Canada’s unemployment rate rose 0.3 percentage points to 6.8 per cent in December 2025, Statistics Canada reported on January 9, 2026, as a wave of new job seekers outpaced modest hiring. Employment was little changed, up 8,200, while the number of unemployed people grew by 73,000 to 1.6 million.
More people looking for work
The December Labour Force Survey shows the jobless rate climbing not because employers were cutting staff, but because Canadians went back to looking for work. The labour force expanded by 81,000 in the month and the participation rate rose 0.3 percentage points to 65.4 per cent. The employment rate held steady at 60.9 per cent, and the rise in unemployment partly reversed a cumulative decline of 0.6 percentage points over the previous two months, the agency said.
Full-time employment rose by 50,000 in December, offset by a drop of 42,000 part-time jobs. Wages kept growing faster than inflation: average hourly pay was up 3.4 per cent year over year, rising $1.23 to $37.06, following growth of 3.6 per cent in November.
Young workers hit hardest
The month’s weakness landed mainly on the young. Employment among youth aged 15 to 24 fell by 27,000, and the youth unemployment rate rose half a percentage point to 13.3 per cent, undoing part of the improvement seen in October and November, when youth employment had jumped by 70,000.
Older workers moved the other way. Employment among people aged 55 and older rose by 33,000, and their unemployment rate eased to 5.1 per cent. Among core-aged workers, 25 to 54, unemployment rose 0.4 points for both men, to 6.0 per cent, and women, to 5.9 per cent.
Winners and losers by industry and province
Health care and social assistance added 21,000 jobs in December, building on a strong November, while “other services” such as personal and repair services gained 15,000. Employment fell in professional, scientific and technical services, down 18,000, as well as in accommodation and food services, down 12,000, and utilities, down 5,300.
Quebec added 16,000 jobs, its first significant gain since June, though its unemployment rate also rose to 5.4 per cent as more people searched. Alberta shed 14,000 jobs and Saskatchewan 4,000. In Ontario, employment was little changed for a second straight month, but with more Ontarians looking for work the provincial rate jumped 0.6 points to 7.9 per cent — the highest among the large provinces.
A soft year, in context
December capped a difficult year for the labour market. Statistics Canada attributes much of 2025’s weakness to the uncertainty created by the threat and imposition of U.S. tariffs on Canadian exports. From January to August there was virtually no net employment growth, and the unemployment rate reached 7.1 per cent in August — the highest since May 2016, outside the pandemic years. Hiring recovered in the fall, with 181,000 jobs added from September to November, before stalling again in December.
Economists read the latest number as a pause rather than a collapse. “Today’s data demonstrate that the sharp move lower in unemployment during the preceding month was partly flattered by a decline in labor force participation,” said Andrew Grantham, senior economist at CIBC Capital Markets. The agency’s own figures support the softer interpretation: layoff rates through 2025 stayed in line with historical averages, while the problem was slower hiring — between January and August, only 18.1 per cent of job seekers found work each month, down from 24.0 per cent before the pandemic.
