Job losses were heaviest in manufacturing, a sector of the Canadian economy being slammed by U.S. tariffs.
The latest jobs report from Statistics Canada shows the Canadian economy lost a net 25,000 jobs in January, with the heaviest losses concentrated in the manufacturing sector (which is being targeted by U.S. tariffs and has now shed 51,000 jobs in the past 12 months) and educational services, where 28,000 and 24,000 jobs were lost, respectively. Those losses were partially offset by an increase of 17,000 jobs in information, culture, and recreation, and a gain of 14,000 in support services. Ontario saw job losses of 67,000, while Alberta added 20,000 jobs.
The report was not all bad news, however, as full-time employment rose by 45,000, compared to the loss of 70,000 part-time jobs. Compared to a year ago, Canada has created 134,000 net jobs and 149,000 full-time jobs. Private sector employment dropped by 52,000 in January, following a net gain of 128,000 private sector jobs in Q4 of 2025.
Despite the net job losses, the unemployment rate dropped from 6.8% to 6.5%, as fewer people looked for work. This brings the unemployment rate down to its lowest level since September 2024, indicating that the Canadian economy continues to demonstrate resilience even in the face of ongoing tariffs and threats from our largest trading partner. The youth unemployment rate also dropped from the recent high of 14.6% in September of last year to 12.8% in January 2026. Wages were up 3.3% in January, outpacing the 2.4% inflation rate.
With Canada’s population growth now steady or even negative due to significant reductions in immigration, we may continue to see months in which net job losses are accompanied by small relative shifts in the unemployment rate.
Spencer Fernando
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