Canada Lost 68,000 Jobs in September: Which Sectors Are Shrinking?

The short answer: a bad month, mostly in public services

September's 68,000 job loss is real and statistically significant, but it is mostly a public-sector story, not a broad private-sector collapse. Public-sector employment fell 70,000, more than the entire net national loss. Private employers held steady. Smoothed over three months, Canada is losing about 11,700 jobs a month, which is weak but not a freefall.

Statistics Canada's Labour Force Survey (LFS) for September 2026, released on 9 October, showed employment falling by 68,000 (-0.3%) to 21,105,000. The unemployment rate rose 0.1 percentage points to 6.5%, back to where it was in January. Economists had expected a gain of about 9,200, according to The Canadian Press.

The headline hides a split. Public-sector employees fell by 70,000 (-1.5%), the fourth straight monthly decline, while private-sector employment was little changed for a second month and is up 163,000 (+1.2%) from a year earlier. Self-employment fell 23,000. In other words, the job losses came largely from schools, hospitals and other public services rather than from factories or offices exposed to US tariffs.

It also matters that this is the second bad month in a row. August lost 42,000 jobs. Adding up StatCan's rounded monthly estimates, employment is now about 42,000 lower than in December 2025, which wipes out the 181,000 jobs added between April and July.

Is Canada losing jobs in 2026? Month by month

Yes, on balance: five of nine months in 2026 showed job losses, and the year-to-date total is about -42,000. A strong run from May to July (+181,000) was cancelled out by losses in January and February (-109,000) and again in August and September (-110,000).

The pattern is choppy. February's 84,000 drop was the worst month of the year until September. The unemployment rate climbed to a 2026 peak of 6.9% in April as more people looked for work, then fell for three straight months to 6.4% in July, the lowest since July 2024.

September was the steepest monthly loss since February, but it was not unprecedented for 2026. What is new is that two weak months came back to back just as new US tariffs took effect and the Bank of Canada was weighing whether to raise rates.

Canada's unemployment rate at 6.5%: high or normal?

At 6.5%, Canada's unemployment rate is below its 7.1% peak of August and September 2025, but well above the 5.5% of September 2023. The rate has been stuck between 6.4% and 6.9% all year, so September's rise is small. The bigger warning signs are a falling participation rate and a low job-finding rate.

The unemployment rate only tells part of the story because it counts people who are actively looking. In September the participation rate fell 0.2 points to 64.8%, down 0.4 points from a year earlier. Fewer people in the labour force kept the jobless rate from rising more.

Two other StatCan measures show a harder market for job seekers. The job-finding rate (the share of unemployed people who found work by the next month) was 30.6%, down from 32.8% a year earlier and well below the 2017 to 2019 average of 36.5%. The layoff rate was 0.7%, slightly above the 0.6% of a year earlier and the pre-pandemic average. Canada is in what economists call a low-hire, low-fire market: layoffs are only slightly elevated, but getting hired is noticeably harder.

Which sectors lost jobs in September 2026?

Educational services lost 35,000 jobs, health care and social assistance lost 23,000 and manufacturing lost 13,000, while 'other services' gained 17,000. Education alone accounts for about half of the national net loss, and health care posted its first decline since December 2022.

• Educational services: -35,000 (-2.2%) The first notable move after seven months of little change. Over 12 months the sector is down 67,000 (-4.2%). StatCan did not give a reason; Desjardins suggested it may reflect fewer international students at the start of the school year. Treat that link as an economist interpretation, not a StatCan finding.
• Health care and social assistance: -23,000 (-0.8%) Its first decrease since December 2022. The sector is still up 93,000 (+3.2%) from a year earlier, so this is a dent in a long growth run rather than a reversal, for now.
• Manufacturing: -13,000 (-0.7%) This followed a 22,000 gain in August and leaves factory employment little changed over the year.
• Other services: +17,000 (+2.1%) Repair, maintenance and personal services were the only industry with a significant gain, and are up 32,000 (+4.1%) year over year.

