What happened
A year after the U.S. began its sweeping tariff campaign, Canada's labour market has been stable to the point of standing still, as reported by Talent Canada. Indeed senior economist Brendon Bernard called it "static." Statistics Canada's February labour force survey shows where the damage sits. Manufacturing lost 51,800 jobs over 12 months, the most of any industry, and most of those losses were in Ontario. Goods-producing sectors as a whole are down 34,200 positions.
Services more than made up for it, with a gain of 85,900 jobs. Health care alone added 92,000. But February showed cracks: the survey recorded an 84,000-job loss for the month, led by services. Economists warn that weakness in tariff-hit sectors can spill into services, and Ontario, Quebec and British Columbia are seeing slower services growth. Some caution that the monthly survey is volatile, and a separate payroll survey looked flatter.
The bigger driver of slower job growth is demographics. Canada's population shrank in 2025, the first outright decline on record, and more baby boomers are retiring than young workers are arriving. Bernard expects the labour force to be flat or to fall. Desjardins forecasts unemployment holding near 6.7 per cent in 2026. It sees pockets of hiring in defence and construction. The outlook for manufacturing depends heavily on the coming review of the Canada-U.S.-Mexico trade agreement.
Why it matters if you are hiring
A flat labour market does not mean an easy one. Unemployment can hold steady while the pool of available skilled people gets smaller. Employers in construction, defence-related work and health care are competing for a limited supply of workers.
In manufacturing, the Canadian Chamber of Commerce's Andrew DiCapua flagged that auto-sector contracts often run six or 12 months. More cuts could follow as they roll off. That puts experienced operators, maintenance staff and supervisors on the market in Ontario, and it makes other plants rethink how many permanent hires they can commit to.
Spillover into services also means customer-facing and support roles may see softer demand in the hardest-hit provinces. Monthly job numbers will bounce around a flat trend, so one bad headline is a weak basis for a hiring freeze.
One thing to do this week
Sort your open and planned roles into two lists: those that serve tariff-exposed demand, and those tied to demand that is steady or growing. Hold or stage the first list. For the second, check whether your pay and timelines still match a shrinking pool, because those are the hires that will be hardest to fill.
Traverse has placed operations, manufacturing and skilled professional talent with Canadian employers since 1997, and we help hiring teams reach strong candidates when the pool is tight.