Photo of Vicko Fidelis in Unsplash
Canada's unemployment rate climbed to 7.1% in August, reaching its highest level since May 2016 outside of the pandemic. The economy lost approximately 65,500 jobs, mostly part-time, impacting sectors such as transportation, manufacturing, and professional services.
The origin of unemployment?
Economists attribute this deterioration to the trade conflict with the United States, whose imposition of tariffs on steel, aluminum, and vehicles has dampened Canadian business confidence, investment, and exports. In April, unemployment had already risen to 6.9 percent, coinciding with the implementation of these tariffs.
Furthermore, an Ontario government assessment projects that if tariff tensions continue, the provincial unemployment rate could reach 7.7 percent, with more than 68,000 job losses in 2025 and up to 119,200 in 2026, especially in manufacturing and related sectors.
Government responses
Prime Minister Mark Carney launched a "Buy Canadian" strategy, with a $3.6 billion fund to support local businesses and prioritize Canadian suppliers in government purchases, seeking to offset the impact of U.S. tariffs.
Youth in the spotlight
Young Canadians are facing one of the worst job crises in decades: the youth unemployment rate reached 14.5% in August, nearly the same level as July, attributed to the economic downturn and damage to sectors such as retail and hospitality.
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