Full Breakdown
August Job Losses Mark First Decline in Four Months for Canada
9/7/2026, 11:19:27 AM
Core Event: Labour Market Contraction in August
Statistics Canada reported that Canada shed 42,000 jobs in August, ending a four-month streak that had added a total of 181,000 positions. The unemployment rate remained at 6.4 percent. Full-time employment fell by 35,900 jobs and part-time work by 5,800, with the public sector losing 20,000 jobs for the third consecutive month.
Background & Context: Trade Tensions and Prior Gains
The decline arrived amid heightened trade uncertainty after the United States imposed 50 percent tariffs on roughly $28 billion of Canadian goods in mid-August, prompting Canada to respond with matching dollar-for-dollar tariffs on comparable U.S. imports. From April through July, the labour market had posted strong gains, adding 75,000 jobs in July alone and 181,000 jobs over the four-month period.
Data & Statistics
- Job loss: 42,000 total (35,900 full-time, 5,800 part-time).
- Sector performance: Manufacturing added 22,000 jobs; business support services, public administration, natural resources and utilities recorded declines.
- Regional impact: Quebec lost 19,000 jobs; Ontario lost 18,000.
- Wage growth: Average hourly wages rose 2.0 percent annualized, the slowest pace in nearly nine years, down from 2.8 percent in July and 3.3 percent in June.
- U.S. comparison: The U.S. Labor Department reported 162,000 jobs added in August, with the unemployment rate steady at 4.1 percent.
Official Statements & Responses
- CIBC chief economist Andrew Grantham said the August print aligns with other evidence of a slowdown in the third quarter and reflects “heightened uncertainty regarding U.S. trade.”
- Bank of Montreal chief economist Douglas Porter described the report as a “soft” reality check but not a shock.
- Scotiabank economist Mitch Villeneuve noted that the share of Canadian exports bound for the United States is gradually declining, falling to 66 percent in July 2026 projections, driven by faster growth in non-U.S. markets.
- Bank of Canada Governor Tiff Macklem characterized the U.S. tariffs as “very steep” but affecting a “relatively narrow” set of goods.
- The federal government has introduced a $7.5 billion expanded relief program for affected workers and businesses, on top of nearly $25 billion in tariff-related support over the past 18 months. Economists anticipate the central bank will keep its policy rate at 2.25 percent through the remainder of the year.
Verbatim Quotes
- “After a run of surprisingly hearty job results, it seemed Canada was almost due for a reality check. So while this is no doubt a soft report, it's far from a shock,” — Bank, of Montreal chief economist Douglas Porter
