Slower immigration and rising unemployment reshape Canada’s job landscape and cool rental growth
Canada’s job market is tightening, with job vacancies dropping to their lowest level in nearly a decade and unemployment on the rise, according to new Statistics Canada data.
In August 2025, there were 457,400 job vacancies nationwide—down from 435,500 in August 2017—while the unemployment rate climbed to 7.1 percent, up from 6.7 percent a year earlier.
The job vacancy rate now stands at 2.6 percent, signalling increased competition for fewer available roles, particularly in sectors such as transportation, warehousing, information and cultural industries, and retail and wholesale trade, as reported by Statistics Canada.
At the same time, Canada’s population growth has slowed dramatically following the federal government’s decision to reduce immigration targets, a move that is beginning to stabilize both the housing and labour markets, according to TD Economics.
Beata Caranci, senior vice-president and chief economist, notes that the revised immigration plan is “beginning to pay dividends in returning balance to a stretched social infrastructure.”
Population growth has tapered from a multi-decade high of 3.2 percent in the second quarter of 2024 to just 0.9 percent year-over-year.
This slowdown is easing pressure on the rental market, with TD Economics forecasting rent growth of three to 3.5 percent in 2026—about half the pace seen in 2024.
The impact of these shifts is most pronounced in British Columbia and Ontario, where a higher proportion of temporary foreign workers and international students had previously driven demand.
Caranci highlights that, without the adjustment to immigration targets, the unemployment rate could have surpassed eight percent this year.
Instead, net job losses totalled 40,000 between July and September 2025, with another 40,000 positions at risk, but weaker labour-force growth is expected to mitigate further increases in unemployment.
Meanwhile, average weekly earnings rose three percent to $1,312 in August, following a similar increase in July, though earnings remained unchanged month over month, as per Statistics Canada.
Caranci concludes that immigration policy must remain responsive to changing market conditions and skills demands, noting that Canada’s earlier surge in labour force growth—nearly four times its pre-pandemic rate—eventually outpaced the country’s capacity to integrate new workers.
The current recalibration, she suggests, is helping to restore equilibrium across key economic sectors.
