Oct 9, 2026
Economists expected Canada to add about 9,200 jobs in September. Not only were the economic predictions wrong, but the Canada’s economy shed 68,000, instead.
The job losses in September mark the second monthly drop in a row — and it arrives weeks before the Bank of Canada’s next rate decision on Oct. 28. That makes it the last look at the job market policymakers will get before they decide on how to use monetary policy to help the nation’s economy.
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If your mortgage renewal is coming up, you’re sitting on variable-rate debt, or your industry is starting to lay off staff, timing is everything right now. But weaker hiring doesn’t automatically mean cheaper borrowing — and who is losing work may matter more than how many.
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How bad was September’s jobs report?
Employment fell by 68,000 (0.3%) last month, according to the latest Labour Force Survey from Statistics Canada (StatCan), the federal agency that tracks the country’s economy and population.
September’s job losses were split pretty evenly between full-time and part-time positions, pushing the unemployment rate up to 6.5% — right back to where it was in January.
The September job loss comes right on the heels of a 42,000-job loss in August. That means that between August and September more than half of the 181,000 jobs gained from April to July were wiped out, though overall employment is still up 95,000 year-over-year.
And there’s another warning sign. The share of Canadians working or looking for work slipped to 64.8%, the lowest level outside the pandemic in 29 years, according to Canadian Mortgage Professional, a mortgage industry trade publication. StatCan largely attributes that slide to an aging population.
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Who is losing work right now?
Young Canadians got hit the hardest. Workers aged 15 to 24 lost 48,000 jobs (down 1.8%) in September alone, bringing their two-month loss to 67,000. Meanwhile, women aged 25 to 54 lost another 28,000 positions.
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By industry, educational services cut 35,000 jobs, health care and social assistance shed 23,000 and manufacturing lost 13,000. To put that in perspective, education employment is now down 4.2% from a year ago.
What are causing these job losses? Economists point to a couple of likely culprits. The drop in education jobs might stem from a slowdown in international student enrollment, while CIBC Senior Economist Andrew Grantham noted that manufacturing losses could mean recent U.S. tariffs are already starting to bite.
Regionally, Quebec lost 49,000 jobs, while Ontario and British Columbia each lost 20,000. Alberta was the only major province to add jobs, gaining 23,000.
Will the Bank of Canada cut rates on Oct. 28?
There’s been quite a bit of discussion and speculation about what the Bank of Canada will do at the next rate announcement, scheduled for Oct. 28. The BoC, which sets the key interest rate driving variable mortgages and lines of credit, has stuck with 2.25% across seven consecutive rate decisions this year.
Meanwhile, Statistics Canada’s consumer price index showed inflation at 3.0% in August, pushed up by gasoline prices that were 22.8% higher than a year earlier.
And that’s why September’s job losses matter. Andrew Hencic, director and senior economist at TD Economics, the research arm of TD Bank, said the recent job report will “pour some more cold water on near-term rate hike expectations.” He noted markets were pricing in roughly 27% odds of an October hike, and TD expects Canada’s central bank to hold rates, yet again, in October.
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What does a rate hold mean for your money?
If you have a variable-rate mortgage or a HELOC, a hold means your interest rate isn’t moving. It doesn’t offer any relief, but at least your wallet won’t take another hit.
If your mortgage is up for renewal, keep in mind that fixed rates are driven mainly by bond yields, not the BoC’s policy rate. Plus, a weak jobs report doesn’t guarantee you’ll see lower fixed mortgage rates by the time you actually sign on the dotted line.
So, if you’re counting on a cut to ease your monthly payments, a hold on Oct. 28 would push that relief further out.
What to do now
Two bad months don’t make a recession, but they’re a good prompt to shore up your finances:
- Top up your emergency fund, especially if you work in education, health care, manufacturing, or an entry-level position
- Know what Employment Insurance (EI) would actually pay: for most people, it’s 55% of average insurable weekly earnings, to a maximum of $729 a week, according to the Government of Canada
- Pay down variable-rate debt while rates are on hold
- Start shopping your mortgage renewal early, and base your numbers on today’s actual rates instead of hoping for potential cuts down the road
- Mark Oct. 28 for the rate decision and Nov. 6, when StatCan releases October’s jobs numbers
For most households, the smartest play is to build your budget around the rates you’re looking at today. As CIBC economists put it in a note on Friday, the softness supports their view that the BoC will “remain patient and keep interest rates on hold, for now.”
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Amy Tokic is an SEO content editor for Money.ca. She holds a B.A. in Communications from the University of Windsor. Amy is an award-winning author and has been writing professionally for 15 years, publishing articles in the lifestyle and health sectors.
