economies.
The job losses in February were the biggest since the COVID-19 pandemic, wiping out much of the growth Canada saw late last year.
The wholesale and retail trade sector took the biggest hit, making up a large part of the job losses. Economists say this shows broader economic uncertainty, especially in industries tied to international trade.
Canadian Prime Minister Mark Carney recognized the economic challenges the country is facing. While visiting Norway, he told reporters that U.S. trade actions are forcing Canada to make major economic adjustments.
Despite the job losses, the prime minister noted that wages across the country have generally increased and that the unemployment rate is still slightly lower than when he took office in March 2025.
The economic report has also stirred political debate. Pierre Poilievre called the numbers troubling and criticized how the government is handling the economy.
Poilievre said that while many countries face global economic challenges, Canada’s slowdown stands out among the G7 nations.
Much of the economic pressure stems from ongoing trade tensions with the United States under President Donald Trump.
The U.S. has imposed tariffs on key Canadian industries, including automobiles, steel, and aluminium, leading to job losses in those sectors.
Although some Canadian exports are protected by the United States–Mexico–Canada Agreement (USMCA), uncertainty about the deal’s future is still affecting businesses and their hiring choices.
Economists warn that trade tensions and unclear policies could keep slowing down the economy. Katherine Judge, senior economist at CIBC Capital Markets, called the latest job numbers worrying.
She pointed out that the labour market seems to be weakening because businesses are holding off on hiring while they wait for clearer international trade policies.
Canada’s economy still depends a lot on trade with the United States. In the past, about three-quarters of Canadian exports went to the U.S., but that number has recently dropped to around 67 percent.
Because of this close economic connection, changes in U.S. trade policy can directly affect Canadian jobs and growth.
As trade negotiations continue and economic uncertainty persists, policymakers and businesses alike will be closely watching future labour reports to see whether Canada’s job market stabilizes in the months ahead.
