Canada Job Market Report: Latest Stats & Trends (MAY 2025)

The May 2025 Canada job market report reveals a second consecutive month of modest employment growth alongside a rising unemployment rate. For people soon to arrive or recently arrived in Canada, knowing how the job market is performing will help you prepare to join the workforce. Discover growth sectors, unemployment rates, and job market performance.

Changes in the Canadian Job Market by Sector

According to Statistics Canada, the job market showed little growth, adding only 8,800 jobs in May, with little change since April.

More employees were hired in the private sector, while hiring declined in the public sector. This decline offset the high (and temporary) public sector hiring in the previous month for the federal election.

Wholesale and retail trade, part of the service sector, led gains by adding 43,000 jobs, indicating a recovery in demand for goods and services. The information, culture, and recreation sector gained 19,000 jobs.

Sectors that saw job gains in May:

Job gains were offset by declines in manufacturing and temporary government jobs from April. Manufacturing continues to face uncertainty due to tariffs on exports to the United States.

These sectors also saw job losses:

• Public administration (-32,000; -2.5%)
• Accommodation and food service (-16,000; -1.4%)
• Transportation and warehousing (-16,000; -1.4%)
• Business, building, and other support services (-15,000; -2.1%)

Job Growth or Decline by Industry: May 2025

Unemployment Rate by Province

Unemployment Rates by City:

The unemployment rate reached 10.8% in Windsor, Ontario, where the automotive industry accounts for 43.1% of manufacturing employment. The trade war is hitting export-dependent sectors harder. The automotive sector is mainly located in Ontario’s manufacturing heartland.

Highlights from the May 2025 Canada Job Market Report

• The wholesale and retail trade sector led job growth, rebounding from losses in March and April.

• Manufacturing saw the greatest employment losses among goods-producing industries.

• Employment rose in British Columbia (+13,000; +0.4%), Nova Scotia (+11,000; +2.1%), and New Brunswick (+7,600; +1.9%).

• Employment decreased in Quebec (-17,000; -0.4%), Manitoba (-5,800; -0.8%), and Prince Edward Island (9-2,700; -2.9%).

• Employment was almost unchanged in Ontario in May following declines totalling 62,000 (-0.8%) over the previous two months. The unemployment rate stood at 7.9% with little change from April.

• The highest unemployment rates in Southern Ontario were in Windsor (10.8%), Oshawa (9.1%), and Toronto (8.8%).

Economist Predictions for the Canadian Job Market

Economists expect the softening job market could persist through the summer in an uncertain trade war.

Derek Holt, Scotiabank’s vice president and head of capital markets economics, said “I’m shocked that Canada’s job market was so strong last month. First, almost everyone was expecting a negative and we got a modest gain of 8,800 jobs.

Second, the gain was despite getting the expected drop in public administration jobs that largely reflected the unwinding of the election effect from the prior month. Public admin jobs fell by 32.2k which is consistent with the past half dozen elections. So, take that out, and underlying job growth was up by 41k. That’s a strong reading.”

Doug Porter, Bank of Montreal chief economist, said, “Overall, our ranking gives this report a passing grade, largely due to the strength in private sector and full-time jobs, but the persistent rise in the jobless rate is a loud warning bell.”

Claire Fan, senior economist at Royal Bank of Canada, stated “Overall, the data is consistent with our view that the labour market is softening, but not collapsing. We expect trade disruptions will keep acting as headwinds, but think further deterioration will be contained with the unemployment rate peaking at levels slightly above May 7.0% reading.”

Tariffs are Impacting the Labour Market

In March, the Donald Trump U.S. administration put tariffs on goods imported from Canada, like steel and aluminum. This action continues to create uncertainty for Canadian businesses and the job market.

Trade tensions are discouraging investment, and a lack of business confidence will impact hiring.

Shifting Immigration Policy

Canada’s labour market will face added pressure due to a shift in policy where immigration targets were lowered for 2025 – 2027. However, the newly elected Liberal government is committed to ensuring immigration changes benefit the economy and jobs. The government will focus on a balanced immigration approach while maintaining Canada’s reputation as a welcoming nation.

Interest Rates, Inflation, and the Canada Job Market

On June 4, the Bank of Canada (BoC) held its interest rate at 2.75%. Many economists predict an interest rate cut in July to stimulate employment and economic growth amid global uncertainties.

BoC aims to keep inflation close to 2%. Inflation dropped to 1.7% in April, down from 2.3% in March. The drop was due to lower energy and gas prices.d

Experts predicted inflation would rise in the short term during the trade war. However, the Bank of Canada warns that a lengthy trade war will cause economic damage and may lead to job losses due to layoffs.

Key factors driving Canada’s recent steady job growth have been lower inflation, interest rates, and a drop in international students and temporary foreign workers.

Key Takeaways

Understanding job market trends is crucial for newcomers seeking to enter Canada’s job market. Newcomers must pay attention to how tariffs, inflation, and interest rates will affect the short- and long-term job market.

With a changing job market, it’s vital to know how your specific industry and occupation will be affected. Researching job prospects for your profession will make it easier to continue your career in Canada.