The public vs private split is the key detail. Public-sector employees fell 70,000 in September. Adding June (-31,000), July (-27,000), August (-20,000) and September (-70,000) gives a KalQLater total of -148,000 public-sector jobs in four months. Year over year, the public sector is down 119,000 (-2.6%) while the private sector is up 163,000 (+1.2%).

Canada jobs by province: where were the losses?

Quebec lost 49,000 jobs in September, about 72% of the national net loss, while Alberta added 23,000. Ontario and British Columbia each lost about 20,000. Newfoundland and Labrador has the highest unemployment rate at 9.1%; Manitoba has the lowest at 5.0%.

Quebec is the outlier. It lost 19,000 jobs in August and 49,000 in September, and StatCan says employment there is down 130,000 (-2.8%) from January to September, with unemployment up 0.8 points since January. That is a much steeper slide than the national picture. Ontario, despite its 7.0% unemployment rate, is still up 86,000 jobs (+1.1%) year over year. Alberta is up 76,000 (+2.9%) over the year and is, in Desjardins' words, the main source of job creation in Canada this year.

Youth unemployment in Canada: are young workers hit hardest?

Young people lost 48,000 jobs in September, roughly 70% of the national net loss, and 67,000 over two months. Yet the youth unemployment rate was little changed at 13.0% because 50,000 young people also left the labour force. It is lower than a year ago, but far above the 10.8% pre-pandemic average.

Employment among 15- to 24-year-olds fell 48,000 (-1.8%) in September, the second monthly decline in a row, bringing the two-month drop to 67,000 (-2.4%). The youth labour force shrank by 50,000, so the youth unemployment rate barely moved, to 13.0% from 12.9% in August. A year earlier it was 14.6% (as revised), the highest since 2010 outside the pandemic years.

Within that group, Desjardins' reading of the data shows a split: unemployment for 15- to 19-year-olds rose 0.7 points to 19.3%, while for 20- to 24-year-olds it fell 0.2 points to 9.9%. Teenagers, who rely on part-time and entry-level work, are having the hardest time.

Students had a somewhat better summer than in 2025. StatCan's August release put the unemployment rate for returning students aged 15 to 24 at 15.6% in August, and the May-to-August average at 15.9%, compared with 17.9% in summer 2025. The September report did not give a separate student figure.

Full-time vs part-time: September's losses were split almost evenly, with full-time down 35,000 (-0.2%) and part-time down 33,000 (-0.9%). In percentage terms, part-time work was hit about four times harder, which fits with losses among young workers. Core-aged women (25 to 54) also lost 28,000 jobs, and their unemployment rate rose 0.3 points to 5.3%.

Is September a one-month blip? What the margin of error says

September's 68,000 loss is about 2.4 times the LFS standard error of roughly 29,000, so it is very likely a real decline, but its true size could be anywhere from about 10,000 to 126,000 (95% range). August's 42,000 loss is not statistically clear at that level. Smoothed over three months, Canada lost about 11,700 jobs a month.

The LFS is a household survey, so every monthly number has sampling error. A Statistics Canada analysis put the standard error of the monthly employment change at about 29,000 (28,900 in its example), meaning a 95% confidence range of roughly plus or minus 57,800. StatCan's own releases flag changes only when they are significant at the 68% level, a lower bar.

Our reading: September is not just noise, but it is also not proof of a recession. BMO's Robert Kavcic told The Canadian Press there was no way to sugar-coat a very bad print, while noting that smoothed six-month data still show modest gains. Our six-month average of about +8,800 a month agrees: the labour market has stalled rather than collapsed. Desjardins noted total hours worked fell 1.5% in September and were up only 0.1% from a year earlier, which is the figure to watch for GDP.

Are US tariffs causing Canada's job losses?

Not yet, on the evidence so far: manufacturing lost 13,000 jobs in September, but most of the losses came from non-trade sectors like education and health care. StatCan has flagged higher layoff rates in US-export-dependent industries, and the Bank of Canada calls the new tariffs a risk, so this could change.

