Canada’s Unemployment Rate Hits 6.9% in April, Thanks to US Tariffs and Manufacturing Losses
Canada's unemployment rate rose to 6.9% in April 2025, marking its highest level since November 2024, according to Statistics Canada, even though the economy added a modest 7,400 jobs during the month, with significant losses in the manufacturing sector, which shed 31,000 positions, thousands and thousands of people don't have a job.
The increase in unemployment is largely attributed to U.S. tariffs imposed by President Donald Trump on Canadian exports, including steel, aluminum, and automobiles. Trump, who is also jokingly forcing Canada to become the 51st state of the USA, is actually causing Canadians to lose more jobs than ever before.
These new tariffs have strained Canada's export-dependent economy, leading to job cuts across manufacturing, wholesale, retail, and trade sectors.
Public administration saw an increase of 37,000 jobs, primarily due to temporary hiring for the federal election.
However, this was not enough to offset losses in other sectors, as per Reuters, Ali Jaffery (a senior economist at CIBC Capital Markets) said:
"Overall, we are seeing a job market that was weak heading into the trade war, now looking like it could soon buckle. Today's report supports the case for a Bank of Canada cut in June,"
Employment fell among core-aged women (25 to 54 years old) by 60,000, while it increased among people aged 55 and older by 35,000.
The labor market's weakness is expected to prompt the Bank of Canada to consider a 25 basis point interest rate cut in June, as swap market odds for such a move exceed 55%.
Regionally, employment declined in Ontario by 35,000 jobs, while Quebec and Alberta saw increases of 18,000 and 15,000 jobs, respectively.
The Canadian dollar fell to a three-week low against the U.S. dollar, trading at 1.3930 per U.S. dollar, amid concerns over financial stability from the prolonged trade war.
Analysts warn that continued trade tensions and economic uncertainty could further impact Canada's labor market and overall economic growth in the coming months of 2025.
