Ottawa: Canada has lost more than 100,000 full-time jobs since the beginning of 2026, raising concerns about the country’s economic outlook and increasing pressure on Prime Minister Mark Carney as his government attempts to protect the economy from the impact of US tariffs.
According to the latest labour market data released, Canada’s unemployment rate has climbed to 6.7 percent, making it the second-highest among G7 nations, behind France. The figures show that February recorded the sharpest employment drop since the COVID-19 pandemic, reversing much of the job growth seen toward the end of last year.
The wholesale and retail trade sector experienced the biggest decline in employment during the month, reflecting slowing business activity and weakening consumer demand.
Trade tensions driving economic adjustments
Speaking to reporters during a visit to Norway, Carney acknowledged that trade tensions with the United States are having a noticeable impact on the Canadian economy. Carney said US trade measures against Canada are causing big adjustments in the Canadian economy.
However, Carney pointed out that wages in Canada have generally been rising and noted that the current unemployment rate remains slightly lower than when he took office in March 2025, when it stood at 6.8 percent.
Opposition criticises government response
The latest labour figures drew criticism from the opposition Conservative Party. Conservative leader Pierre Poilievre described the report as terrible news, arguing that Canada’s economic performance has lagged behind other G7 nations.
Poilievre acknowledged that global economic pressures exist but said Canada’s situation reflects domestic leadership challenges. Poilievre also referenced tariffs introduced by Donald Trump, noting that while many countries face similar trade pressures, Canada’s economic slowdown has been more severe.
Poilievre made the remarks before departing for a trip to the United States, where he plans to meet with automotive industry executives and lawmakers to discuss his party’s strategy regarding the ongoing Canada–US trade dispute.
Tariffs hitting key Canadian industries
Since returning to the presidency last year, Trump has imposed tariffs on several major Canadian export sectors, including automobiles, steel, and aluminium. These measures have contributed to thousands of job losses across manufacturing and related industries.
The United States has also introduced broader global tariffs, including a 10 percent duty on imports worldwide. However, many Canadian exports remain partially protected under the United States–Mexico–Canada Agreement (USMCA).
Uncertainty over North American trade pact
The future of the USMCA remains uncertain as the agreement faces its mandatory review this year. Trump has suggested he may consider scrapping the deal or negotiating separate bilateral agreements with Canada and Mexico.
Economists warn that the uncertainty surrounding the trade framework is affecting business confidence and hiring decisions.
Heavy reliance on US market
The United States remains Canada’s largest export destination. Historically, about three-quarters of Canadian goods were sold to the US, though that share has recently declined to around 67 percent. Economists say this heavy dependence leaves Canada particularly vulnerable to shifts in US trade policy, especially when tariffs target key industrial sectors.
As trade negotiations and economic uncertainties continue, policymakers face mounting pressure to stabilise the labour market and diversify Canada’s export markets.
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