The employment decline was concentrated among youth aged 15 to 24 (-48,000; -1.8%) as well as women aged 25 to 54 (-28,000; -0.4%). In September, public sector employment fell by 70,000. This was the fourth consecutive monthly decline for the sector. On a year-over-year basis, the number of public sector employees was down by 119,000 (-2.6%), with most of the decline attributable to employment in educational services.

The number of private sector employees was little changed for a second consecutive month in September, but it was up by 163,000 (+1.2%) compared with 12 months earlier.

Self-employment edged down in September (-23,000; -0.8%). This follows an upward trend from April to July. Year on year, self-employment was up by 51,000 (+1.9%).

The layoff rate was 0.7%, similar to the rate observed a year earlier (0.6%) and the average during the period from 2017 to 2019 (0.6%) (not seasonally adjusted).

The job-finding rate was 30.6% in September, down from 32.8% 12 months earlier and below the average of 36.5% during the period from 2017 to 2019.

The labour force participation rate fell 0.2 percentage points to 64.8% in September. This was the lowest level since December 1997 (when it was also 64.8%), excluding 2020 during the COVID-19 pandemic. Year over year, the participation rate fell 0.4 percentage points in September 2026, largely due to population aging.

In September 2026, people aged 65 and older accounted for 23.2% of the working-age population in the Labour Force Survey, up from 20.5% in September 2019. In comparison, this share was 14.8% at the turn of the millennium. The upward trend in was briefly paused in 2023 and 2024, as sharp increases in permanent and temporary immigration offset the aging of the population. However, in 2025 and into 2026, the trend towards an aging population resumed.

By sector, fewer people worked in educational services, Health care and social assistance, and manufacturing. Regionally, employment declines were posted in Quebec and British Columbia, while energy-heavy Alberta enjoyed continuing job gains. Alberta’s unemployment rate was 6.4% in September, down both month-over-month (-0.4 percentage points) and year-over-year (-1.3 percentage points).

While the job losses last month were driven by the public sector, the cumulative decline in employment since the start of the year paints a sluggish picture of the labour market. Employment fell in Canada by 41,200 since December 2025, the largest year-to-date loss since the 2009 financial crisis, excluding 2020 during the Covid-19 pandemic.

The September data also gives the first look at the impact of so-called Section 338 tariffs on the Canadian economy. New 50% US tariffs on $20 billion of Canadian goods took effect on Aug. 22 after the breakdown in trade negotiations between the two countries, while retaliatory tariffs on US goods kicked in on Sept. 8. Job losses in August and September total 110,000.

The trade war escalation is expected to weigh on the economy, but the Bank of Canadahas put more emphasis on inflation risks, as the Iran war continues to drive up energy prices.

Bottom Line

The Bank of Canada will likely hold off on a rate hike at its October 28 meeting, especially if the inflation data released on October 19 brings no nasty surprises. The Bank of Canada will also publish its Business and Consumer Outlook Survey that day, which will estimate inflation expectations.