Canada Labour Market Report: February 2026

Canada’s jobs report for February 2026 shows employment fell by 84,000, the second consecutive monthly decline, as the unemployment rate rose to 6.7% and the employment rate slipped to 60.6%. According to Statistics Canada’s Labour Force Survey (LFS) for February 2026, the losses were concentrated among youth and full-time workers, and varied significantly by province and sector.

The data tells a mixed story. Job losses are real and worth taking seriously, but wages continue to grow, labour force participation remains solid, and Canada’s economic diversity continues to provide a degree of resilience. Here is a clear-eyed breakdown of what the numbers show, who is most affected, and what to watch going forward.

Headline Numbers from the February 2026 Labour Force Survey

Employment declined by 84,000 (–0.4%) in February, following a loss of 25,000 in January. The unemployment rate rose 0.2 percentage points to 6.7%, and the employment rate fell to 60.6%.

Combined, the first two months of 2026 represent a loss of more than 100,000 jobs, partially reversing the hiring momentum that built through the fall of 2025. Month-to-month fluctuations are a normal feature of labour markets, but back-to-back declines of this scale are a signal worth watching closely.

Full-Time Job Losses in February 2026: What It Signals

The headline figure understates the shift happening beneath the surface. Of the 84,000 jobs lost in February, 108,000 were full-time positions, meaning part-time employment actually edged upward, partially offsetting the decline.

This distinction matters. Full-time employment tends to reflect employer confidence more reliably than overall job counts. When organizations anticipate slower growth, they typically reduce permanent hiring before anything else. The erosion of full-time work is therefore a more meaningful indicator of business sentiment than the headline number alone.

Which Workers and Provinces Were Most Affected?

The February losses were not evenly distributed across the workforce.

By age and gender: Youth aged 15 to 24 saw a decline of 47,000 positions (–1.7%), accounting for more than half of total job losses. Men in their core working years of 25 to 54 lost 41,000 jobs (–0.6%). Employment among core-aged women and workers 55 and older was largely unchanged.

Youth unemployment now sits at approximately 14%,  notably higher than the national average, though consistent with historical patterns. Young workers are disproportionately concentrated in part-time, seasonal, and entry-level roles, which tend to be among the first affected when employers pull back. Entry-level hiring typically recovers relatively quickly once conditions stabilize.

By province: Quebec accounted for the largest share of losses (–57,000; –1.2%), followed by British Columbia (–20,000; –0.7%), Saskatchewan (–5,500; –0.9%), and Manitoba (–4,000; –0.5%). Newfoundland and Labrador bucked the trend with a gain of 2,100 jobs (+0.8%), while most other provinces saw little change.

Sector Breakdown: Where Jobs Were Lost and Gained

Both goods-producing and services-producing industries recorded declines in February:

• Services-producing industries fell by 56,000 (–0.3%), led by wholesale and retail trade (–18,000) and personal and repair services (–14,000).
• Goods-producing industries declined by 28,000 (–0.7%).
• Information, culture and recreation shed 12,000 positions (–1.4%).
• Transportation and warehousing added 10,300 jobs, and public administration grew by 8,100.

The losses in retail and trade are notable given their direct connection to consumer spending. If Canadians are pulling back on discretionary purchases, whether due to cost-of-living pressures or economic uncertainty, those effects tend to show up in retail employment first.

Wages and Participation: Reasons for Cautious Optimism

Despite the headline losses, two underlying indicators remain relatively strong.

Average hourly wages for permanent employees continue to grow at roughly 4% year-over-year. Sustained wage growth at this level signals that demand for workers has not disappeared; employers in many industries are still competing for skilled talent, even as overall hiring has slowed. The Bank of Canada monitors wage trends closely, as they play a direct role in shaping inflation expectations and interest rate decisions.

Canada’s labour force participation rate also remains historically solid at around 65%, meaning the vast majority of working-age Canadians are either employed or actively looking for work. A stable participation rate signals an engaged workforce, not one that has given up looking.

A Milestone Worth Noting

Amid the mixed data, one figure stands out as a meaningful long-term marker. In February 2026, the number of women employed in Canada reached 10 million, representing 47.3% of total employment. That share has risen significantly from 36.9% when comparable LFS data first became available fifty years ago in 1976, a shift that reflects decades of change in education, workplace policy, and economic participation.

Canada vs. U.S. Unemployment Rate: February 2026

When Canadian data is adjusted to U.S. concepts for a consistent comparison, Canada’s unemployment rate was 5.6% in February, unchanged from January 2025. The U.S. unemployment rate stood at 4.4% in February 2026, up 0.4 percentage points from January 2025.

Both countries are navigating a period of labour market adjustment, though the dynamics differ. Canada’s exposure to trade pressures, particularly given ongoing developments in Canada-U.S. trade relations, remains an important variable heading into the spring.

Global Context and Canada’s Economic Resilience

Canada’s economy does not operate in isolation. Trade relationships, supply chain pressures, and global commodity cycles all influence domestic hiring decisions, particularly in manufacturing, natural resources, and export-oriented industries.

That said, Canada’s economic diversity, spanning technology, professional services, energy, and financial services, continues to provide a degree of resilience. This breadth has historically helped Canada weather periods of external uncertainty without experiencing the more severe dislocations seen in less diversified economies.

What to Watch in Canada’s Labour Market Going Forward

The February 2026 Labour Force Survey raises questions that upcoming data will need to answer. Key indicators to monitor include:

• Monthly employment growth, particularly in full-time positions
• Youth employment trends as spring and summer hiring picks up
• Provincial divergences, especially in Quebec and British Columbia
• Wage growth relative to inflation and Bank of Canada rate decisions
• Job vacancy data, which will clarify whether employers are pulling back on plans or struggling to fill roles

Labour markets move in cycles, and Canada’s current phase appears to be one of measured adjustment. Whether January and February’s losses represent a temporary correction or the beginning of a more sustained softening will become considerably clearer over the next two to three months.

The Bottom Line

The back-to-back monthly declines and the drop in full-time employment deserve attention, but they sit alongside a labour market where wages are rising, participation is strong, and economic diversity continues to provide stability.

For workers, the current environment may call for a more strategic approach to job searching. For employers, easing labour shortages may gradually improve access to talent. For everyone watching the data, the next few months will tell us considerably more.