In March 2025, Canada saw its first job loss in three years, with a decline of 33,000 positions, according to Statistics Canada. This setback is largely attributed to ongoing uncertainty surrounding U.S. tariffs, which led businesses to scale back staffing and freeze hiring.
As a result, the unemployment rate rose by 0.1 percentage points to 6.7%. The job cuts were predominantly in full-time positions, following a strong period of growth in the second half of 2024.
The majority of the job losses occurred in the private sector, especially within wholesale and retail, as well as the information, culture, and recreation industries. While Canada largely avoided the wide-ranging tariffs imposed by U.S. President Donald Trump on various goods, both countries recently implemented reciprocal 25% tariffs on certain vehicles crossing the border, after the U.S. imposed tariffs on Canadian steel and aluminum.
Although some of the U.S. tariffs targeting Canadian goods and energy imports were paused, the economic impact continues to be felt. Economists had forecast a slowdown in Canada’s job market for March, following a surge in hiring in December and January, which saw 211,000 new jobs added, before the market plateaued in February.
Andrew Grantham, an economist at CIBC Economics, indicated that the Canadian labor market could be facing serious challenges, as the latest data fell well short of the expected 10,000 new jobs. However, he observed mixed results in sectors most impacted by U.S. tariffs, with employment in transportation and warehousing seeing gains, while manufacturing experienced slight declines.
TD senior economist James Orlando pointed to the political uncertainty surrounding U.S. policies, which has led to caution among both businesses and consumers, contributing to the slower recovery in the job market. Additionally, Canadians who lost their jobs are now taking longer to secure new employment.
The full impact of the tariffs and broader global economic conditions remains uncertain, as analysts continue to monitor the developing situation.
