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Written By
Steve Tustin
Feb 14, 2025
•Job Search
Newcomers need to understand Canada’s job market to make it easier to find a job. The latest Canada job market report for January 2025 is good news for newcomers. Hiring was strong, and the unemployment rate fell as job creation soared.
According to the most recent Statistics Canada job market report, unemployment fell to 6.6% in January, from 6.7% in December. That’s the second straight monthly decline after peaking at 6.9% in November.
The Canadian job market added 76,000 jobs in January. This was more than the 25,000 jobs most economists forecast.
The Canadian job market “blew the barn doors off expectations once again,” said Derek Holt, vice president and head of capital markets economics for Scotiabank.
“We’ve got an incredibly strong job market that’s got some serious momentum behind it,” said Holt. The manufacturing sector added 33,000 jobs. One-third of those jobs are in Ontario, the most popular landing area for immigrants.
More good news for newcomers is full-time employment increased by 35,000 jobs in January. 40,900 part-time jobs were added, according to the job market report.
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REGISTER FOR THE WEBINARJob creation in Canada’s three big provinces (Ontario, British Columbia, and Quebec) is on the roll. As Scotiabank’s Holt pointed out, Canada created 385,000 jobs in 2024, with 211,000 in the past three months and 280,000 in the past six months.
Private sector jobs were up 164,000 in 2024 and up 96,000 in January. Canada gained 177,000 in the last three months and 215,000 in the past six months.
The slight drop in the unemployment rate to 6.6% was due to an increase in the labour force by 61,000 (primarily newcomers), much less than the 76,000 jobs gained.
The labour force continues to grow very strongly, with a net increase of 225,000 in the past three months.
In addition to the gain of 33,000 jobs in manufacturing, these sectors saw job gains in January:
In January, fewer people were employed in “other services,” which includes personal and repair services. That sector lost 14,000 jobs.
Ontario added the most jobs in January, with 39,000, while British Columbia added 23,000. New Brunswick added 2,900 jobs and saw its unemployment rate drop 1.3 percentage points to 6.4%.
Part of Canada’s job growth is due to lower inflation and interest rates.
In late January, the Bank of Canada lowered its interest rate to 3% from 3.25%, its sixth consecutive cut. Many economists predict that there may be more cuts in 2025, affecting both job creation and the cost of living.
According to the latest Statistics Canada report, annual inflation was 1.8% in December, and experts predict it is unlikely to rise much higher. However, the Bank of Canada warns that an impending tariff war with the United States would trigger economic damage in Canada, including job loss.
According to Andrew Grantham, senior economist at CIBC Capital Markets, though the latest job report was positive, interest rates still need to move lower than 3%.
“We continue to think that even lower interest rates will be needed for the economy to fully absorb that slack, particularly given heightened trade uncertainty, which could impact hiring decisions ahead.”
| INDUSTRY | % CHANGE DECEMBER TO JANUARY 2025 |
|---|---|
| Agriculture | 4.4 |
| Natural Resources | -1.6 |
| Utilities | -2.1 |
| Construction | 1.2 |
| Manufacturing | 1.8 |
| Wholesale and Retail Trade | 0.1 |
| Transportation and Warehousing | 1.2 |
| Finance, Insurance, Real Estate, Rental and Leasing | -0.4 |
| Professional, Scientific and Technical Services | 1.1 |
| Business, Building and Other Support Services | -1.0 |
| Educational Services | -0.5 |
| Health Care and Social Assistance | 0.1 |
| Information, Culture and Recreation | -0.3 |
| Accommodation and Food Services | 1.3 |
| Other Services (Except Public Administration) | -1.8 |
| Public Administration | -0.3 |
In 2024, Immigration, Refugees and Citizenship Canada (IRCC) announced new immigration targets for 2025 – 2027. The new plan and lower targets aim to reduce pressure on housing supply and other services. The changing targets apply across all permanent residence categories. Canada has also reduced the number of temporary foreign workers and international students it welcomes.
| YEAR | PERMANENT RESIDENCE TARGETS |
| 2025 | 395,000 (down from 500,00) |
| 2026 | 380,000 (down from 500,000) |
| 2027 | 365,000 |
The new plan will result in a population decline of 0.2% in 2025 and 2026 and an increase of 0.8% in 2027.
Economists like Scotiabank’s Derek Holt predict these population growth policies will impact the job market and labour force throughout 2025. The changes aim to close the uneven gap between high population growth and job creation.
As the most recent Statistics Canada report points out, “as immigrants integrate into the Canadian labour market, they often face challenges finding work well-aligned with their qualifications.”
With a rapidly changing job market, it’s important to consider how changes will affect job prospects in your specific industry and occupation.
Economists are optimistic about the Canadian job market heading into the spring if a trade war with the United States can be avoided or minimized.
Bank of Montreal chief economist Douglas Porter said, “The turnaround in job growth, even amid cooler population trends, reinforces the message from firmer auto and home sales that the economy was turning a corner thanks to the heavy-duty drop in interest rates in the past eight months.”
CIBC’s Andrew Grantham thinks Canada’s next employment report is more “likely to pick up an impact from recent (U.S.) trade threats.”
At this point, it appears likely that Canada will hold a federal election in April or May. This may also impact the economic direction and job market in the months ahead.
The unemployment rate is a measure to understand the economy’s health and the job market.
| CITY AND PROVINCE | JOBLESS RATE JANUARY 2025 % (DECEMBER 2024 %) |
|---|---|
| CANADA | 6.6 (6.7) |
| Barrie, Ontario | 5.8 (6.0) |
| Calgary, Alberta | 7.7 (8.1) |
| Edmonton, Alberta | 7.2 (7.5) |
| Halifax, Nova Scotia | 5.0 (5.1) |
| Hamilton, Ontario | 7.5 (7.3) |
| Kitchener- Cambridge-Waterloo, Ontario | 8.0 (7.6) |
| London, Ontario | 7.0 (7.1) |
| Ottawa, Ontario | 5.8 (5.9) |
| Regina, Saskatchewan | 7.0 (6.8) |
| Saskatoon, Saskatchewan | 4.8 (5.0) |
| Sudbury, Ontario | 5.9 (5.4) |
| Toronto, Ontario | 8.8 (8.4) |
| Vancouver, British Columbia | 6.6 (6.4) |
| Windsor, Ontario | 9.1 (8.9) |
| Winnipeg, Manitoba | 6.3 (6.2) |
Understanding job market trends is vital for newcomers who want to continue their careers in Canada. The growth in full-time jobs in January, with low inflation and falling interest rates, indicates a resilient economy. Employment rates remain stable in the critical 25-54 year-old age group.
Researching job prospects for your profession in Canada is the key to your success. It will make it easier to continue your career if there is a strong outlook for your profession.
Rent and homebuying costs are falling in cities like Toronto and Vancouver. This is also good news for the Canadian economy and newcomers. Choosing a destination city with affordable housing options and strong job prospects will lay the foundation for financial success.
Sources:
Statistics Canada, Scotiabank Economics, Canadian Press, Globe and Mail, Bank of Canada
WRITTEN BY
Steve Tustin
Senior Editor, Prepare for Canada
Steve Tustin is the Editor for Rentals for Newcomers and a contributing editor for Prepare for Canada. He is also the former managing editor of Storeys.com and a former senior editor at the Globe and Mail and the Toronto Star.
© Prepare for Canada 2025
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