Canada just entered a technical recession, but it’s also apparently in the middle of a hiring boom? Statistics Canada’s (StatCan) Labour Force Survey (LFS) shows a sharp climb in employment in May. In fact, it marks the third-most jobs added to employment outside of the pandemic recovery. That doesn’t quite jibe with the recession and weak job vacancy data points, does it? There’s a good reason for that—most of the gains are taxpayer-funded and temporary.
Canada Just Saw The 3rd Biggest Job Gains On Record (Ex-Pandemic)
Canadian seasonally adjusted employment surged a whopping 88,000 (+0.4%) jobs to 21.12 million in May. Part-time losses were more than offset by full-time roles, which climbed 154,000 (0.9%). It was the first significant gain since November, and reversed much of the 112,000 jobs lost in the first 4 months. The market consensus estimate expected 10,000 jobs, but got a historic jump instead. Yup, historic!
Outside of the pandemic’s initial recovery bounce, only two months have ever been bigger. In December 2024, the economy added 91,000 jobs, the largest gain since the recovery. Then there were the 106,500 jobs added in April 2019, the largest on record pre-2020. Last month’s move was so big it’s almost hard to believe, especially when considering GDP and job vacancies.
Canadian Unemployment Plunges To A 4 Month Low
Canadian seasonally adjusted unemployment rate, by age group.
Source: StatCan.
The job gains pulled the unemployment rate 0.3 points lower to 6.6% in May, its lowest mark in 4 months. The rate fell across almost every age group, including 15- to 24-year-olds, where it fell 0.9 points to 13.4%. Workers 55 and older are the exception, who saw the rate climb 0.1 points to 5.0%, though still the lowest of any age group.
Construction, Information, Culture & Recreation Lead Job Gains
Gains were broad with only 11 of 16 industries showing gains last month. The industries leading the way higher were:
- Construction: +27,000 jobs
- Information, culture and recreation: +19,000
- Transportation and warehousing: +18,700
- Accommodation and food services: +17,000
The private sector added roughly 56,000 jobs (+0.4%), while the public sector added 20,000 (+0.4%). Both grew at roughly the same pace, and both have a small catch.
Fleeting Job Gains? Over 287k Temporary Jobs Were Added In May
The biggest hidden driver of the employment gains is likely StatCan itself. The agency kicked off Census 2026 with a hiring blitz of 32,000 temporary workers. Collection runs from March to July 2026, and door-to-door follow-ups start in June. It’s fair to say a good chunk of those public jobs added in May are temporary. That also means a big pullback to public sector employment is coming in August and September.
At least there’s private sector gains, right? Those appear to be mostly temporary too. The biggest gains were in construction, where investment was driven by public spending. This includes civil infrastructure such as public transit, power, and data centers. These are public projects, funded by taxpayers and debt. However, they’re subcontracted to private firms and thus appear as private employment.
Information, culture and recreation had a similar setup. These aren’t traditional public works, but heavily subsidized events like the FIFA World Cup, kicking off in June. The events provide a big boost to employment and the economy, but the gains are temporary.
Canada’s Latest Job Report Brought To You By The Letter T
Unadjusted temporary employment climbed 287,400 to 2.33 million jobs in May, almost tripling permanent gains. It’s added 57,600 (+2.5%) jobs since last year, outpacing general employment. StatCan doesn’t provide a seasonally adjusted version of those numbers, but it reinforces the point: much of the apparent strength is arriving through temporary work. The population is aging and shrinking, but somehow the retirement cliff only requires temporary replacements?
None of this should downplay the importance of temporary jobs or stimulus. Most job seekers would agree that a temporary job is better than no job. Public stimulus can also kick-start an economy in a rut. However, when either of these segments is the only driver of growth, the economy isn’t booming—it’s on life support.