September was the first full month after a new round of US tariffs on Canadian exports. In its August release, StatCan noted that layoff rates in industries dependent on US export demand averaged 0.9% over the 12 months to August, compared with 0.7% in other industries. The Bank of Canada's 2 September rate statement said new US tariffs and Canadian counter-measures followed the collapse of trade talks and that 'new US tariffs and threats of further action pose risks' to the recovery.

But the September losses do not look like a tariff shock. KPMG Canada's Daniel Hyun said most losses came from non-trade-facing sectors and called blaming tariffs 'premature', according to The Canadian Press. Manufacturing is little changed year over year after August's 22,000 gain. The fair verdict is: tariffs are a risk to watch in the coming months, not the cause of September's drop.

What do the job losses mean for Bank of Canada rates and mortgages?

Weak jobs lower the odds of a Bank of Canada rate hike on 28 October, but they do not make a rate cut likely while inflation is 3.1%. Market odds of an October hike fell to about 25% from about 40% after the jobs report. Some forecasters still expect a hike in December or early 2027.

The Bank of Canada held its policy rate at 2.25% on 2 September (Bank Rate 2.5%, deposit rate 2.20%). Its next decision, with a new Monetary Policy Report, is on 28 October 2026. Unlike most of the past two years, the debate is between holding and *raising* rates. Consumer prices rose 3.1% in the year to September, driven by gasoline (up 27.8%); excluding gasoline, inflation was 2.2%.

Before the jobs report, high energy prices had pushed expectations of a Canadian hike higher; the Bank's September statement warned energy costs could spread to other prices. After it, LSEG data cited by The Canadian Press showed the odds of an October quarter-point hike falling to about 25% from about 40%. TD's Andrew Hencic expects a hold; KPMG still expects a December hike to 2.5%; Desjardins forecasts the next hike in the first quarter of 2027.

For people renewing a fixed-rate mortgage, the Bank's overnight rate matters less than government bond yields, which lenders use to price fixed terms. Weak Canadian jobs data tend to pull yields down, but global inflation and energy prices can push them the other way, so compare several lenders before you renew.

What should job seekers and newcomers do now?

Expect searches to take longer: only 30.6% of unemployed Canadians found work within a month in September, versus 36.5% before the pandemic. Target sectors and provinces still hiring, apply for EI quickly if you lose work, and avoid sectors where public funding is shrinking unless you have a firm offer.

1. 1
   Plan for a longer search

   With a job-finding rate of 30.6%, budget for several months, not weeks. If you are employed but uneasy, start looking before you need to.

2. 2
   Follow the hiring, not the headlines

   Alberta added 23,000 jobs in September and 76,000 over the year. Private-sector employment is up 163,000 year over year. Repair, maintenance and personal services grew. Public education and Quebec are the weak spots.

3. 3
   Apply for Employment Insurance right away

   If you lose your job, apply online with Service Canada as soon as you stop working, even before your record of employment arrives. About 542,000 Canadians were on regular EI benefits in June 2026 (preliminary), slightly fewer than a year earlier, so the system is not overloaded.

4. 4
   Newcomers: get credentials and references moving early

   StatCan's September release did not break out recent immigrants, but a low-hire market tends to favour candidates with Canadian references. Start credential recognition, use free settlement employment services, and consider part-time or contract roles in growing sectors as a bridge.

5. 5
   Students and young workers: widen the net

   Youth employment fell 67,000 over two months. Apply to private-sector employers and trades, which have been steadier than public institutions, and look at co-op or apprenticeship routes.

6. 6
   Borrowers: stress-test your budget

   Run your mortgage or line of credit at 0.25 to 0.50 points higher than today. On a $400,000 variable mortgage that is about $57 to $115 a month in our example above.

What happens next: key dates for Canada's job market

The two dates to watch are 28 October 2026, when the Bank of Canada announces its rate decision, and 6 November 2026, when Statistics Canada publishes October jobs data. A third weak month would make a 'stall' look more like a downturn.

1. 28 October 2026: Bank of Canada decision and Monetary Policy Report Most economists quoted after the jobs report expect a hold at 2.25%. Watch the Bank's view of the labour market and whether it signals a hike later.
2. 6 November 2026: October Labour Force Survey If employment rebounds, September will look like a public-sector correction. Another loss, especially in private-sector jobs or hours worked, would be a clearer warning.
3. Ongoing: tariffs and energy prices The US tariff dispute and high gasoline prices are the two forces most likely to shift both jobs and rates over the winter.

