Canada’s job market was hit unexpectedly in March, losing 33,000 jobs. This was the biggest decline in more than three years. As a result, the unemployment rate rose slightly from 6.6% to 6.7%, according to Statistics Canada.
Economists had predicted that Canada would gain 10,000 jobs, but there was a sharp decline, mainly in full-time positions. This drop follows a period of strong job growth from November to January, when 211,000 new jobs were created.
One major reason for the job losses is uncertainty around trade tariffs. Many companies paused hiring or laid off workers due to concerns about new tariffs imposed by the United States.
In March, US President Donald Trump introduced a 25% tariff on Canadian steel and aluminum. He also placed duties on cars and parts that do not comply with a free trade agreement. In response, Canada imposed tariffs on US vehicle imports. These trade tensions have caused businesses to be cautious about investments and hiring.
The number of unemployed people in Canada increased by 36,000 in March, reaching 1.5 million. Many of these job losses came from the construction and retail sectors. Some experts believe unemployment could continue to rise, possibly exceeding 7% later in the year.
The uncertainty has also affected Canada’s currency. The Canadian dollar dropped by 0.72% against the US dollar after China announced retaliatory tariffs on the United States, increasing concerns about the country’s economic stability.
With the job market weakening, financial markets predict that the Bank of Canada may cut interest rates on April 16. The chance of a rate cut has jumped to 62%, up from 25% the day before. Lower interest rates could help boost the economy but also signal that Canada is facing economic difficulties.
Experts warn that job losses could continue, especially in industries affected by US tariffs. However, the overall layoff rate remains similar to pre-pandemic levels. Despite the job market struggles, wage growth remained steady at 3.5% in March.
