Canada's unemployment rate declined to 6.5% in June 2026, down from 6.7% in May, as the economy added 18,000 net new jobs, Statistics Canada reported on Friday.
Job Gains and Losses by Sector
The employment increase was driven by gains in full-time work, which rose by 25,000 positions, while part-time employment fell by 7,000. The goods-producing sector added 12,000 jobs, led by construction and manufacturing. The services-producing sector contributed 6,000 new jobs, with notable increases in professional, scientific and technical services, as well as health care and social assistance.
Regional Variations
Employment rose in Ontario, British Columbia, and Alberta, while Quebec and the Atlantic provinces saw modest declines. The unemployment rate in Alberta fell to 5.9%, its lowest level since 2015, as oil and gas sector hiring picked up. In Ontario, the rate dropped to 6.1%, while Quebec's rate edged up to 5.8%.
Wage Growth and Labour Force Participation
Average hourly wages for permanent employees increased by 3.8% year-over-year to $36.45, slightly above the inflation rate of 3.2%. The labour force participation rate remained steady at 65.3%, indicating that more Canadians are entering or re-entering the job market.
“Today's report shows that the labour market remains resilient, with solid job creation and wage growth keeping pace with inflation,” said Brendon Bernard, senior economist at Indeed Canada. “However, the Bank of Canada will likely view this as supporting a cautious approach to interest rate cuts.”
Youth and Long-Term Unemployment
Youth unemployment (ages 15-24) fell to 11.2% from 11.8% in May, driven by summer job hires. The number of long-term unemployed (27 weeks or more) declined by 4% to 210,000, suggesting improved re-employment prospects for those out of work for extended periods.
Impact on Monetary Policy
The job data comes ahead of the Bank of Canada's next interest rate decision on July 15. Markets see a 45% probability of a quarter-point rate cut, down from 55% before the release, as the labour market tightness reduces urgency for loosening. The central bank has held its key rate at 4.75% since June after cutting from 5%.
Industry Expert Reactions
“The 18,000 job gain is a solid number, but we need to see sustained growth above 20,000 per month to absorb population growth,” noted Dawn Desjardins, chief economist at RBC. “The drop in the unemployment rate is welcome, but it's partly due to fewer people searching for work.”
The employment rate for core-aged workers (25-54) rose to 84.2%, a sign of strong labour demand. However, the number of unemployed Canadians still exceeded job vacancies by a ratio of 1.4 to 1, suggesting some slack remains.
