Canada’s labour market showed modest movement in March, with the economy adding 14,000 jobs while the unemployment rate held steady at 6.7 per cent, according to Statistics Canada.
The data shows a pause in momentum following sharper job losses earlier in the year, with economists saying the recovery is not yet firmly established.
Shelly Kaushik, senior economist and vice-president of economics at BMO, said the March increase is too small to signal a clear rebound after significant declines in the previous months.
“The March increase is very small in size following a total 109,000 jobs lost in January-February,” Kaushik said. “So, it’s not large enough to suggest that the labour market is recovering just yet. But if we see further consistent increases, it could be a signal that the market is turning a corner.”
Despite job growth, the unemployment rate remained unchanged because both employment and unemployment increased at the same time.
Kaushik said this reflects movement within the labour force rather than a strong expansion in job opportunities.
“The unemployment rate is the share of the labour force that is unemployed. In the March report, we saw an increase in the number of employed people, but also the number of unemployed people, which kept the unemployment rate steady,” she said.
Wage growth also rose 4.7 per cent year-over-year, but Kaushik said the increase may not reflect a true acceleration in earnings.
She said that short-term statistical effects may have influenced the data, including workers moving into higher-paying roles or remaining employed long enough to receive higher pay.
“The increase was mostly a statistical quirk,” she said. “It’s surprising that those impacts showed up so strongly in one month, but we’ll have to see if this persists before we can say whether it’s indicative of actual wage growth accelerating.”
Sector performance remained uneven across the economy. Job losses in finance, insurance, real estate and leasing were linked to a slowdown in housing activity, particularly in Ontario and British Columbia.
“The housing market has been fairly subdued after years of running hot during the pandemic,” Kaushik said. “Job losses in those sectors are reflecting that slower activity.”
Youth unemployment also remained elevated compared with the national average.
Kaushik said this is partly due to demographic changes and slower job creation following the pandemic.
“There was a large increase in the youth population, including international students, and the economy wasn’t able to create enough jobs at the same pace,” she said. “Some of that gap has narrowed, but progress has been limited, especially as uncertainty in the economy has made employers more cautious about hiring entry-level workers.”
Global and trade-related pressures are also weighing on the labour market.
Kaushik said tariffs have affected industries such as manufacturing, steel, and automotive, while broader trade uncertainty has made businesses hesitant to hire or invest.
“Trade uncertainty makes businesses more hesitant to make big decisions like hiring or investment even if they aren’t directly affected by tariffs,” she said.
Interest rates and inflation continue to play a major role in shaping hiring conditions.
Kaushik said lower rates typically support job creation, while higher rates slow economic activity and reduce hiring demand.
The labour market is expected to remain relatively stable in the near term, but uncertainty around trade and economic conditions continues to limit stronger growth.
“We expect the jobless rate to remain around these levels until there is more clarity on the trade outlook, which will allow businesses to move forward with hiring and investment plans,” she said.
Mihir Maldikar, a part-time worker at the Loblaws grocery store in Toronto, said the job market feels more competitive on the ground despite the official data showing stability.
“I’ve applied to so many jobs and it’s really hard to get responses,” Maldikar said. “Even entry-level roles ask for experience now, and it feels like there are fewer opportunities than before.”
Maldikar said that it's been two years since his graduation and he is still searching for a job in his field.
“Last year I could at least get interviews, but this year it’s been mostly rejections or no responses at all,” he said.
Maldikar said that it’s so stressful for me to think every day about my future in Canada.
“It honestly feels stressful because you’re doing everything right, but there just aren’t enough openings,” he said. “A lot of people around me are starting to worry about what happens if they don't get a job before finishing their work permit.”
Kaushik said while the official data shows stability, the student experience shows a more competitive and uneven job market, especially for younger Canadians entering the workforce.
