Canada's Unemployment Rate Climbs to 6.7% in February 2026
Canada's labour market faced headwinds in February 2026, with the unemployment rate rising to 6.7% as employment declined across multiple sectors. Statistics Canada's latest Labour Force Survey reveals significant challenges that could impact newcomers and established workers alike.
| Key Metric | February 2026 | Monthly Change | Year-over-Year |
|---|---|---|---|
| Unemployment Rate | 6.7% | +0.2 pts | +0.1 pts |
| Employment Rate | 60.6% | -0.2 pts | -0.4 pts |
| Employment Change | -84,000 jobs | -0.4% | Little changed |
| Average Hourly Wage | $37.56 | +3.9% YoY | +$1.42 |
| Participation Rate | 64.9% | -0.1 pts | -0.4 pts |
Employment Losses Spread Across Key Demographics
The February employment decline of 84,000 jobs represents the second consecutive monthly decrease, partially offsetting gains made during fall 2025. This downturn particularly affected specific demographic groups that newcomers should monitor closely.
Youth Face Mounting Challenges
Youth aged 15-24 experienced the steepest losses, with employment falling by 47,000 positions (-1.7%). The youth unemployment rate jumped 1.3 percentage points to 14.1%, approaching the recent high of 14.6% reached in September 2025.
For racialized youth, the challenges are even more pronounced:
- Black youth: 23.2% unemployment rate (+4.6 pts year-over-year)
- Chinese youth: 17.4% unemployment rate
- South Asian youth: 13.0% unemployment rate
- Non-racialized youth: 11.2% unemployment rate
Core Working Age Men Hit Hard
Men aged 25-54 saw employment drop by 41,000 jobs (-0.6%), with their unemployment rate rising 0.3 percentage points to 5.7%. The decline was driven primarily by full-time job losses (-54,000 positions).
Meanwhile, core-aged women maintained stable employment levels, with their unemployment rate holding steady at 5.8%.
Sectoral Analysis: Services and Goods Both Decline
Services Sector Struggles
The services-producing industries lost 56,000 jobs (-0.3%), with the largest declines in:
- Wholesale and retail trade: -18,000 jobs (-0.6%)
- Other services (personal care, repair, advocacy): -14,000 jobs (-1.8%)
Wholesale and retail trade has been trending downward since October 2025, with a cumulative loss of 52,000 jobs (-1.7%) over this period.
Goods Sector Challenges Continue
Goods-producing industries shed 28,000 positions (-0.7%), with notable declines in:
- Construction: -12,000 jobs (-0.7%)
- Manufacturing: -9,200 jobs (-0.5%)
Manufacturing has been particularly affected, down 52,000 jobs (-2.8%) compared to February 2025.
Provincial Employment Landscape
Quebec Sees Largest Decline
Quebec experienced the most significant employment drop, losing 57,000 jobs (-1.2%) - the first major decline since January 2022. The province's unemployment rate rose 0.7 percentage points to 5.9%.
Western Provinces Face Mixed Results
- British Columbia: -20,000 jobs (-0.7%), unemployment rate steady at 6.1%
- Saskatchewan: -5,500 jobs (-0.9%), unemployment rate unchanged at 5.6%
- Manitoba: -4,000 jobs (-0.5%), unemployment rate dropped to 5.7%
Bright Spot in Atlantic Canada
Newfoundland and Labrador bucked the trend with 2,100 new jobs (+0.8%), though the unemployment rate remained elevated at 9.2%.
Ontario Employment Stabilizes
After losing 67,000 jobs in January, Ontario's employment held steady in February. However, more people entered the job search, pushing the unemployment rate up 0.3 percentage points to 7.6%.
What This Means For You
For Recent Immigrants
The current labour market conditions present both challenges and opportunities for newcomers:
Immediate Considerations:
- Youth and entry-level positions face increased competition
- Services sectors traditionally welcoming to newcomers are contracting
- Regional variations suggest strategic location choices matter more
Strategic Opportunities:
- Wage growth of 3.9% year-over-year indicates continued demand for skilled workers
- Public sector employment remained stable, offering potential stability
- Atlantic provinces like Newfoundland show growth potential
For Established Immigrants
Those already in Canada's workforce should:
- Prepare for increased competition in traditional immigrant-friendly sectors
- Consider upskilling in resilient industries like healthcare and technology
- Network actively as hidden job markets become more important
For Immigration Planning
Prospective immigrants should note:
- Provincial Nominee Programs in growing provinces may offer better prospects
- Skills-based selection becomes more critical as competition increases
- French language skills could provide advantages given Quebec's market dynamics
Long-term Employment Trends
Despite February's decline, Canada's labour market shows underlying resilience:
- Average hourly wages continue growing at a healthy 3.9% annually
- Long-term unemployment (27+ weeks) remains manageable at 22.8%
- Women's workforce participation continues historic upward trajectory
Women in the Workforce Milestone
March 2026 marks significant progress for gender equality in Canadian employment. Women now represent 47.3% of total employment, up dramatically from 36.9% in 1976.
Core-aged women (25-54) achieve an 80.1% employment rate, with provincial leaders being:
- Prince Edward Island: 86.6%
- Quebec: 83.6%
- Ontario: 78.5% (lowest)
However, the gender wage gap persists, with women earning $0.88 for every dollar earned by men.
Frequently Asked Questions
Why is Canada's unemployment rate higher than the United States?
Canada's unemployment rate of 6.7% compares to 4.4% in the United States (February 2026). However, when adjusted for different measurement concepts, Canada's rate would be approximately 5.6%. The gap reflects different labour market structures and measurement methodologies between the two countries.
Which provinces offer the best employment opportunities for newcomers?
Based on February 2026 data, Newfoundland and Labrador showed job growth, while Quebec and British Columbia faced significant declines. Ontario stabilized after January losses, while Prairie provinces showed mixed results. Consider provincial economic trends alongside immigration programs when planning.
How does the current unemployment rate compare historically?
At 6.7%, February 2026's rate sits between the recent high of 7.1% (August-September 2025) and pre-pandemic levels. While elevated, it remains manageable compared to historical recessions. The rate reflects ongoing economic adjustments rather than crisis conditions.
What sectors are most resilient for immigrant employment?
Public sector employment remained stable in February, while healthcare, professional services, and technology sectors continue showing resilience. Construction and manufacturing face headwinds, while retail trade shows concerning downward trends since October 2025.
Should I delay immigration plans due to rising unemployment?
While unemployment has increased, wage growth of 3.9% indicates continued demand for skilled workers. Economic cycles are normal - focus on developing in-demand skills, researching provincial opportunities, and understanding that Canada's immigration system specifically targets skills shortages even during challenging periods.
Stay informed about Canada's evolving labour market by bookmarking Immigration2Canada.com for the latest economic analysis and immigration insights that matter to your Canadian journey.
About Author
