OTTAWA — Statistics Canada says employment came in sharply lower than expected in February as a surprise drop of 84,000 jobs pushed the unemployment rate up two ticks to 6.7 per cent.
The agency said Friday that February saw more than 100,000 jobs lost in full-time work, while private sector employment fell by 73,000 positions.
A Reuters poll of economists heading into Friday’s release expected a slight rise in the unemployment rate but also called for a gain of 10,000 jobs last month.
The Canadian labour market added a cumulative 189,000 positions in the final four months of 2025, but 2026 has offset some of those gains with two consecutive months of job losses to start the year. February’s surprise decline follows a loss of 25,000 jobs in January.
StatCan said that, compared to the same month a year ago, total employment was little changed in February.
Young workers aged 15 to 24 faced a loss of 47,000 jobs last month, StatCan said, eroding some of the progress made late last year in taming high levels of youth unemployment. Men between the ages of 25 and 54 also faced steep job losses in February.
Both the services and goods-producing sides of the economy saw employment drop in February. The wholesale and retail trade sector led losses with 18,000 jobs erased, followed by a loss of 14,000 positions in the other services industry – a broad category that includes personal care, and repair and maintenance work.
In goods industries, the construction and manufacturing sectors saw declines.
Transportation and warehousing added just over 10,000 jobs in February, while public administration gained 8,100 positions.
Quebec saw 57,000 jobs lost in February, which StatCan called the first significant loss of employment in the province in over four years. The jobless rate in the province rose 0.7 percentage points to 5.9 per cent last month.
British Columbia meanwhile shed 20,000 positions, and Saskatchewan and Manitoba also lost jobs.
Employment held steady in Ontario last month while 28,000 more people started looking for work, only partially offsetting a sharp drop in the province’s participation rate observed during harsh winter weather in January.
Nationally, however, Canada’s pool of available labour shrank again in February.
TD Bank senior economist Andrew Hencic said in a note to clients Friday that the shrinking labour force, a rising unemployment rate and steep job losses make this a “decidedly weak report.”
Hencic said the economy is struggling to gain traction in the face of structural changes facing Canada, such as ongoing trade uncertainty.
He also flagged that the war in the Middle East is a “wildcard” for the economy in terms of how long the conflict will last. An extended disruption will mean a prolonged bout of inflation tied to higher energy costs, which Hencic said will have knock-on effects for consumer spending and growth more broadly.
The February job figures come less than a week before the Bank of Canada’s next interest rate decision set for March 18. The central bank’s policy rate stands at 2.25 per cent following a hold at its January decision.
Bradley Saunders, North America economist at Capital Economics, said in a note that the latest weakness in the labour market supports his view that the Bank of Canada will avoid interest rate hikes this year even if an oil price spike fuels a jump in inflation.
This report by The Canadian Press was first published March 13, 2026.
Craig Lord, The Canadian Press
