Canada Loses Over 100,000 Jobs Early In 2026 As Trade Tensions Mount

Canada has lost more than 100,000 full-time jobs in the first two months of 2026, according to new labour data, raising concerns about the country’s economic outlook.

Figures released on Friday show that Canada’s unemployment rate has climbed to 6.7 percent, placing it among the highest jobless rates in the Group of Seven (G7) economies, behind only France.

The employment drop in February marked the sharpest decline since the COVID-19 pandemic, erasing much of the job growth recorded toward the end of last year. The wholesale and retail trade sectors experienced the most significant losses.

Responding to the figures, Canadian Prime Minister Mark Carney said trade actions by the United States were contributing to economic adjustments in Canada.

Speaking to reporters during a visit to Norway, Carney said the tariffs imposed by Washington were creating disruptions in the Canadian economy. However, he noted that wages have generally been increasing and that the unemployment rate remains slightly lower than when he assumed office in March 2025, when it stood at 6.8 percent.

The latest labour report has drawn criticism from opposition figures. Pierre Poilievre, leader of Canada’s Conservative Party, described the data as troubling and partly blamed the government’s economic management.

Poilievre argued that although many countries face global economic pressures, Canada’s economic performance has been weaker compared to some of its G7 counterparts. He made the remarks ahead of a planned trip to the United States, where he intends to meet with automotive executives and lawmakers to discuss his party’s approach to ongoing trade tensions between the two countries.

Since returning to office, U.S. President Donald Trump has imposed tariffs on several key Canadian industries, including automobiles, steel and aluminium. The measures have contributed to job losses in affected sectors.

The United States has also introduced broader tariffs, including a global 10 percent duty on some imports. However, many Canadian exports have remained exempt due to the United States–Mexico–Canada Agreement (USMCA), the regional trade pact that governs commerce between the three North American countries.

The future of the USMCA is currently uncertain, as the agreement is undergoing a mandatory review this year. Trump has previously suggested he may consider replacing it or negotiating separate trade deals with Canada and Mexico.

Economists say the uncertainty surrounding trade policy is weighing heavily on Canada’s labour market. Katherine Judge, a senior economist at CIBC Capital Markets, described the employment report as worrying and said it indicates that economic activity may be slowing.

She noted that rising labour market slack and trade uncertainty are beginning to affect business confidence and hiring decisions.

The United States remains Canada’s largest trading partner, with a significant share of Canadian exports heading south of the border. Historically, about three-quarters of Canadian goods were exported to the U.S., although that figure has recently declined to around 67 percent.