Report highlights the importance of strengthening interprovincial trade and building new trade partnerships.
With the Canadian economy showing decent resilience over the past year and the unemployment rate recently dropping, a new report (based on data from before the recent drop in the unemployment rate) from Statistics Canada shows a growing divergence between sectors dependent on the U.S. and sectors dependent more on Canadian demand.
According to the report, employment in sectors such as construction, utilities, food manufacturing, wholesale trade, real estate, health and social services, education, and public administration increased by 0.2% betwen December 2024 and August 2025, for a total job gain of 38,100.
In sectors more dependent on trade with the U.S., like oil and gas extraction, primary metal manufacturing, truck transportation, transportation equipment manufacturing, and chemical manufacturing, employment fell by 1.4%, for a total job loss of -18,100.
Statistics Canada also noted that “Employment losses in trade-dependent industries had already started in 2024, prior to the introduction of the tariffs, but accelerated in early 2025 as trade tensions escalated.”
Despite pressure from tariffs, layoffs remain within historic norms: “The economy-wide layoff rate—which can be calculated from the Labour Force Survey—was unchanged, at 0.6%, in October, compared with 12 months earlier. The layoff rate for the corresponding month from 2017 to 2019, prior to the pandemic, was also 0.6% and deviated only slightly from the same period in 2023 and 2024.”
A foundation, or a ceiling?
Heading into 2026, a key question is whether Canada’s economic resilience in 2025 represents a solid foundation for new economic growth, or whether it represents a ceiling – an economy barely holding together before declining.
Which way it goes will depend in large part on whether we can continue to open up trade within Canada’s borders and deepen trade partnerships with the European Union, India, Japan, South Korea, South American nations, and others. A key goal for the year ahead will be rebalancing our economy in a way that maintains growth while reducing our overdependence on the U.S.
Spencer Fernando
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