Canada’s economy was dealt another blow last month, and it wasn’t due to tariffs. Statistics Canada (Stat Can) data shows the unemployment rate climbed aggressively in May, hitting a new multi-year high. Despite the narrative of tariff-induced job losses, the country managed to add a few thousand jobs. Rising unemployment continues to be driven by an aggressive immigration strategy, which added four workers for every job last month.
Canadian Unemployment Rate Hits 7%, Highest Since 2021
Canada’s unemployment rate climbed 0.1% to 7.0% in May, up 0.7 points from last year. This marked the 6th consecutive increase and the highest rate since 2021. The economy is not alright—especially considering the sheer volume of the unemployed population.
Canadian Unemployed Population Nears 1.6 Million
Canadian unemployment in thousands of people.
Source: Statistics Canada; Better Dwelling.
The agency estimates the unemployed population grew 1.7% (+26.5k people) to 1.6 million in May. It represents an increase of 13.8% (+190k people) from last year, outpacing the brisk growth of the general population—driven by an immigration strategy that remains aggressive despite minor tapering. Canada hasn’t had this volume of unemployed people outside of its most serious economic recessions.
Canada Didn’t Lose Jobs Last Month, It Gained A Few Thousand
Meanwhile, Canadian employment was virtually unchanged (+8k jobs) at 20.98 million workers in May. To be blunt, this means the country added 1 job for every 4 workers in the month—a dangerously imbalanced ratio. In recent months, unemployment had been rising briskly but the country was just adding workers faster than it could create jobs. Job growth has since flatlined and the population continues to outpace it, despite a mild attempt at throttling immigration.
Canada’s Attempt To Use Immigration For Cheap Growth Is Backfiring
Canada is attempting to use immigration to boost its economy the way cheap credit is often used. By fueling excess demand, increased consumption creates economic activity and employment. However, just like cheap credit, it becomes counterproductive and inflationary for consumption. The economic stimulus is then turned into a drag on the economy, throttling growth and lowering its long-term prospects of success.
There’s a reason Canada’s aggressive strategy hasn’t been adopted elsewhere. Other successful countries can also just issue visas to grow its population by 2% per year, but they understand it’s a questionable proposition—both to the existing population and the immigrants who move only to realize the booming economy was largely a facade. Healthy economic growth is based on a healthy balance of immigration and natural family formation—not just an attempt to rapidly expand the workforce.
Carney was technically elected with a strong mandate. The people who elected him didn’t want immigration reform, they were afraid Trump would joke about the 51st state again. They would rather give the US an extra 1% of GDP than have any sort of sustainable future.
They did it. They made us long for the final days of the Trudeau gov, when he spoke against the immigration and promised reform.
Who knew the Boomers out east were such predators that they abandoned everything the party said was problematic, and didn’t realize Carney is in Trump’s pocket.
And don’t forget about the housing crisis! It is almost impossible to find a reasonable rental in the whole country because of the immigration policies and foreign students.
It’s all about transferring wealth from the young to the old, and from New Immigrants to Older Established Canadians… to buy votes.
Once upon a time, Canada was an egalitarian Nation….
“Canada is attempting to use immigration to boost its economy the way cheap credit is often used.”
Yep. There’s QE (Quantitative Easing), and QI (Quantitative Immigration). Both can make the numbers look better in the short term. But the long term effects can take a decade or more to be felt. Monetary and immigration policies are far too important to be employed in chasing arbitrary short term statistical benchmarks at the expense of the long term well-being of the country.
Judging by living in one of big cities, the place becomes less and less livable each year. Socially, those, who already here can’t form families in sufficient numbers in big part due to lack of societal cohesion. Affordability and job insecurity in general (outsourcing of everything and AI now) doesn’t help either. High immigration from one populous country in recent years in particular created non-white diasporas at workplaces where “proportional representation” and merit-based hiring gets circumvented. I only can wish good luck to everyone. And time will tell.