Op/Ed: Weak national job numbers last year may mean the same this year

This piece, by ICBA Chief Economist Jock Finlayson, was first published in the Toronto Sun on January 28, 2026.

It’s no secret that Canada’s economy has languished over the past couple of years, with feeble increases in gross domestic product (GDP), outright declines in per-person GDP (an indicator of living standards), sluggish exports and alarmingly low levels of business investment. Needless to say, this pattern of economic weakness is showing up in the job market.

Let’s look at the Canadian labour market last year (most of the figures below are annual averages for 2025 or prior years, as estimated by Statistics Canada).

Job creation takes a step back. In 2025, Canada had roughly 21 million jobs, up 1.4% from the year before. The rate of job creation was noticeably slower than during the 2021-2024 period, confirming that the labour market has lost most of its earlier momentum.

More unemployed people. The number of unemployed Canadians averaged 1.53 million in 2025, up from 1.40 million in 2024 and 1.10 million in 2022. The unemployment rate averaged 6.8% in 2025, compared to 6.3% in 2024 and5.4% the year before.

Fewer job vacancies. The job vacancy rate captures the number of job openings, expressed as a percentage of the economy-wide demand for labour. A higher vacancy rate means employers are having a harder time filling positions, while workers can more easily find a new job. Canada’s job vacancy rate stood at 2.7% in the fall of 2025, down from 3.1% a year earlier. In mid-2021, the rate was near 6%, as the demand for workers surged following the pandemic. Today’s lower job vacancy rate signals a less vibrant economy and labour market.

Employment trends by industry. The data on job creation/job losses by industry shed light on what’s been happening across the economy. In 2025, a few Canadian industries experienced absolute decreases in employment levels: agriculture, forestry, manufacturing, transportation and warehousing, business support services, and a catch-all category that StatCan labels “other”services. Surprisingly, mining and oil and gas production also saw a dip in employment.

Job losses in these sectors were partly due to the confidence-sapping effects of U.S. President Donald Trump’s global trade war and tariffs his administration levied on a handful of Canadian industries.

From 2024 to 2025, Canada recorded net job gains in several broadly defined private sector industries: Professional, scientific and technical services, construction, wholesale and retail trade, finance and insurance, accommodation and food services, information, culture and recreation and utilities.

What about the parts of the economy where governments directly provide services and/or are the dominant source of funding to pay the wages, salaries and benefits of employees? Last year saw a continuation of the post-pandemic trend of outsized government-sector job gains versus more muted growth in private-sector employment.

Specifically, the three principal government sector “industries” — government administration, education and health care and social assistance — all reported job growth in 2025. Across the entire Canadian public sector, payroll jobs expanded by 1.9% versus a 1.3% increase in the private sector. With Ottawa and many provinces now facing sky-high deficits, it’s doubtful that government-funded employment can keep rising at the brisk pace seen in recent years.

If last year was a mediocre one for job creation, 2026 is expected to bring more of the same. Most forecasters see the Canadian economy struggling this year, on the heels of a lacklustre 2025. This suggests that annual employment growth in 2026 is unlikely to surpass 1%.