Canadian unemployment is rising, and the country’s largest province is leading the trend. Ontario’s unemployment rate climbed to 7.9% in May—nearly a full point above the national average. A new report from BMO warns the province’s unemployment rate is now at a level not seen outside of the worst recessions. The problem is set to worsen as job creation, already failing to keep pace with labour force growth, slows even further.
Ontario Unemployment Rate Surges To Recession Highs
Ontario unemployment rarely reaches this level—and when it does, it’s really bad news. BMO warns that the province’s 7.9% unemployment rate hasn’t been seen in recent history outside of the pandemic and the global financial crisis. It’s also considerably higher than the national average.
“Note that the 0.9 ppt gap versus the national average is now one of the widest on record, also only seen during those two periods,” explains Robert Kavcic, Senior Economist at BMO.
He attributes the recent surge to an oversupply of labour.
Ontario Isn’t Losing Jobs, It’s Attracting Excess Workers
As explained last week, Canada’s rising unemployment is due to its aggressive population growth, not job losses. Canada is adding workers faster than it can create jobs. Since Ontario is the biggest recipient of immigration inflows, it’s no surprise that this problem is amplified in the province.
“The cause of Ontario’s rising unemployment rate since late-2022 has been almost entirely on the supply side. That is, labour force growth topping a torrid 4% y/y at one point could not possibly be absorbed by even a solid job market,” says Kavcic.
He further notes that the province is also a hub for non-permanent residents. This group includes international students and temporary foreign workers, both of which contribute to the labour surplus.
Ontario’s Job Market Is Moving From Oversupply To Lack of Demand
Ontario’s problems may get a lot worse in the coming months. The bank notes that job growth has lagged behind population growth, but it has at least remained steady. That changed in May, with job growth slowing to just 0.7% annually—nearly a third of the labour force’s growth rate. That doesn’t bode well for the outlook, even if the province slows its labour force growth.
“Looking ahead, we see the confidence-sapping trade war impacting Ontario relatively hard,” warns Kavcic. “This would morph jobless rate increases from being driven by supply, to now being driven by stalled employment growth.”
If there’s so many people in Ontario why do cities like Toronto suddenly feel like ghost towns? The traffic is clearly a by-product of throttling and lane reduction.
Sorry to stray from real estate but this a pretty interesting point. I noticed Ontario is the only hold out on the new Stat Can traffic analytics dashboard and both Toronto and Ontario stopped doing any reporting since 2021.
Since the data is automated, I’m guessing the scam artists running both regional governments know the data isn’t favorable.
shit liberals. our polices is for youw own good and if yoi doubt it you will be cancelled or made homeless. just reading comment policy if this site is enough to understand it (it least they are saying it straight , others just lie and do it)
Standard real estate bubble setup in Ontario. Real estate bubbles drain productive spend and discretionary consumption, which is directly related to sustainable job growth.
They could have had a healthy real estate markets with sustainable job growth but they’re intentionally trying to crash things so they can saddle the public with high leverage debt and run off to whatever private industry crime spree they’re going to do next.
as an old timer that lived through the last bubble in the early 90s, this is basically the best description of what happened and it all feels very familiar too.
Most of the government isn’t old enough to have lived through it, so all they can remember is after 20 years of stagnation is worked out.
Canada is one of the last countries that is willing to destroy itself with massive amounts of immigration
Unemployment? Not if you speak Hindi or Punjabi.
Its scary that we knew that the trudeau/carney govt was a disaster for the economy. Somehow, almost asnif they planned it this way, teump became the boogie man, and apparently thaf meant we could trust the same peiple who made this kezs to fix it?
The problem is, carney, much like trudeau and freeland, never does what he says he will, nor does he acknowlege the absolite destruction this govt has caused?
Im waitinv for carbey to start saying its a vibe ssion again?
On top of being the worst possible people to fix anything, instead of dealing with trump, carney seems far more interssted in spending hundreds of billions on ‘defending’ Europe?
So the food banks, shelters are overfliwing with people, young peopme are leaving canada because you cant agford to live here, but getting canada to 2% of gdp spend on weapons is important?
Beyond the obvious fact that he never borhered to tell us thezs plans during the election, has done zero about trump or the economy, and now wants to run 500B per year deficits for the next 4 years to almost triple our national debt?
The only possible.interest in this is corruption, fraud and bribes. As for the people in Ont, yoh kept voting for these people, they.have effectively destroyed the.middle class in 9y, so why would anyone not a uber rich beneficiary of theid largese vote for them?
What will happen now is witha 11% drop in exports already, unemplyment will quickly be 10% in central canada. Hoysing will collapse, and we will hace a huge recession.
The real question is if we hadnt wasted 6 months with trudeaus leaving, carney’s coronation, an election would we have been able to gef back on track.by now.
I feel like this might not be a true reflection for specialized professions/skilled trades (especially in rural Ontario. But…. I could be wrong.
Blame liberals and millions of immigration. Sad. I live in the north and there’s immigrants everywhere.
Four years ago I was called racist for pointing out the inevitable problem of bringing in hoards of foreigners with limited English and education. Never mind many of my friends are Punjabi themselves who worried about the same issue. I guess in a bitter sweet irony, the immigration problem will solve itself.
I just don’t understand what the play is here. When I immigrated to Canada in 2000 with my parents, there were hard caps, a strict points system based on the types of labour the country needed and fewer loopholes. Now it just seems like open season and the people (especially Gen Z and Millennials) already established here will be the ones paying for it. What is the end goal? To replace the aging boomers leaving the workforce? The immigrants coming here aren’t taking those jobs. I just don’t understand what the end goal is other than thrusting the country into misery
This economy is a product of the politicians loading the country with foreign born people that will keep them in office. I came to Canada as an immigrant honestly and went thru all of the hoops in the mid 1970’s. I have never accepted handouts because of my belief that handouts are specifically for the “truly needy”. The 2025’s version of Canada has allowed the elected officials to create a permanent problem that will become exponentially worse with time. Ottawa’s policies and this Hell Bent reliance on government handouts are a magnet for abuse. Canadians will reap what they sew unfortunately. Let’s hope I’m wrong.
There is absolutely 2 issue with Ontario right now.
1/ over loaded immigrants competing the job with Canadian
2/Over greedy from real estate builder
and real estate agents
Perhaps the reason for the rising homelessness and unemployment is the dire lack of affordable housing. With over 200,000 homeless individuals in Ontario, we should all feel a sense of shame. It seems that real estate moguls are recklessly burning down North American forests to develop new properties, selling land and homes to foreign buyers, including those from China.
I believe that former President Donald Trump should investigate this alarming trend and examine the history of developments built on previously scorched forest land. We must hold these developers accountable and consider charging them with acts of environmental terrorism.
Furthermore, the empty homes owned by foreign nationals, particularly those who are not even occupying them, should be seized and returned to the people. As the Chinese have stated, they can win a war against a country without firing a single bullet; if they were to do so, it would be through economic means.
It’s time to take action and prioritize the needs of our citizens over the profits of a few.
No country owes us jobs. Yet it was a winning election slogan “they take away our jobs”. Actually, “they” take away educated and energetic people and give them jobs. Whoever is an immigrant will confess that he/she moved here because of better jobs perspective. For the opposite reasons we are losing people now.
Government should work on creating jobs with deregulation and diminishing capital gains tax that didn’t exist 30 years ago. That’s how country grew. Now it’s going downhill. It will take a few more years of decline for people to realise and good leaders to reverse course.