Trade war pushes Canada jobless rate to 7%

Canadian Prime Minister Mark Carney arrives for a press conference on Parliament Hill in Ottawa on June 6, 2025. (Photo by Dave Chan / AFP)

MONTREAL, Canada — Canada’s unemployment rate rose to 7 percent in May, the statistics agency said Friday. This was the highest level since 2016 excluding the pandemic. Sectors most vulnerable to US President Donald Trump’s trade war lost jobs.

Statistics Canada said that in May, there were 1.6 million unemployed in the nation with a population of 41.6 million.

That marked a 13.8-percent increase compared to May of last year and the highest unemployment rate Canada has recorded in a decade. That excludes 2020 and 2021, when the Covid-19 pandemic upended the labor force.

READ: Canada Q1 growth up but Trump tariffs starting to hurt

Royal Bank of Canada senior economist Claire Fan said the data highlighted the early impact of Trump’s tariffs.

“Sectors that are the most exposed to trade headwinds, namely manufacturing and transport and warehousing shed jobs,” Fan said.

She specifically pointed to the city of Windsor, where the unemployment rate hit nearly 11 percent last month. Windsor is the heart of a Canadian auto industry directly targeted by Trump’s tariffs.

READ: Celebrating 75 years of Canada-Philippines kinship

But the job figures still beat some analysts’ expectations. This indicates that the Canadian economy is showing resilience in the face of Trump’s protectionism.

“Job growth has looked very weak this year, but importantly the labor market has not shown signs of major destruction tied to the trade war just yet,” said Royce Mendes. Mendes is head of macro strategy at Desjardins.