Rising unemployment a ‘harsh reality' of the trade war, experts say
Canada's job market continues to show signs of weakness, according to the latest report from Statistics Canada, and experts say this shows how much the trade war is negatively impacting our economy, as well as the ability for households to afford the cost of living.
This was especially the case in Ontario, which saw tens of thousands of jobs lost and unemployment spike in the province to well above the national average.
'The April Labour Force Survey showed the first direct hit from the trade war after several months of anticipation,' says economist Brendon Bernard at Indeed.
The overall unemployment rate in Canada increased to 6.9 per cent last month from 6.7 per cent in March, and although there were 7,400 net new jobs added (meaning the number of new jobs minus the amount of jobs lost), Statistics Canada considers that result to be practically no growth at all, or zero per cent.
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Canadians have been growing more concerned about job losses in recent months as businesses signalled tariffs would mean scaling back hiring plans. This also comes as many Canadians continue to struggle with the cost of living and are very close to being, or are already in financial debt.
'April's report indicates that the rumoured layoffs in response to the trade war have transitioned from worrisome headlines to harsh reality,' says financial expert Shannon Terrell at NerdWallet, adding that when it comes to the cost of living, 'Canadian households should buckle up — the ride ahead could get bumpy.'
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Bank of Canada calls U.S. trade war the 'greatest threat' to Canada's economy
U.S. President Donald Trump's tariffs sparked a trade war, which has long been expected to impact economies worldwide, including in Canada, as many businesses lay off workers to reduce costs.
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'Canada's labour market enters the fog of trade war on weaker ground,' says economist Andrew DiCapua at the Canadian Chamber of Commerce.
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'The goods-producing sectors lost 33,000 jobs in April — the third straight monthly decline — with Ontario's manufacturing sector hit hardest.'
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April featured the federal election, and there were thousands of temporary positions added to the workforce to help with the voting process, which economists note as something hiding the underlying trend.
'Employment would have fallen by 30,000 (jobs) in April had it not been a surge in public admin jobs thanks in part to temporary election hiring,' says economist Claire Fan at the Royal Bank of Canada.
When factoring out the election, this report shows a net loss of roughly another 30,000 jobs and follows a loss of 33,000 reported for March.
'April's report indicates that the rumoured layoffs in response to the trade war have transitioned from worrisome headlines to harsh reality,' says financial expert Shannon Terrell at NerdWallet, and when it comes to the cost of living she adds, 'Canadian households should buckle up — the ride ahead could get bumpy.'
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Ontario led the job losses with 35,000 in April, mostly in manufacturing, and more than 60,000 lost in total since February. The province's unemployment rate also increased in April from 7.5 to 7.8 per cent — nearly a full per cent higher than the current national average of 6.9 per cent.
'Ontario experienced substantial employment losses, and within the province, unemployment was up notably in the highly U.S.-integrated Windsor area,' says Bernard, adding, 'It's already been a challenge for many groups of job seekers, particularly youth, but further deterioration would mean the pain will start spreading.'
On the flip side, there were some signs of strength in the labour market for other provinces including Saskatchewan, Manitoba, and Prince Edward Island, which saw unemployment rates improve the most last month by falling 0.6, 0.7 and 0.9 per cent, respectively.
Beyond the top job growth sector last month, that being public administration tied to the federal election, other areas of improvement included finance, real estate, culture and recreation, as well as transportation, logistics and storage.
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On top of the heightened risk of job loss and the financial challenges of not having a steady income, many Canadians are already having trouble making ends meet, including young people and senior citizens.
'All this is to say that there's room for a lot more (job) declines in the months ahead,' says Bernard. 'Unless the tariff situation is resolved.'
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