Claims vs evidence: Canada's September jobs report

Frequently asked questions

How we built this analysis

• Monthly employment changes and unemployment rates are Statistics Canada's first published, seasonally adjusted Labour Force Survey estimates from each month's release in The Daily. July 2026 (+75,000) is derived as the August release's April-to-July total (+181,000) minus May (+88,000) and June (+18,000). May 2026's 6.6% rate is derived from the June release.
• Year-to-date change: -25,000 - 84,000 + 14,000 - 18,000 + 88,000 + 18,000 + 75,000 - 42,000 - 68,000 = about -42,000. Rounding in the published monthly figures means the unrounded total differs slightly.
• Sampling error: 95% range = estimate plus or minus 2 x 28,900 (StatCan's published standard error example). September: -68,000 plus or minus 57,800 = -125,800 to -10,200. August: -42,000 plus or minus 57,800 = -99,800 to +15,800. Ratio: 68,000 / 28,900 = 2.4 standard errors.
• Shares of the national net loss: Quebec 49,000 / 68,000 = 72%; youth 48,000 / 68,000 = 71%; educational services 35,000 / 68,000 = 51%. Public-sector four-month total: -31,000 (Jun) - 27,000 (Jul) - 20,000 (Aug) - 70,000 (Sep) = -148,000.
• Mortgage illustration: payment = P x i / (1 - (1 + i)^-n), with P = $400,000, n = 300 months, i = annual rate / 12, at assumed rates of 4.50%, 4.75% and 5.00%.
• Economist views (BMO, TD, KPMG, Desjardins) and market odds (LSEG) are reported as opinions and estimates, not official data.

Limitations

The LFS is a sample survey and monthly changes are revised; small-province figures carry wide margins of error. The 29,000 standard error comes from a 2014 Statistics Canada paper and the current value may differ. StatCan's September release did not give a reason for the education decline, a separate student figure or recent-immigrant data, so links to international student permits are economist interpretations. EI figures are preliminary June 2026 data, the latest we could verify. Rate outlooks are forecasts and can change quickly. The mortgage table is illustrative only. This page is for information and is not financial, legal or career advice.

Spotted an error? See our corrections policy. Read how we work in our methodology and editorial standards.

Sources

1. Statistics Canada
   Labour Force Survey, September 2026 (The Daily, 9 October 2026)Headline, industry, public/private, youth, provincial figures, job-finding and layoff rates, next release date
2. Statistics Canada
   Labour Force Survey, August 2026 (The Daily, 4 September 2026)August change, April-to-July total, returning students, tariff-exposed layoff rates
3. Statistics Canada
   Labour Force Survey, June 2026 (The Daily, 10 July 2026)June and May changes, public-sector decline
4. Statistics Canada
   Labour Force Survey, April 2026 (The Daily, 8 May 2026)April change, 6.9% peak, 7.1% peak in Aug/Sep 2025, February change
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   Labour Force Survey, March 2026 (The Daily, 10 April 2026)March change, February and March unemployment rate, revised Sep 2025 youth rate
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   Labour Force Survey, January 2026 (The Daily, 6 February 2026)January change and rate
7. Statistics Canada
   Labour Force Survey, September 2025 (The Daily, 10 October 2025)September 2025 unemployment rate
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   Labour Force Survey, September 2024 (The Daily, 11 October 2024)September 2024 unemployment rate
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   Labour Force Survey, September 2023 (The Daily, 6 October 2023)September 2023 unemployment rate
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    Economic Insights: Interpreting monthly changes in the Labour Force Survey (11-626-X, No. 33)Standard error of about 29,000 for monthly employment change
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    Canada sheds 68,000 jobs, unemployment rate up to 6.5% in SeptemberConsensus forecast, economist quotes, LSEG rate-hike odds
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    Canada: employment, 9 October 2026 (French)Hours worked, youth by age, Q3 GDP estimate, rate outlook