Canada Employment Fell by 17,700, Jobless Rate Rose to 6.9%

Students speak with representatives during the Hi-Tech Career Fair at the University of Victoria in Victoria, British Columbia. Youth unemployment rose to 14.3% in April. Photo by James MacDonald /Photographer: James MacDonald/Bl

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(Bloomberg) — The Canadian economy shed 17,700 jobs in April while more people looked for work, pushing the unemployment rate up to 6.9%.

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Although employment on a year-over-year basis was up 67,000, it declined by 112,000 over the first four months of 2026, Statistics Canada reported on Friday.

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The decrease in employment since the start of the year was nearly all in full-time work and marked the steepest four-month drop since January 2021.

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At the same time, the statistics agency said more people searched for work last month, growing the country’s labor force but pushing up the jobless rate to its highest level in six months.

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Economists surveyed by Bloomberg were expecting a modest increase of 10,000 in employment and for the jobless rate to hold steady at 6.7%.

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The loonie dropped versus the US dollar after the release, falling about 0.1% to the day’s low of C$1.3683 as of 8:35 a.m. in Ottawa. Canadian bonds rallied across the curve, with the two-year yield down about eight basis points to 2.85%. Swaps traders pared their expectations of Bank of Canada tightening into the end of the year.

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The cumulative decline in employment since January comes as US tariffs continue to loom over businesses and the war in Iran drives up global uncertainty, two forces that are expected to shape the Canadian economy this year.

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The Bank of Canada highlighted in its most recent monetary policy report that those two forces could push the central bank to either raise interest rates or cut them, depending on whether inflationary pressures from the Iran war or domestic economic softness dominate.

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“The BoC faces a tug-of-war on the direction of monetary policy,” Charles St-Arnaud, chief economist at Servus Credit Union, said in an email. 

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“This will keep the policy rate unchanged for an extended period. However, it is clear that the longer oil prices remain elevated, the more likely the BoC may need to hike rates.”

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Employment losses in April were concentrated in information, culture and recreation, construction and in other services — an industry that includes repair and maintenance as well as personal services.

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Those declines were partially offset by increases in business, building and other support services, health care and social assistance as well as in accommodation and food services.

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While employment was little changed across most industries on a yearly basis, there was a strong increase of 119,000 in health care and social assistance over that period.

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The jobless rate increased for youth by half a percentage point to 14.3%, which was virtually unchanged from a year ago but significantly above the pre-pandemic average of 10.8%. Core-aged men also experienced a higher unemployment rate, rising by 0.3 percentage points to 6.1%.