Actalent Canada Labour Market Report: A Look at Trends in Q1 2026

Employment in Canada declined by 24,800 in January and 83,900 in February, before increasing by 14,100 in March. This resulted in a net loss of 94,600 jobs in the first quarter of 2026, following a net gain of 136,100 jobs in the last quarter of 2025.

By industry, job gains were largely concentrated among information, culture and recreation (+13,900 jobs), and health care and social assistance (+13,200 jobs).

Canada’s labour market remained soft in Q1 2026, marked by slow hiring and elevated economic uncertainty. The Bank of Canada and private‑sector economists pointed to ongoing challenges in trade‑exposed industries, new uncertainties tied to the war in Iran, and structural changes such as shifting trade relationships, AI adoption and demographic trends. Early declines in the unemployment rate were driven largely by fewer people participating in the labour force rather than stronger job growth. Manufacturing employment fell notably, with Ontario particularly exposed given its large manufacturing base. Slower population growth following reduced immigration levels has further weighed on labour force participation. Despite these pressures, layoffs remain low. The layoff rate held steady at 0.7%, in line with pre‑pandemic norms, indicating that current labour market weakness reflects slower hiring rather than widespread job losses. The utilities sector remains a bright spot, with employment up 15% year over year, supported by strong infrastructure investment and sustained demand.

Average hourly earnings for all employees increased 4.0% year-over-year (Q1 2025 to Q1 2026), 0.5% above the growth recorded in Q4 2025. This increase was partly due to a smaller share of lower-paying jobs. Wages for workers in engineering and scientific professional and technical occupations increased 2.0%, lagging the overall average.