Ontario's unemployment rate has climbed for the fourth consecutive year, reaching 7.7% in 2025 — a 0.7 percentage point increase from the previous year and the highest non-pandemic rise since 2012, according to a labour market report from the Financial Accountability Office of Ontario (FAO).
Job creation slows significantly
The FAO report indicates that job creation in the province continued to decelerate in 2025. Employment grew by only 80,900 jobs, or 1%, down from 140,000 jobs (1.7%) added in 2024. This marks the slowest pace of job creation since 2015, excluding the pandemic years.
Job gains were concentrated among core-aged workers and youth, spanning eight of 16 major industries and 12 of the province's 15 largest cities. However, the number of new jobs failed to keep up with the growing number of people seeking work, driving the unemployment rate higher.
Vacancy rates decline across all sectors
Job vacancies fell by 11.1% in 2025, with the overall vacancy rate dropping from 2.9% in 2024 to 2.6%. This decline was observed across all industries and sectors. Healthcare and social assistance continued to have the highest number of vacancies for the fourth consecutive year.
The report also noted that the unemployment-to-job vacancy ratio increased from 3.1 in 2024 to 3.9 in 2025, indicating softer labour market conditions.
Political reaction
Ontario Liberal Finance Critic Stephanie Bowman criticized the provincial government, stating that the report is a clear sign that the Doug Ford Conservative government's plans are failing workers. She pointed out that unemployment is rising faster in Ontario than in any other province, and that Ontario accounts for 45% of Canada's unemployed workers despite having only 39% of the national labour force.
The FAO report highlights ongoing challenges in Ontario's labour market, with slow job creation and rising unemployment posing concerns for workers and policymakers alike.
