Tariffs Take a Toll: Manufacturing Jobs Plunge as Canadian Economy Slows
April’s Labour Force Survey paints a sobering picture of Canada’s job market, with clear signs that tariffs are starting to take a toll—especially in manufacturing.
Slowing Job Growth
Employment remained virtually unchanged in April, up just 7,400 jobs following a decline in March. The national unemployment rate rose to 6.9%, the highest level since late 2024 (excluding the pandemic years), with nearly 190,000 more people unemployed compared to a year ago. Notably, more Canadians are struggling to find work after being laid off.
Manufacturing Hit Hard
The biggest blow came to Canada’s manufacturing sector, which lost 31,000 jobs in April—its sharpest decline since November 2024. Ontario, Canada’s manufacturing hub, saw a staggering 3.9% drop, particularly in export-reliant industries like auto, steel, and aluminum.
This comes as early evidence suggests tariffs are weakening economic momentum. Workers in these sectors are also more likely to expect layoffs, signaling growing anxiety about job security.
Other Sector Shifts
- Public Administration saw a temporary bump (+37,000) tied to the federal election.
- Finance, Insurance & Real Estate gained 24,000 jobs, continuing a trend of steady growth since late 2024.
- Wholesale and Retail Trade declined again, shedding 27,000 jobs in April.
Wage Growth and Work Hours
Despite weak job growth, total hours worked rose 0.4%, and wages climbed 3.4% year-over-year to an average of $36.13 per hour.
What’s Next?
Economic uncertainty is prompting caution among both employers and job seekers. The central bank is expected to respond to the slowdown, with markets pricing in a possible 25 basis point interest rate cut on June 4.
For now, the April report confirms what many have feared: trade tensions are slowing hiring, unsettling key sectors, and dampening confidence across the labour market.
