Toronto is out and Saskatoon is in—at least for those looking for a robust job market. That’s the take from BMO’s latest labor market rankings of Canada’s 33 largest cities. The country added tens of thousands of jobs, but surging population growth means some cities did worse than others. Places like Toronto saw a sharp erosion of its labor market as its population outpaced its ability to create jobs. More affordable cities like Saskatoon maintained robust population growth, but managed to grow its labor market faster—probably since shelter costs didn’t consume its economy.
Canada Added 10s of Thousands of Jobs, It Just Added More People
Canada’s labor markets had a rocky year, but the country managed to add a lot of jobs. In Q4 2024, the labor market added 156k jobs, and over half (58%) were in December alone. It failed to match population growth, pushing the unemployment rate up 0.9 points over the past year. However, this problem is an extremely region-dependent issue.
“At the city level, the largest unemployment rate increase was in Calgary, coming off tighter levels a year ago,” explains Douglas Porter, Chief economist at BMO.
Adding, “Otherwise, softness continues in southern Ontario as Windsor (9.1%) and Toronto (8.4%) have the highest jobless rates in the country.”
Rising unemployment is generally bad, but it isn’t everything since population growth needs to be factored. BMO analyzed Canada’s 33 largest cities and ranked them by jobs created (if any) and relative growth to the population. That tells a slightly different picture from just job losses.
As the bank noted, Calgary’s unemployment rate climbed 2 points, making it the fastest-eroding market. However, last year’s low rate allowed it to rank 13th in the best-performing job market in Q4 2024, slipping three places from last year.
Toronto Ranks As One of The Worst Job Markets, Canada’s 2nd Highest Unemployment Rate
Meanwhile in Toronto, the country’s largest city and financial capital, things aren’t so rosy. The region dropped 6 spots on the bank’s chart to 26th place—below regions like hard-hit Windsor and Sudbury. Toronto’s unemployment rate fell less than Calgary, but at 8.4%, it’s the second-highest in the country, ranking only behind Windsor. While Windsor has a higher unemployment rate, it ranked two spots above Toronto, as annual growth for its population (+4.5%) was behind growth of employment (+6.5%).
Source: BMO Capital Markets.
Saskatoon Is Canada’s Best Job Market. Seriously.
The highest-ranking regions are unlikely guesses for anyone in the country outside of these places. Topping the list is Saskatoon, where the population growth is behind job growth, and it’s one of just 8 regions where the unemployment rate is lower than last year.
“The overall city performance ranking features Saskatoon, Moncton, Victoria, and Kingston at the top of the pack, pointing to continued growth in relatively more affordable centres,” explains Porter.
It makes a lot of sense in hindsight. Affordability, including the cost of establishing a family, tends to play a direct role in economic growth and, thus, job gains. In economics, shelter costs are considered non-productive, meaning spending more doesn’t help grow the economy. Less money on shelter means more money for consumption and investments, which are considered productive investment areas. This helps create more jobs, and real estate values eventually climb but more sustainably.
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