Canada Housing Market

Canada’s job market is showing signs of deeper trouble despite strong hiring earlier in the summer. New data from Statistics Canada reveals the country lost 41,000 jobs in July 2025, wiping out much of June’s gains. Even more concerning, the long-term unemployment rate has climbed to its highest level since 1998, while youth unemployment is at crisis levels.

Canada Lost 41,000 Jobs in July, Mostly Full-Time Positions

Employment fell by 0.2% in July, with a loss of 51,000 full-time jobs offset only slightly by an increase in part-time roles. This drop follows a strong June report, when the economy added 83,000 jobs.

The national unemployment rate remained at 6.9%, but this was largely due to fewer people actively looking for work rather than genuine job growth.

Labour Force Participation Falls to Lowest Since March 2025

Canada’s labour force shrank by 33,000 people in July, bringing total participation to 65.2% – the lowest rate in four months. This decline came even as the working-age population grew by 37,600.

Fewer people in the job market can temporarily mask rising unemployment figures, but experts warn it’s a sign of discouragement among job seekers, many of whom have been unemployed for months.

Long-Term Unemployment at 27-Year High

Long-term unemployment — defined as being without work for 27 weeks or more — rose to 23.8% of all unemployed workers in July. This is the highest share since February 1998.

Extended unemployment often results in skills erosion, making it harder for job seekers to re-enter the workforce without retraining. It also increases the risk of people leaving the job market entirely.

Youth Unemployment Reaches Crisis Levels

Young Canadians aged 15–24 have been hit hardest, with employment in this group falling 1.2% (-34,000 jobs) in July. The youth employment rate now sits at 53.6%, its lowest since 1998 (excluding pandemic years).

The youth unemployment rate climbed to 14.6%, and for returning students, the figure is even higher at 17.5% – the worst July since 2009.

A Stagnant Labour Market with No Quick Fix

The Canadian labour market has been stagnant through most of 2025, a slight improvement over last year’s decline. However, the surge in long-term and youth unemployment points to structural challenges that will require more than short-term stimulus to address.

Without targeted retraining programs, youth job creation strategies, and efforts to boost workforce participation, economists warn the country could face long-lasting damage to its employment landscape.

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Source: Canada’s Long-Term Joblessness Hits 27-Year High, Workforce Shrinks – Better Dwelling

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