JOBS AND UNEMPLOYMENT: 1)(Updated) Unemployment rate climbed to 7.1 per cent in August as economy lost 66,000 jobs; 2)Teenage workers hit hard by tech disruption, population growth: Desjardins

1)(Updated) Unemployment rate climbed to 7.1 per cent in August as economy lost 66,000 jobs

Courtesy Barrie360.com and Canadian Press

By Craig Wong, September 5, 2025

The Canadian economy lost jobs for the second month in a row and the unemployment rate climbed to its highest level since May 2016, excluding the pandemic period, Statistics Canada reported on Friday.

The weaker-than-expected reading of the labour market prompted financial markets to increase the odds the Bank of Canada will cut its key interest rate target later this month.

The unemployment rate ticked up to 7.1 per cent in August as the economy lost 66,000 jobs for the month. The monthly jobs report comes after the July labour force survey that showed a loss of 41,000 jobs and an unemployment rate of 6.9 per cent.

A poll of economists heading into the release had expected August to show a gain of 10,000 jobs and the unemployment rate to rise to seven per cent for the month, according to LSEG Data & Analytics.

Leslie Preston, managing director and senior economist at TD, said the unemployment rate has now risen half a percentage point since the start of the year, but noted it could have been worse.

“Looking at that unemployment rate of 7.1 per cent, it would be even higher if we weren’t simultaneously having a slowdown in labour force growth,” she said. 

“We had 31,000 fewer people in the labour force this month. So if we hadn’t had that, the unemployment rate would be even higher.”

The Canadian economy has been under pressure from the tariffs imposed by U.S. President Donald Trump. 

While exporters have been adapting to ensure their goods are eligible to enter the U.S. tariff-free under the Canada-U.S.-Mexico Agreement on trade, the steel, aluminum and auto sectors continue to face specific tariffs.

Royal Bank senior economist Claire Fan said the trade dispute is taking its toll on Canadian labour markets.

“The worsening trend in the summer also mirrors condition south of the border — job growth in the U.S. largely ground to a halt since May and the unemployment rate has also edged higher,” Fan wrote in a report.

While the weak job numbers help make the case for rate cuts, the August inflation figures to be released on Sept. 16, the day before the next Bank of Canada interest rate decision, are expected to weigh heavily on the policymakers at the central bank.

Preston said TD’s expectation is that the Bank of Canada will cut its key interest rate by a quarter of a percentage point twice by the end of the year, but the timing of that is less clear.

“The Bank Canada did act somewhat pre-emptively early in the year, cutting interest rates two times, and they’ve been on hold since then. They are wary of doing too much and potentially kicking off a bout of higher inflation,” she said.

Thomas Ryan, North America economist at Capital Economics suggested the jobs report makes a September rate cut by the Bank of Canada “almost certain.”

“A September cut from the Bank of Canada looks almost nailed on, with the prospect of another cut before the end of the year looking increasingly likely too,” Ryan wrote in a report.

Statistics Canada said Friday there were 60,000 part-time jobs lost in August, while the economy shed 6,000 full-time jobs. 

Employment fell across several industries in August.

The professional, scientific and technical services industry lost 26,000 jobs, while transportation and warehousing lost 23,000 positions and the manufacturing sector lost 19,000 jobs.

The construction industry added 17,000 jobs.

Average hourly wages rose 3.2 per cent on a year-over-year basis in August, following a year-over-year gain of 3.3 per cent in July.

The Bank of Canada’s next interest rate decision is set for Sept. 17.

2)Teenage workers hit hard by tech disruption, population growth: Desjardins

Courtesy Barrie360.com and Canadian Press

By Craig Lord, September 4, 2025

A report argues the rise of gig work, artificial intelligence and rapid population growth are souring job prospects for Canada’s youngest workers.

The Desjardins Economics report, released Thursday, comes as Conservative Leader Pierre Poilievre cites decades-high youth unemployment levels to attack an immigration program for temporary foreign workers.

