Toronto’s real estate bubble just lost another key pillar: jobs. Statistics Canada (StatCan) data shows the Toronto CMA unemployment rate is nearing double-digits, with Mississauga and Brampton already well above 10%. What was once one of the country’s strongest job markets is now cracking—raising questions about short-term value and the long-term sustainability of a housing market once seen as untouchable.
Greater Toronto’s Job Market Is Spiraling: Unemployment Surges
Toronto CMA unemployment rate (unadjusted 3-month average).
Source: StatCan; Better Dwelling.
The Greater Toronto job market is crumbling faster than the national average. The CMA’s unemployment rate hit 9.4% in August, up 0.1 points from July and 0.8 points higher than last year. That’s well above the national rate, despite being a major landing spot for job seekers and newcomers.
Unemployment this high is rare in Canada. Toronto CMA hasn’t seen a rate this elevated outside of the pandemic since 2012, and even then, it hovered at or above 9.4% only briefly during the aftermath of the Global Financial Crisis. The region’s population has since grown 20%, magnifying the fallout.
Toronto Has More Unemployed People Than Halifax Has Workers
Toronto CMA unemployed population (unadjusted 3-month average).
Source: StatCan; Better Dwelling.
A nearly double-digit jobless rate translates to a staggering number of people. StatCan estimates 390.3k Toronto CMA residents were unemployed in August, up 11.1% from last year. That’s not just high—it’s 22% of all unemployed in Canada, concentrated in a single economic region.
To put that in perspective: Toronto now has more unemployed people than the entire labour force of Greater Halifax. Add Fredericton, and it still falls short.
City of Toronto Unemployment Rate Nears 10%; Brampton & Mississauga Even Higher
Canadian CMA unemployment rates, with selected cities in the Toronto CMA highlighted in blue (unadjusted 3-month average).
Source: StatCan; Better Dwelling.
The City of Toronto job market is even worse than the CMA and the national average. The City’s unemployment rate hit 9.8% in August, up 1.1 points from last year and 0.4 points above the CMA average. That’s 1.8 points higher than the national rate—making job seekers in Toronto 22% more likely to be unemployed than the national average. Only two CMAs have higher unemployment rates.
Meanwhile, some neighbouring cities within the CMA are faring much better. Vaughan’s unemployment rate was 7.8%, up 0.4 points on the month. Markham came in at 7.9%, down 0.4 points. Both consistently outperform the region and remain below the national average.
At the other end of the spectrum, Brampton’s unemployment rate has surged to 11.7%, while Mississauga hit 11.1%. These cities routinely post higher jobless rates than Toronto, pointing to deeper, structural economic divergence within the region.
Toronto Real Estate’s Long-Term Risk: A Collapsing Job Market
Toronto’s job market erosion poses both immediate and structural risks to real estate. The city has some of the highest shelter costs in Canada, and while policymakers are trying to prop up demand with easier credit, leverage doesn’t help people without incomes. That’s likely why flooding the market with cheap credit hasn’t worked as expected.
The unemployed don’t drive discretionary spending or housing demand. Instead, they’re more likely to leave for more affordable markets as costs rise and job prospects fade.
Longer term, the city’s concentration of high-value industries like finance, insurance, and healthcare, adds risk. These sectors fueled population growth and attracted some of the world’s most talented people. However, if these industries unwind or decentralize, Toronto will struggle to compete with more affordable cities that offer a higher quality of life.
Toronto should rename more streets. Clearly they’re not doing it fast enough.
Still in disbelief that it’s happening but it makes sense with the govs trying to borrow as much as possible, as fast as possible. If prices fall in nominal terms, policymakers have a real doozie on their hands as the assets backing the debt are worthless.
Whether they’re borrowing to raise inflation and lower the real burden of the debt or this this is “the last act of government is to rob the treasury” is up to the interpreter, but the end result is the same—stagflation.
Keep some cash aside, you might need it.
