Canadian Prime Minister Mark Carney
Courtesy Government of Canada / Mark Carney
Statistics Canada has reported Canada’s unemployment rate climbed to 7.1% in August 2025, up from 6.9% in July, as the economy lost 66,000 jobs.
This marks the second consecutive month of job declines and the highest unemployment rate since May 2016, excluding the pandemic period.The job losses, detailed in the latest Labour Force Survey, exceeded economists’ expectations of a 10,000-job gain and a 7.0% unemployment rate, according to LSEG Data & Analytics.
Provincially, Ontario saw the largest drop with 26,000 jobs lost, followed by British Columbia (-16,000) and Alberta (-14,000). The data suggests growing challenges in finding employment, with only 15.2% of unemployed Canadians from July securing work in August, down from 23.3% in pre-pandemic years (2017-2019).
The report coincides with economic pressures from U.S. tariffs, which have strained key industries like manufacturing and trade. Leslie Preston of TD Economics noted that the unemployment rate could have risen further without a 31,000-person decline in the labour force.
The Bank of Canada’s next interest rate decision on September 17 will likely consider this weak labour market data, with markets now favoring a potential rate cut.