Canada’s unemployment rate rose to 7.0% in May, marking the highest level since September 2016 and signaling continued challenges for job seekers across the country.
The increase of 0.1 percentage points represents the third consecutive monthly rise in unemployment, with the rate climbing a total of 0.4 percentage points since February, according to Statistics Canada‘s Labour Force Survey released Friday.
Employment held steady in May with a modest gain of 8,800 jobs, keeping the employment rate unchanged at 60.8%. However, the job market dynamics reveal underlying weakness as 1.6 million Canadians remained unemployed—a jump of 191,000 people or 13.8% compared to the same period last year.
Job seekers face longer searches
The labour market’s struggles extend beyond the headline numbers. Unemployed Canadians spent an average of 21.8 weeks searching for work in May, up from 18.4 weeks a year earlier. Nearly half of unemployed people in May had not worked in the previous 12 months or had never worked, rising from 40.7% in May 2024.
Only 22.6% of people unemployed in April found work by May, down from 24.0% a year earlier and well below the pre-pandemic average of 31.5% for the same period.
Core-aged men hit hardest
Among core-aged workers, the employment picture varied sharply by gender. Women aged 25 to 54 saw employment rise by 42,000 jobs in May, partially offsetting a significant decline in April. Their employment rate increased to 80.1%.
Core-aged men experienced the opposite trend, losing 31,000 jobs in May. Their employment rate fell to 86.0%—the lowest since August 2018, excluding the pandemic years. The unemployment rate for core-aged men jumped 0.4 percentage points to 6.2%.
Summer job market proves challenging for students
Students face particularly difficult prospects as the summer job season begins. The unemployment rate for returning students aged 15 to 24 reached 20.1% in May, up 3.2 percentage points from the previous year and matching levels last seen during economic downturns in 1999 and 2009.
Young men seeking summer work struggled more than their female counterparts, with an unemployment rate of 22.1% compared to 18.4% for young women.
Industry gains and losses
Wholesale and retail trade led job creation with 43,000 new positions, while information, culture and recreation added 19,000 jobs. The finance sector continued its upward trend with 12,000 additional positions.
Public administration shed 32,000 jobs, offsetting temporary hiring for the federal election in April. Accommodation and food services, transportation and warehousing each lost 16,000 positions.
Regional variations
British Columbia added 13,000 jobs, while Atlantic provinces Nova Scotia and New Brunswick posted gains of 11,000 and 7,600 jobs respectively. Quebec lost 17,000 positions, and Ontario remained virtually unchanged after two months of declines.
Southern Ontario continues to face economic uncertainty linked to potential tariffs on automotive exports. Windsor recorded the highest unemployment rate among major cities at 10.8%, followed by Oshawa at 9.1% and Toronto at 8.8%.
Wage growth remains modest
Average hourly wages increased 3.4% year-over-year to $36.14 in May, matching April’s growth rate. Total hours worked remained unchanged from April but were up 0.9% compared to 12 months earlier.
The employment rate of 60.8% matches the recent low observed in October 2024, reflecting the labour market’s struggle to regain momentum after strong growth from October 2024 to January 2025.