Mark my words—when this mess gets much worse than anyone anticipated, the focus is going to fall on OSFI for allowing inflated appraisals and allowing lenders to get off with such absurdly high leverage loans.
Hopefully someone quantifies how much they’re handing out via the CMHC to prevent builders from collapsing. This is by far the biggest bailout in Canadian history and so few understand what’s happening.
Jim, you are 100% correct. The bigger issue is the CHMC was never designed to bankroll this kind of stuff. In fact, actuarily this is anti selection. When the market starts to go bad, to use the unfunded insurer, CHMC, to fund developers to keep building to try to maintain price is like pouring jet fuel on a fire – a bad idea.
The CHMC had a mandate to insure first time homebuyers to buy their own houses. BDC, EDC, and other federal agencies were there to finance speculators, developers, and so on. The entire funding model of the CHMC is that it is a insured risk, and that the principal is generally covered by the property. If prices fall 50%, and everyone is underwater on their mortgages, many first time homebuyers may be able to pay their mortgages, mitigating the risk. However, if the business of the borrower is leveraged speculation, building, etc., they will all FAIL.
To that end the CHMC maintains minimal policy reserves, despite potential liabilities of 1.5-2Tr. Add to that liabilities for the CDIC, BDC and EDC, we could see a major collapse of Canada’s sovereign debt as the feds try to bail out the banks? But I would ask why the banks charge 50bp lower rates for ‘high ratio’ mortgages when that risk is only mitigated by a govt that is insolvent with no current path to solvency? If this continues and nothing says it wont, we are not only facing a major recession, but a serous financial crisis for our govt. This is way outside of OFSI, we will be under IMF austerity.
We are told that RE was 40 % of the economy, in the GTA it was likely much higher than that.. so when RE collapses so does the economy..
The government doesn’t have, can’t borrow, or can’t print enough money to save everybody..
So the paradigm shift created by Harper in 2009 was never intended to run for 16y. Easy Credit was a way to avoid a credit risk collapse as banks couldnt meet counter party transactions, and began to collapse, taking sovereign debt with them. This led to the IMF, and other groups forcing austerity in places like Greece and Portugal.
The problem was our current PM, who was not the author, but the technician in that paradigm shift in 2009, didnt get the memo. First in the UK, and now in Canada he has used what is effectively quantitative easing to alleviate credit issues in banking. The problem is when private banks and central banks see no danger to increasing the M3 money supply by 2-3 times while the economy treads water, they are ignoring that this is hyper inflationary.
So while Carney’s sidekick Freeland spent lots of time telling us how ‘good’ our CPI was, SC has been fudging those numbers for years. Canada’s monetary expansion is not only one of the biggest in history, it was coupled with job killing policies by the Feds. The ‘green’ transition cost tens of thousands of high paying jobs, and replaced them with nothing, with the exception of even more subsidies for industries that havent been productive since the 1970s – manufacturing, distribution, etc.
This brought us here. No one would invest in Canada today because the cost of startup, staff, and exports are catastrophically high. We also have a bunch of leaders who cant stop making us look even worse than we are for investment. What did Canada think was going to happen when we caled the USA a hostile and unreliable trading partner? We are just lucky that almost no one in the USA knows who Carney, Ford or any of the rest even are.
So, while delusion led us here, hiring the same guy to fix the mess he created just shows that Canada’s eastern areas are their own biggest enemies. Carney has zero inducement to ‘fix’ the trade issues with the USA, because then he would need to explain why everything is so bad. So despite him saying he was the guy to fix this, him and his sidekicks would be far far worse off if they did make a deal. So expect the ‘talks’ to drag on into a CUSMA re negotiation and into 2027, all while Mexico and China replace Canada.
Does anyone wonder why AB wants to leave?
Your first step to an actual recovery starts with getting Carney out of office. What an idiot.
What does that say about those who voted for him and the Trudeau enablers, again, and again, and etc.?…
Brainwashed.
Liberals please bring another two or three millions foreign workers to Canada.