Canada’s unemployment rate rose to a six-month high in April to 6.9 per cent as the economy lost a net of 17,700 jobs in March, Statistics Canada data showed on Friday, indicating a continued weakness in the labour market which has struggled in the face of U.S tariffs and trade uncertainty.
Analysts polled by Reuters had predicted net job gains of 15,0000 and the unemployment rate of 6.7 per cent, almost mirroring the month of March when employment rose by 14,100 and jobless rate was the same.
The Bank of Canada said in its Monetary Policy Report last month that indicators such as the employment rate, hours worked and job vacancies suggest slack, or underutilized capacity, in the labour market, although layoffs remain modest.
The looming uncertainty around the future of the North American free trade deal and the knock-on impacts of the higher prices from the Iran war has continued to layer over the impact of U.S. tariff on the economy for over a year.
The job losses were completely concentrated in full-time jobs which lost a net of 46,700 people, offset only by a gain of 29,000 jobs in the part-time sector.
The net overall decline in employment over the first four months of 2026 was concentrated in full-time work, which fell by 111,000 between January and April, StatsCan said.
Average hourly wages of permanent employees, a metric closely tracked by the BoC to gauge rise in inflation expectations, grew 4.8 per cent from a year earlier, versus 5.1 per cent in March.
The participation rate - the portion of the population over the age of 15 that is economically active - edged up to 65 per cent in April from 64.9 per cent in the prior month, Statscan said.
A higher participation rate along with a higher unemployment rate indicates more people were searching for work in the economy.
The unemployment rate among the core-aged workforce of 25-54 year-olds as well as among the youth increased to 6 per cent and 14.3 per cent respectively.
The goods-producing sector, which is the most exposed to U.S. tariffs, saw employment drop by 26,800 jobs in April, while the services sector, where four out of every five people are employed in Canada, reported a 9,100 job gain.
A Reuters poll suggests economists expect the economy added 15,000 jobs in the month, while the unemployment rate remained unchanged at 6.7 per cent, according to LSEG Data & Analytics.
Employers added 14,000 jobs in March as the unemployment rate held steady.
The jobs report comes as Canadian businesses deal with high oil prices caused by the war in the Middle East that has pushed the cost of gasoline up across the country.
The report also follows the Bank of Canada’s decision last week to hold its policy interest rate at 2.25 per cent.
The central bank noted it was closely monitoring the impact of the war and how the economy continues to respond to U.S. tariffs and trade policy uncertainty.