What happened
Canada's labour market is becoming more uneven, according to a new 2025 labour market review from the C.D. Howe Institute, as reported by Talent Canada. Authors Parisa Mahboubi and Tingting Zhang point to trade tension, weak productivity growth, demographic change and technological disruption all hitting at once.
The report says roughly 13 per cent of Canadian employment, about 2.6 million jobs, depends on U.S. demand. That uncertainty, Mahboubi says, discourages firms from expanding, hiring and investing in productivity-enhancing technology. The upcoming CUSMA review is named as one of the pressure points.
The strain is not shared evenly. Young workers face some of the weakest conditions in years, with softer entry-level hiring and longer spells of unemployment. More than one-third of recent immigrants with post-secondary education are in jobs below their qualification level. Newfoundland and Labrador was the only province with net job losses, while Ontario and British Columbia saw the largest drops in employment rates compared with 2024.
The authors call for better federal-provincial coordination on trade risk, stronger support for youth employment and immigrant integration, fewer barriers to labour mobility between provinces, and policies that restore productivity growth.
Why it matters if you are hiring
A headline jobs number will not tell you how hard your next search will be. Conditions differ by region, sector and seniority.
If your business sells into the U.S., expect pressure on hiring budgets and on the roles tied to export volume. Those are the jobs the report flags as most exposed. Hiring managers there will be weighing every requisition against CUSMA uncertainty.
On the supply side, the picture is mixed. Entry-level candidates are plentiful and struggling to land roles, and the report notes growth is concentrating in higher-skill occupations. Skilled, experienced people are harder to find and will be competed for. Many newcomers with strong credentials are working below their level, which means qualified talent may be sitting in roles you would never think to search.
In Ontario, where employment rates fell more than in most provinces, employers may find candidate pools looser than a year ago for some roles, but not for the scarce skills that drive productivity.
One thing to do this week
Split your open and planned roles into two lists: those tied to U.S. demand, and those that would raise productivity, such as automation, data or process improvement. Decide which list gets priority if budgets tighten, and review whether your screening reads past job titles for internationally trained candidates.
Traverse helps Canadian employers find experienced operations, finance and technical people across regions and sectors, including candidates whose credentials are stronger than their last job title suggests.