The Canadian job market experienced a significant slowdown in May 2025, with the unemployment rate climbing to 7.0%—its highest level since 2016 (excluding the pandemic years). According to Statistics Canada’s Labour Force Survey, only 8,800 jobs were added in May, reflecting a 0.0% monthly change and highlighting increasing economic pressures across various sectors and regions.

Key Highlights from May 2025 Labour Force Survey

Employment Levels and Stagnation Canada’s employment level reached 20.98 million in May, showing virtually no change from April. The national employment rate remained steady at 60.8%, matching the recent low seen in October 2024. These figures indicate that employment growth has stalled following a robust hiring period between October 2024 and January 2025.

While full-time employment rose by 58,000 jobs, it was offset by a 49,000 decline in part-time work. This shift suggests that while some stable opportunities are being created, flexible and part-time roles—often vital for students and gig workers—are declining.

Unemployment on the Rise The national unemployment rate increased by 0.1 percentage points to reach 7.0%, continuing a three-month trend. The total number of unemployed individuals rose to 1.6 million, marking a 13.8% increase year-over-year. The average job search duration also rose to 21.8 weeks from 18.4 weeks in May 2024, indicating growing difficulties in securing employment.

Nearly 47% of the unemployed had either not worked in the past year or had never worked at all, compared to 40.7% in the same period last year. These trends point to deepening structural challenges in the labour market.

Industry Trends: A Mixed Performance

Sectors with Job Gains

• Wholesale and Retail Trade: This sector added 43,000 jobs (+1.5%), driven mainly by growth in wholesale trade. This suggests recovering demand for goods and services after previous declines.
• Information, Culture, and Recreation: Employment rose by 19,000 (+2.3%), reflecting a potential seasonal boost tied to summer events and entertainment.
• Finance, Insurance, Real Estate, and Leasing: Continued steady growth added 12,000 jobs (+0.8%), with a net gain of 79,000 positions (+5.6%) since October 2024.
• Utilities: Employment increased by 4,900 (+3.1%), reflecting consistent demand for essential services.

Sectors with Job Losses

• Public Administration: The sector shed 32,000 jobs (-2.5%), returning to baseline levels after temporary hiring for federal elections in April.
• Accommodation and Food Services: Lost 16,000 jobs (-1.4%), highlighting persistent challenges in hospitality and food-related industries.
• Transportation and Warehousing: Also declined by 16,000 jobs (-1.4%), potentially impacted by recent trade tariffs and logistical disruptions.
• Business, Building, and Support Services: This sector experienced a decline of 15,000 jobs (-2.1%), indicating reduced demand in administrative support roles.

Regional Employment Patterns

British Columbia led in job gains with an increase of 13,000 (+0.4%) and maintained a stable unemployment rate of 6.4%. Victoria posted the lowest unemployment rate among major Canadian cities at 3.7%.

Nova Scotia saw employment grow by 11,000 (+2.1%) and its unemployment rate drop to 6.5%. New Brunswick followed with a 7,600-job increase (+1.9%) and a reduced unemployment rate of 6.3%.

Quebec lost 17,000 jobs (-0.4%), reversing gains from April. Meanwhile, Ontario‘s employment remained flat, though its unemployment rate stood at a concerning 7.9%, with Windsor, Oshawa, and Toronto experiencing particularly high rates.

Demographic Insights

Core-Aged Workers (25–54 Years)

• Women: Employment rose by 42,000 (+0.6%), increasing their employment rate to 80.1%.
• Men: Employment declined by 31,000 (-0.4%), pushing their employment rate down to 86.0%, the lowest since August 2018.

Youth (15–24 Years) Employment remained unchanged for the fourth consecutive month. The unemployment rate for youth stood at 14.2%, with returning students facing a significantly higher rate of 20.1%. This is the highest youth unemployment rate for this period since 2009.

Older Workers (55+ Years) Employment among older workers remained stable, showing no major changes compared to previous months.

Student Summer Job Market: A Struggle

The start of the summer job season has proven challenging for students. Returning full-time students (ages 15–24) saw a sharp unemployment rate of 20.1%, similar to 1999 and 2009 levels.

• Young Men: Unemployment rose to 22.1% (+4.1 points).
• Young Women: Faced an 18.4% rate (+2.3 points).

The most common industries for student employment—retail, accommodation and food services, and recreation—also experienced significant declines, particularly hospitality (-66,000 jobs, -22.1% year-over-year).

Wages and Labour Demand

Wages showed moderate growth, with average hourly earnings increasing by 3.4% year-over-year to $36.14. Although total hours worked were unchanged from April, they rose 0.9% from May 2024, indicating a consistent but cautious labour demand.

Conclusion

May 2025 presents a sobering snapshot of Canada’s labour market. Despite isolated sectoral gains, the overall employment picture reveals stagnation and increasing unemployment, especially among students and part-time workers.

The data underscores the need for proactive labour market policies, targeted sectoral support, and regional economic strategies. As Canada navigates a period of uncertainty, government and industry leaders must collaborate to sustain job growth and economic resilience in the coming months.