In the wake of Canada’s employment surge in July, August
appears to have brought everyone back down to earth. According to the August
2026 Labour Force Survey, Statistics Canada reported that employment declined
by 42,000 (-0.2%) in August though the national unemployment rate remained
unchanged at 6.4%. Employment fell in
business, building and other support services, public administration, natural
resources and utilities though it increased 1.2 percent in in manufacturing adding
22,000 jobs. Nevertheless, it should be stressed that one should not agonize over month to month numbers given they do not indicate a trend and are frequently revised.
While Ontario lost jobs according to the raw numbers once
the numbers are seasonally adjusted, Ontario saw a small increase of 5700 jobs
which essentially means that employment growth in Ontario was lacklustre in
August. If one examines the seasonally
adjusted numbers for Ontario and its major urban areas in August (Figure 1), Windsor,
Toronto and Guelph added 6100, 5900 and 2600 jobs respectively. It’s pretty much downhill from there in terms
of the absolute number of jobs added with Thunder Bay, Oshawa, London, Hamilton
and Ottawa seeing job losses. Indeed,
Hamilton and Ottawa were the hardest hit with Hamilton seeing 5100 jobs lost
and Ottawa – still seeing cuts in public sector workers – fell by 9200 jobs.
If one looks at the growth rates in annual terms (August
2025 to August 2026; See Figure 2), seasonally adjusted monthly employment is
still up substantially with Ontario seeing 96,500 jobs added since August 2025
for an increase of 1.2 percent in employment.
Guelph and Bellville-Quinte lead the annualized employment growth rates
at 13.5, and 9.9 percent respectively followed by Windsor at 6.1 percent and
Greater Sudbury, at 5 percent. Again, several cities saw negative employment growth
with Thunder Bay and Kitchener-Waterloo-Cambridge at -0.3 percent, Hamilton at
-1.4 percent and London at -4.5 percent.
The impact of tariffs and the trade war to date over the
course of the year are not yet having a major impact in Ontario though the
performance across some cities is a bit more mixed. Hamilton, London and Ottawa appear to be
having the most turmoil in their employment. The monthly August numbers in the
wake of the July surge cannot really be taken as indicative of any trend though
the annualized numbers suggest Ontario is holding its own. As for the two northern Ontario CMAs, Figure
3 plots their longer-term employment evolution in more detail.
Both Thunder Bay and Greater Sudbury have seen increasing employment
since 2021 based on both the profile of monthly numbers as well as the fitted
trend. Since August of 2021, Greater Sudbury
has added over 18,000 jobs while Thunder Bay has added 4700. In percent terms, employment in Greater Sudbury
has grown by 22 percent while Thunder Bay has grown by 8 percent. However, Thunder Bay, based on these monthly
seasonally adjusted numbers peaked in January of 2026 at an employment level of
70,400 jobs meaning that over the last eight months, it has shed 3800
jobs. This suggests that there has been
a substantial slowdown in employment in Thunder Bay and may be tied to the
winding up of major construction projects at places like the airport, assorted
hotels and of course the new correctional facility as well as some reductions
in public sector employment.
A return to the mid 60000s in total employment suggests that
Thunder Bay will not be permanently staying above the 70000-job employment
ceiling at least for now.
