Canadian Unemployment Hits Highest Non-Pandemic Rate Since 2017

Canada managed to add tens of thousands of jobs last month, but it added even more workers. Statistics Canada (Stat Can) data shows the country added a healthy 51k jobs in November. Unfortunately the rise in workers was significantly higher, leading to the highest non-pandemic unemployment rate since 2017. It’s also getting harder to exit unemployment, with the agency noting 1 in 5 are now considered long-term unemployed. 

Canada Added 51k Jobs Last Month, Mostly For Core Aged Men

Canada managed to add tens of thousands of jobs, and it would have been an impressive volume prior to 2020. The country’s employed population rose 0.2% (+51k jobs) in November. The agency notes that core aged (25-54 years old) men saw the bulk of gains, with the population rising 0.6% (+45k jobs) last month. However, this follows the 0.5 point decline observed over the two months prior.

The biggest drop was observed in women 55 to 64 years old. This population declined 1.3% (-20k jobs) in November, a potential red flag for the economy. Older workers being dismissed tend to have a more difficult time re-entering the workforce. 

Canada Hits Highest Non-Pandemic Unemployment Rate Since 2017

Canada’s job gains would have been big prior to 2020, but it failed to keep up with 2024 population growth. The unemployment rate climbed 0.3 points to 6.8% in November. Stat Can notes this is the highest rate since 2017, excluding the pandemic (2020-2021). The Sahm Rule in economics states that an economy is showing early signs of recession when the rate rises at least 0.5 points. Since April 2023, the unemployment rate has climbed 1.7 points—more than enough to clear any margin of error. 

1 In 5 Jobless Are Now Considered Long-Term Unemployed

Compounding the problems with increased unemployment is the rise in long-term (27+ weeks) unemployment. Over 1 in 5 (21.7%) unemployed residents are now considered long-term unemployed, up 1.7 points from last year. It’s not just a problem for the people who will experience a strain on their finances.

Rising long-term unemployment means a mismatch between labor and skills. As a result, the mismatch is unlikely to be resolved in the short term, meaning more difficulty exiting unemployment. These individuals then see their skills become stale, often requiring upskilling and/or retraining before re-entering the workforce. It’s an expensive liability brewing for a country, even beyond the reduced consumption and tax revenue. 

Canada added jobs last month but not nearly enough for the number of people it added. Population growth is slowing, but clearly not enough since the country’s addition of +50k jobs wasn’t enough to prevent unemployment from accumulating. It’s also worth noting that may sound like recent immigrants are the ones who face the brunt of unemployment, but that’s not necessarily the case. Often people who compete for similar low-experience roles will see an uptick in unemployment, such as young adults and seniors who may be looking to supplement their pension.