Canada’s Unemployment Rate Hits 7% in May—Highest Level in Nearly Nine Years Outside Pandemic

Canada’s jobless rate rose to 7% in May, reaching its highest level since 2016 when excluding the COVID-19 years, according to new data from Statistics Canada. This marks the third straight month of rising unemployment, with the number of unemployed Canadians now totaling 1.6 million—nearly 14% higher than a year ago.

Despite no large-scale layoffs, the jump is attributed to stagnant employment growth unable to keep pace with the country’s growing population. Only 8,800 new jobs were added in May, a figure well within the survey’s margin of error (±32,000).

Economists had predicted this uptick, citing pressure from recently imposed U.S. tariffs. Since March, the Trump administration has levied tariffs on Canadian goods, including steel, aluminum, and automobiles, prompting slower job creation and raising investor concerns.

The Bank of Canada warned that these tariffs have created uncertainty, stalling investment and hiring decisions. Unemployment durations have also increased, with the average job seeker now taking 21.8 weeks to find work—up from 18.4 weeks a year ago.

Wage growth for permanent employees remained steady at 3.5% in May, a key inflation indicator monitored by the central bank.

While wholesale and retail sectors showed modest gains, declines in manufacturing and government roles—particularly after temporary election hires ended—dragged overall employment numbers down.