I knew something was up when three different tech founders mentioned pulling back on hiring during the same week. As it turns out, they were early indicators of a broader economic shift that Statistics Canada confirmed this morning—Canada’s job market is cooling after a period of resilience.
According to the latest Labour Force Survey, Canada’s unemployment rate ticked up to 6.9% in April 2025, marking a 0.3 percentage point increase from March. The economy added just 7,400 jobs last month, substantially below economists’ expectations of roughly 20,000 new positions.
“We’re seeing the cumulative impact of higher interest rates finally working through the system,” explains Beata Caranci, Chief Economist at TD Bank, whom I spoke with shortly after the data release. “The labor market typically lags other economic indicators, and we’re now witnessing that lag play out.”
What’s particularly telling is where the job losses occurred. The technology sector shed 11,300 positions, while manufacturing lost 8,200 jobs. These losses were offset by gains in healthcare (12,600 jobs) and public administration (9,800 jobs), suggesting government spending is helping cushion the slowdown.
The picture looks different across provinces, too. Alberta’s unemployment rate jumped to 7.8%, up from 7.2% in March, likely reflecting ongoing challenges in the energy sector despite relatively stable oil prices. Meanwhile, Quebec’s jobless rate held steady at 5.8%, making it the province with the lowest unemployment figure.
For everyday Canadians, these numbers translate to real kitchen table concerns. When I reached out to Melissa Chen, a project manager who was laid off from a Toronto tech startup last month, she described a shift in the job market. “Last year, I’d have had three offers within weeks. Now I’m seeing fewer postings, longer interview processes, and companies freezing roles midway through recruitment.”
The Bank of Canada is undoubtedly watching these numbers closely. After holding its key interest rate at 3.75% in its last decision, many analysts now expect the central bank might accelerate its rate-cutting cycle. The Bank has been cautious about inflation, which came in at 2.3% in March, but softening employment could tilt their priorities.
“The Bank faces a tricky balancing act,” notes economics professor Armine Yalnizyan from Atkinson Foundation. “They want to bring inflation fully under control without tipping the economy into a recession. Today’s numbers suggest they might need to move more quickly on rate cuts.”
For job seekers, this changing landscape means adjusting expectations and strategies. Career counselors are advising candidates to broaden their search criteria and consider adjacent industries where their skills might transfer.
The tech sector’s pullback is particularly noteworthy given its role as a growth engine in recent years. After the post-pandemic hiring spree and subsequent correction in 2023, many hoped the sector had found its equilibrium. However, recent announcements from companies like Shopify, which revealed plans to trim 5% of its workforce last month, suggest otherwise.
“We’re not seeing 2022-style mass layoffs,” explains Jermaine Peters, partner at venture capital firm Northland Ventures. “It’s more about companies becoming incredibly selective about new hires and focusing on efficiency. The ‘growth at all costs’ era is firmly behind us.”
Wage growth has also moderated, with average hourly earnings up 3.8% year-over-year, down from the 4.5% pace seen in January. This could help ease the Bank of Canada’s inflation concerns but also suggests workers’ bargaining power may be waning.
The participation rate—the percentage of working-age Canadians either employed or actively seeking work—dipped slightly to 65.1% from 65.3%. This small decline bears watching, as it could indicate some job seekers are becoming discouraged and leaving the labor force entirely.
