Canada sheds more than 100,000 jobs in first two months of year

Canadians have lost more than 100,000 full-time jobs since the beginning of 2026, adding pressure on Prime Minister Mark Carney's government as it seeks to shield the economy from the impact of US tariffs on Canada.

Canada's unemployment rate rose to 6.7%, according to the latest labour figures released on Friday - the second-highest among wealthy G7 nations, behind France.

February saw the sharpest drop in employment since the Covid-19 pandemic, wiping out much of the job growth recorded late last year, with the wholesale and retail trade sector taking the biggest hit.

Responding to the report, Carney said US trade actions against Canada are "causing big adjustments in the Canadian economy".

Carney, who spoke to reporters during a visit to Norway on Friday, also noted that wages overall in the country have trended upwards and that the unemployment rate is lower than when he took office in March 2025, when it was 6.8%.

The latest jobs figures were described as worrisome by some economists, while the opposition Conservative party called the report "terrible news".

Conservative leader Pierre Poilievre partly blamed Carney's leadership, noting Canada's weaker economic position among G7 allies.

"It is true that we have global problems and we cannot discount or try to control what President (Donald) Trump does," Poilievre told reporters on Friday. "But all the countries are facing those tariffs. None of them have a shrinking economy like we do under Mark Carney here in Canada."

Poilievre spoke ahead of a trip he is taking to the US, where he plans to have meetings with automotive companies' executives as well as lawmakers to discuss his party's approach to the ongoing Canada-US trade dispute.

Since taking office last year, Trump has imposed tariffs on key Canadian sectors including automobiles, steel, and aluminium, which have resulted in thousands of job losses.

Trump has also imposed separate, broad-range tariffs, including a new worldwide 10% duty, although many Canadian exports have been shielded from them thanks to the long-standing North American trade agreement called the USMCA.

Right now, the future of the USMCA is uncertain. It is undergoing a mandatory review this year and Trump has indicated he may favour scrapping it or carving out separate trade deals with Canada and Mexico.

That uncertainty is a main driver for job figures in Canada taking a "worrisome turn", said CIBC Capital Markets senior economist Katherine Judge.

"This is clearly a very worrisome report...that shows that labour market slack has increased and activity is frozen amidst trade uncertainty," she wrote on Friday.

The US is by far Canada's largest export market, leaving it especially vulnerable to American tariffs. Around three-quarters of Canadian goods were sold to the US, though that share has fallen to about 67% in recent months.