Statistics Canada’s latest labour force survey shows the unemployment rate for young people aged 15 to 24 hit 14.6 per cent in July — a nearly 15-year high outside of the COVID-19 pandemic.

The Desjardins report said that the recent rise in youth unemployment is more typical of recessions.

Drilling down deeper into the youth cohort, StatCan said returning students aged 15 and 16 faced an unemployment rate of 31.4 per cent in July, the height of the summer jobs market.

Desjardins economist and report author Kari Norman said she sees the stress of the tough summer labour market at home.

“I’ve seen my own kids and my friends’ kids struggle with finding summer jobs, co-op placements, anything like that,” she said.

Poilievre on Wednesday described young people in Canada as “generation screwed” for their lack of job opportunities. He blamed Ottawa’s temporary foreign worker program for competing with youth for scarce job openings and called on the Liberals to scrap the regime.

Prime Minister Mark Carney said Wednesday that he is committed to reducing immigration but is not scrapping the temporary foreign worker programs, citing provincial support for the initiative. He opened the door to further adjustments to Canada’s overall immigration plan.

LJ Valencia, another of the Desjardins report’s authors, said that much of the current situation traces back to the COVID-19 pandemic recovery — when businesses were hungry for labour and Ottawa ramped up the inflow of foreign workers and loosened restrictions on international students to meet the demand.

“Job opportunities are declining because the economy can’t keep up with this state of population growth we’ve seen over the past few years,” he said.

But Desjardins also finds that it’s these young international students, or the children of recently arrived workers now old enough to enter the labour force themselves, who are disproportionately struggling to find work today, compared to those born in Canada.

The Liberal government has enacted plans to slow the pace of population growth and limit the number of non-permanent residents in future years.

Desjardins’ economists say that these targets, if achieved, would help to bring supply and demand back into better balance in the youth labour market.

“Reducing the number of youth through tightening immigration both in international students and other newcomers should soften the blow a little bit and help the youth that are still here find the jobs that are available to that age cohort,” Norman said.

But other aspects of the modern economy are also conspiring to put pressure on young workers.

The rise of the gig economy — app-based and often precarious work — comes with barriers aimed at the youngest workers, Desjardins notes in the report.

Age restrictions on these apps can limit participation to those aged 18 and older. As a result, Normand said, kids who previously got paid for doing chores like walking dogs in their neighbourhood may be increasingly shut out from that early work experience due to the digital shift.

“My youngest in particular would love to get a job walking dogs, cat sitting, that kind of thing, but at 16, just isn’t eligible,” she said.

The rise of artificial intelligence and generative AI applications could also be creating a barrier.

Desjardins cites a Stanford University study published last week that found while core-working-age U.S. workers have so far faced minimal job disruption from AI, youth are starting to see employment losses. Valencia argued that could be the result of fewer entry-level job opportunities.

Norman offers the example of an AI tool that’s good at finding legal case studies for a law firm. If a firm outsources that kind of work, which it normally would give to a young clerk, that can frustrate aspiring lawyers’ efforts to get a foot in the door.

Whether youth unemployment starts to recover from here could depend on where the wider economy heads next, Valencia said.

As the economy continues to strain under the weight of U.S. tariffs and broader trade uncertainty, surveys from the Bank of Canada show businesses are reining in their hiring intentions.

Valencia said such shifts tend to have a pronounced effect on youth, who are often first to feel an economic contraction in their job prospects.

He said if Canada secures a new trade deal with the United States in the coming months, or if Ottawa finds other ways to restore certainty and encourage business investment, that could open up opportunities for youth again.

Norman said if youth are unable to get work experience in their teenage years, they may be forced to fund their post-secondary education solely with debt, hampering their future financial prospects. She called for a co-ordinated response from provincial and federal governments to support the transition of young people from high school to the workforce, the trades or future schooling.

“This is the future of our labour force right here,” Valencia said.

“And if they’re restricted from, or they’re hampered by, the lack of job opportunities and the lack opportunities for career development, that has a lot significant structural effects on the economy looking towards the future.”