Canadian employment wasn’t impressive last month, but it was the best Labour Force Survey (LFS) of 2026. Statistics Canada (StatCan) data shows minor job growth, with unemployment unchanged in March. The AI and trade war job cuts that everyone fears? It turns out employment is stabilizing, layoffs are lower than expected, and heck—wages are even growing.
Canada’s Job Growth Remains Anemic, But The Bleeding Stopped
Seasonally adjusted employment climbed 0.1% in March, adding 14.1k jobs to hit 21.05 million. This follows the sharp 0.5% (-109.0k jobs) drop in the first two months of 2026. In absolute numbers, the growth is enough to stop the bleeding, but employment remains much weaker than it started 2026.
Over the past year, Canada has only managed to grow employment by 0.4% (+87.0k jobs). Not impressive by any measure, but stronger than the fallout presented by policymakers in the face of a US-led trade war.
Canada Has A Hiring Problem, Not An Issue of Layoffs
Canada’s seasonally adjusted unemployment rate remains 6.7%, after a 0.2 percentage point jump in February. It’s easy to assume these are layoffs in response to the trade war or artificial intelligence, but the data doesn’t support that narrative either.
The layoff rate—the share of previously employed workers who lost their jobs—came in at 0.6% in March. The agency notes it’s “comparable” to the 0.7% rate last year, matching the pre-pandemic average from 2017 to 2019. However, they’re selling this short. The difference between 0.6% and 0.7% may not sound like much, but it works out to 1,000 fewer people laid off per million. To be blunt, that’s 21k fewer layoffs than would be expected on average, suggesting the layoff narratives may be overstated.
However, those looking for a job are sh*t out of luck. Just 15.2% of those unemployed in February found a job in March, significantly lower than the 19.1% pre-pandemic average from 2017 to 2019. This indicates higher unemployment rates relative to pre-pandemic are a story of weaker hiring, not one of layoffs.
Canada Sees Average Wage Growth Surge, But There’s A Catch
One would assume slow hiring means lower wage growth, but not the case, according to StatCan. The agency notes annual growth of average hourly wages for employees increased 4.7% in March, the highest rate since October 2024. This breaks the persistent trend where year-over-year growth was range-bound between 3.2% and 3.9% for over a year prior to this report. However, there’s a catch in the composition of the measure.
This average hourly wage surge is due in part to a composition shift in employment. When adjusting for occupation and job tenure, average hourly wage growth falls to 3.6% over the same period, mirroring the adjusted rates seen in the first two months of the year.
StatCan doesn’t dive into the details, but some signs don’t take much digging to figure out. Over the past year, full-time employment has grown while part-time gigs have fallen. A tenure shift is likely amplified by employment being concentrated towards senior employees, resulting in fewer young workers bringing the average down and more senior workers dragging it higher. For context, the same data shows senior workers aged 55 and older saw wage growth of 5.2% y/y, while it remained just 1.8% for workers aged 15 to 24.
The latest LFS data reveals Canadians aren’t facing a wave of layoffs as the narrative suggests, but rather a severe lack of hiring. This is ultimately a matter of business confidence, with companies holding off on new hires amid uncertainty. It’s a problem that has only been amplified by the Bank of Canada telling business leaders the old economy is dead, urging them to radically restructure their operations. A declaration that appears to have frozen businesses instead of motivating them to make big bets.
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