Canada December 2025: Unemployment Rises Amid Modest Job Growth

(CANADA) — statistics canada reported modest job growth in december 2025 even as the unemployment rate rose, a combination that economists tied to a larger pool of people looking for work rather than a wave of layoffs.

The Labour Force Survey showed net employment increased by approximately 8,200 jobs, while the unemployment rate climbed to 6.8% from 6.5% in November. The employment rate was unchanged at 60.9% of the population aged 15+.

for job seekers, including international students, newcomers and skilled immigrants, the December mix points to a labour market that is still adding jobs but feels more competitive. More people are searching at the same time.

Full-time and Part-time Split

Full-time employment rose by about 50,000 jobs in December, while part-time employment fell by roughly 42,000 jobs. The shift matters for students and entry-level candidates who often rely on part-time hours, and for recent graduates trying to secure a first full-time role.

The Labour Force Survey is Statistics Canada’s monthly snapshot of employment, unemployment and participation, and it is closely watched because small monthly changes can mask bigger shifts in hiring conditions. A near-flat month for job gains can still coincide with a noticeable change in competition if the labour force grows faster.

Why Unemployment and Employment Can Rise Together

Unemployment and employment can rise at the same time when more people enter or re-enter the job market and begin actively seeking work. If job creation does not keep pace, the unemployment rate can rise even without broad-based job cuts.

That dynamic can be especially relevant for people tied to immigration-linked decisions and timelines, including international students weighing part-time prospects, permanent residency applicants assessing how quickly they might land work, temporary residents looking to extend employment, and NRIs considering relocation plans.

How the Unemployment Rate Functions for Newcomers

December’s report also underscored why the unemployment rate often functions as a competition indicator for newcomers. A higher jobless rate can mean more applicants per opening, longer job searches and greater pressure to stand out with local experience.

Statistics Canada framed the increase in the jobless rate in that light, saying it rose “as more people searched for work”. Private-sector economists echoed the point and emphasized participation and labour force growth as key drivers.

Analysts’ Take

TD Economics reported about 81,000 entrants into the labour force in December, lifting the participation rate by 0.3 percentage points to its highest level since July. That kind of increase can raise unemployment even when employment edges up.

RBC and other bank economists described the backdrop as a “low-hiring but also low-fire environment.” The phrasing captures a job market where employers are cautious about new headcount but are not broadly cutting staffing.

Full-year and Age Patterns

Looking beyond one month, Statistics Canada’s year-over-year figures showed full-time employment rose 0.7% (+128,000) over the 12 months to December 2025, while part-time rose 2.6% (+99,000). Those comparisons can provide more signal than a single month, particularly when monthly net change is close to flat.

Age patterns in December added another layer for applicants at the start of their careers. Employment for youth aged 15–24 fell by 27,000 (–1.0%) in December, and RBC noted the youth unemployment rate rose to about 13.2%.

Employment rose by 33,000 (+0.8%) for those aged 55+. Prime-age (25–54) unemployment also edged up but remained lower than the youth rate, RBC said.

Sector Moves

Sector moves in December showed job growth concentrated in areas often linked to population needs and long-running demand. Health care and social assistance added about +21,000 jobs, while construction gained about +11,000, and other services such as personal and repair work rose about +15,000.

At the same time, professional, scientific and technical services shed about –18,000 jobs, and accommodation and food services fell about –12,000. Some weakening in finance, insurance and other business services was also flagged in private-sector analysis.

Those sector splits can shape job-search strategy for newcomers. Hiring tied to health care and essential services can remain steadier when the broader economy slows, while professional and hospitality-facing roles can see fewer openings and more contract or temporary work.

Regional and Provincial Trends

Regional differences were pronounced, reinforcing that Canada’s labour market is not a single story. Quebec’s employment rose +16,000 (+0.3%), its first significant gain since June 2025, though unemployment still rose 0.3 points to 5.4% as more people looked for work.

Ontario’s employment was roughly flat, and its unemployment rate rose 0.6 points to 7.9%, above the national average. Saskatchewan’s employment fell –4,000 (–0.6%), with unemployment up to 6.5%.

For newcomers deciding where to study, land or focus a job search, comparing provinces on both job growth and the unemployment rate can help separate opportunity from competition. A province can add jobs and still see a rising unemployment rate if many new job seekers enter at the same time.

Year-over-year patterns also matter for regional planning. Most provinces recorded higher unemployment over the year even as employment levels were higher than December 2024 in all but Nova Scotia, RBC said.

Commentary from Economists

Economists generally interpreted December as a cooling phase rather than a break. TD Economics said the labour market “gave back some of its gains… with job growth effectively petering out, and the unemployment rate ticking higher as more people started looking for work,” while still aligning with a gradual adjustment.

RBC Economics said the report pointed to “gradual improvement… despite softening in December,” and linked that view to expectations that the Bank of Canada will hold rates rather than cut soon. Other commentary cited slack still present and job gains no longer overheated.

Morningstar/BMO/Desjardins commentary also pointed to moderate job growth, and said unemployment could be “just above 7% briefly in early 2026”, before resuming modest improvement. The phrasing reflects uncertainty around the pace of adjustment as interest rates and demand shape hiring.

What This Means for Job Seekers

For international students, the December picture suggests a need to be deliberate about where part-time work is most attainable and how early to build experience. A drop in youth employment and fewer part-time positions can raise the bar for flexible roles, even if full-time hiring improves.

Students trying to bridge into post-graduation employment may face a market where employers are slower to expand headcount and more selective. Early experience, local references and role-relevant placements can matter more when applicant pools grow.

• Target co-ops, internships and campus work that translate into local experience
• Prioritize programs linked to persistent demand such as health care, skilled trades and construction
• Be prepared to accept interim or bridge roles while pursuing long-term matches

For new immigrants and permanent residency applicants, higher unemployment can translate into longer job searches, especially in sectors showing losses. Candidates may need more time for credential readiness, licensing where required, and targeted applications to employers that match prior experience.

Temporary foreign workers and other temporary residents can face similar competition pressures, particularly when demand is softer in white-collar services or hospitality. A labour market described as low-hiring can be less forgiving for those who need quick transitions between roles.

For NRIs evaluating whether and when to move, the December Labour Force Survey offers a way to calibrate expectations without assuming either a collapse or a boom. Job gains are still present, but the unemployment rate signals a larger number of people competing at the same time.

Practical Planning Tips

1. Build local experience early. Co-ops, internships and campus roles help convert study time into job-ready proof.
2. Choose sectors and locations strategically. Focus on areas with steadier demand like health care and construction when possible.
3. Budget for longer searches. Rising unemployment can mean more months searching and more interviews per offer.

Sector selection can be as important as the national unemployment rate for those planning a move. Areas tied to health care and construction showed gains in December, while professional services and accommodation and food services showed declines, a split that can influence planning for training and job targeting.

Geography can also shape outcomes for job seekers who have flexibility. Ontario’s 7.9% unemployment rate can affect the number of applicants per posting in major hubs, while Quebec’s job gains alongside a 5.4% unemployment rate may look different for certain fields.

Summary

Canada’s December 2025 Labour Force Survey left a clear message for job seekers: modest job growth alongside a higher unemployment rate reflects a larger and more active labour force, not a sudden collapse. The most consistent advantage lies in targeted choices—sector, region and experience—while the market continues its gradual adjustment.