Canada’s Unemployment Rate Drops to 6.5% in January

Regional Insights from the January 2026 Labour Market Data

Employment improved in Alberta, with 20,000 jobs added. Saskatchewan saw a gain of 6,100 jobs while Newfoundland and Labrador gained 3,800 .

Ontario saw a loss of 67,000 jobs but the overall unemployment rate still dropped  by 0.6% as fewer people looked for work.

Finding work in Canada’s major cities 

The unemployment rate in Canada’s major cities has dropped almost everywhere compared to the same time last year. 

Toronto had an unemployment rate of 8.3% in 2025, which is down to 7.4% in 2026. This is still above the 6.5% average for Canada but considering population growth, is a positive step.  

Montreal went from 8.1% unemployment to 6.8%, and Calgary went from 7.4% to 6.5%.  

However, those hoping to arrive through the low wage stream of the Temporary Foreign Worker Program will have a harder time because applications are not being processed for any Census Metropolitan Area with an unemployment rate higher than 6%. 

Overall, the rate of unemployment in Canada’s big cities is still high but newcomers those with in-demand skills, have reason to be optimistic. 

Provincial Unemployment Rates Across Canada in January 2026

Here are the provincial unemployment rates in Canada, based on StatsCan data from January 2026:

• Alberta: 6.4%

• British Columbia: 6.1%

• Manitoba: 6.3%

• New Brunswick: 6.7%

• Newfoundland and Labrador: 9.2%

• Nova Scotia: 6.9% 

• Ontario: 7.3%

• Prince Edward Island: 7.6%

• Quebec: 5.2%

• Saskatchewan: 5.3%

Changes in Provincial Unemployment from November to January 2026

Why is workforce participation down? 

More than 12 million people in Canada were not employed and not looking for work. There are several reasons for this, and Statistics Canada breaks it down by age group. 

Younger workers (15-24) are back at school (89.9%). It’s likely we will see this percentage drop in the spring when many post-secondary students try to find summer jobs. International students and working holiday makers can expect the competition for summer jobs in Canada to be fierce. There are currently 492,000 people with a study permit in Canada and only so much seasonal work to go around. 

Among those who are 24-55, 23% of non-participants are at home looking after children, and another 23% of them have a disability or illness and are not physically able to work. 

After 55, 79% of workforce participants are retired. The rate of retired workers is up 2.2% from last year, which means that the inevitable wave of baby-boomer retirements is underway. 

Only 0.3% of people aren’t participating in Canada’s workforce because they think there are no jobs available. It works out to about 34,000 people and represents a 0.1% percentage increase over the same time last year. Still, it’s a small amount of people overall and shows that most workers in Canada are employed or actively looking for work and holding out hope. 

The latest job vacancy data shows that in the third quarter of 2025, there were 492,500 vacant jobs in Canada. 

US Tariffs making workers nervous 

The introduction of US tariffs on Canadian goods has some workers getting ready to find new employment.  

The tariffs were introduced in late 2025 and are already having a being felt by Canadian workers.  In late January, over 1,000 workers at General Motors in Oshawa were laid off. Similar scenarios are happening at other automotive manufacturers as well.  

With stories like that, it’s not a total surprise that StatsCan found “5.4% of permanent core-aged employees in industries dependent on US demand for Canadian exports were planning to leave their jobs in the next 12 months.” Among them, almost 70% are already looking for work. 

The impact of tariffs is most keenly felt among goods producing industries such as automotive, steel, aluminum, and soft lumber. 

The data on newcomer employment in these industries is scarce, but one thing for sure is that tariffs have caused uncertainty in Canada’s economy. It’s likely that we will continue to see employment rates rise and fall, especially in provinces that depend heavily on producing goods. This is something to consider when deciding if you should move to Canada. 

Expert resources to help immigrants get jobs in Canada

Canada’s job market provides a wealth of opportunity for newcomers, but it is only that — an opportunity.

To take full advantage, recent and prospective immigrants can leverage free government-funded resources and programs. We recently partnered with Canada InfoNet, a government-funded pre-arrival employment support program, to bring you two expert guides on transitioning to a career in Canada:

• Transitioning to the Canadian job market
• How to find a career mentor in Canada

The outlook on Canadian construction and infrastructure

Ruairi Spillaine, Outpost Recruitment and Moving2Canada founder, analyzes what’s happening in the construction sector in Canada.

“Canada’s construction sector continues to provide opportunities to experienced candidates who can differentiate themselves in a tighter employment market. While commercial and residential sectors are slower, institutional buildings and a buoyant infrastructure sector continue to drive employment opportunities from coast to coast. Meanwhile, Canada’s industrial sector including nuclear, mining and renewables is set for a strong 2026.“

 

If you are interested in working in Canada’s construction sector, Outpost helps motivated candidates find suitable jobs in Canada.

The agency works with general contractors, subcontractors, developers, and consultants who are hiring across senior management, operations, project management, site, design, quality, and commercial personnel.

Outpost Recruitment is actively looking for candidates for projects across Canada. View the latest job postings here.

How to get a job in Canada

If you’re looking for a job in Canada here are some steps you can take to land that sweet, sweet Canadian job offer.

• Get your resume in good shape. This crucial step is often left down the list of job seekers’ priorities, despite being arguably the most important step of all. Read our Canadian resume guide to get going.
• Start looking at open opportunities. Some companies are still hiring. Don’t believe us? Head over to our Jobs Board, populated daily with new positions across Canada.
• Build your network. You can assemble a team to help you in your job search. With ongoing physical distancing and travel restrictions, technology is your friend here. Read our networking guide, written by award-winning entrepreneur Ruairi Spillane, for expert advice.

Here’s a popular webinar from recruitment expert and Moving2Canada founder, Ruairi Spillane, about how to create the best resume for the Canadian jobs market:

New and improved Jobs Board

We have worked hard over recent weeks to ramp up the number and range of job postings on our Jobs Board.

We also have a number of other resources for helping you find your career in Canada. You’ll find broad-stroke information that will arm you with the knowledge you need to succeed, as well as industry-specific insights into finding jobs by industry, such as teaching.

Want to dig deeper into the Canada Jobs Report data? Try these interactive tools, courtesy of StatsCan.

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