Canada’s labour market has suffered a major setback in the first two months of 2026. More than 100,000 full-time jobs have disappeared across the country, raising concerns about the strength of the economy.
The new employment figures have increased pressure on the government of Mark Carney. His administration is already dealing with economic challenges linked to trade tensions with the United States.
According to the latest labour report, job losses have been widespread. Many sectors are now experiencing slower hiring and declining workforce numbers. Economists warn that the situation could affect consumer spending and business confidence.
The job losses come at a time when the government is trying to protect the national economy from the effects of new US tariffs on Canadian goods.
Unemployment Rate Climbs to 6.7 Percent
The latest labour data shows that Canada’s unemployment rate has climbed to 6.7 percent. This marks a noticeable increase compared with recent months.
Among the world’s largest developed economies in the Group of Seven, Canada now has one of the highest unemployment levels. Only France currently reports a higher jobless rate among G7 members.
Rising unemployment indicates that more Canadians are actively searching for work but struggling to find jobs. Analysts say the trend could weaken household incomes and slow economic growth.
Labour market experts also believe that global economic uncertainty is playing a role. Trade tensions and inflation concerns have made businesses more cautious about hiring new workers.
As a result, many companies are delaying expansion plans or reducing their workforce.
February Records Largest Job Decline Since Pandemic
The biggest impact was seen in February. Employment dropped sharply during the month, marking the largest decline since the economic disruption caused by COVID-19 pandemic.
The losses erased a significant portion of the job gains that Canada recorded toward the end of last year. Late-2025 employment growth had raised hopes of a stronger labour market recovery.
However, the new figures show that momentum has slowed dramatically.
The sectors hit hardest include wholesale and retail trade. These industries rely heavily on consumer demand and international supply chains.
When trade tensions rise or consumer spending weakens, these sectors often feel the impact first.
Retail businesses may reduce staff when sales slow. Wholesale distributors may also cut jobs if imports and exports decline.
Government Links Job Losses to US Trade Actions
Prime Minister Mark Carney responded to the latest employment report by pointing to trade measures introduced by the United States.
He said recent US tariffs on Canadian products are forcing companies to adjust their operations. These adjustments are affecting investment, hiring decisions, and supply chains.
According to the prime minister, the trade actions are causing “big adjustments in the Canadian economy.” His government is working to protect industries that rely heavily on exports to the United States.
Economic analysts say the close trade relationship between the two countries means policy changes in Washington can quickly affect Canadian businesses.
Canada sends a large share of its exports to the US market. When tariffs increase, companies may face higher costs or reduced demand.
Experts believe the government may introduce new policies to support affected industries and workers if the labour market continues to weaken.
For now, economists will closely watch upcoming labour reports to see whether job losses continue or the market stabilizes in the coming months.
