The Canadian Labour Force Shrinks Slightly as Employment Rises

In September, the national unemployment rate in Canada drop by 0.2% to 5.2%. A recent survey conducted by Statistics Canada’s September Labour Force showed positive trends in the labour market around employment, while the federal government is concerned regarding the aging population and ever-increasing retiree leaves from the workforce.

Employment has spiked in the provinces like British Columbia, Manitoba, Nova Scotia, New Brunswick, Yukon, and Nunavut in September. On the other hand, Ontario, Prince Edward Island, and the Northwest Territories saw a slight fall. Among Canada’s core-aged population (25-54), employment increased for women (+0.8%) while it remained steady for men. As well as the strong hiring climate Canada is experiencing right now, these remain largely positive signs.


A gain in employment in education and health care and social assistance services was offset by a loss in employment in manufacturing, information, culture, transportation, and warehousing. The rise in the service sector industries reveals an increase in spending in these sectors post-pandemic, which has assisted a continued return toward pandemic business levels.

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Furthermore, Canadians looking for work spent less time unemployed, with a decline of 9.7% in long-term employment (the total number of people who have been repeatedly unemployed for 27 weeks or more).

This is another encouraging sign of a robust hiring scenario. The requirement to continue taking care of the inflated number of job vacancies, as seen since July will stay of primary concern to the national labour market. Although these stay strong signs for economic performance and highlight opportunities within Canada, there are also long-term movements that are not as promising.

A Contraction in the Labour Force

The month of September experienced a fall in both the total size of the labour force by 0.4% and a decline in the contribution rate of -0.1%. This decrease is consistent with monthly and yearly trends that highlight the requirement for sustained labour recruitment in Canada. Since the beginning of the year 2022, the national labour force participation decreased by 2.4%.

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These reforms stay relevant in the face of high vacancies and an aging population; the latter noteworthy domestic problem that Canada must continually address. Although, in the facet of another trend the fall becomes even more relevant. In September, approximately one million people aged between 55-64 mentioned retirement as their primary activity. Related to an aging population, a spike in the number of people in the workforce continue to take retirement, pushing Canada’s labour force down.

In the scenario where Canada’s working population reaches the retirement age (Since 2019 the total number of Canadians aged 65+ increased by 11.6%, while the progress in the population of people of working age was only 3.5%), and in the facet of job openings and labour market contraction, Canada will have to take certain measures to ensure that it does not experience a major labour shortage and meet its economic and fiscal goals in time.

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