Canada's labour market is 'static' after a year of U.S. tariffs, population shift

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The Canadian Press

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Published: April 02, 2026 

Workers inspect sheets of stainless steel after being pressed from coils, at Magna Stainless and Aluminum in Montreal on Thursday, Sept. 18, 2025. THE CANADIAN PRESS/Christopher Katsarov

OTTAWA — Thursday marks one year since U.S. President Donald Trump upended the global trading system with his “Liberation Day” duties — a major step in his wider tariff campaign that’s hammered critical sectors of Canada’s labour market.

With roughly a year of employment data now in hand showing the impact of Trump’s tariffs on Canadian jobs, economists say some of the early resilience to the trade disruption is giving way to a stalled labour market. A shrinking labour pool is also throttling job growth, experts warn.

And there are now risks that weakness could be spilling over from industries hard-hit by tariffs into services and sectors not directly exposed to the new trading order.

“The labour market over the past year has been pretty stable, and maybe even a better word for that is static,” said Brendon Bernard, senior economist at job search platform Indeed.

While the particular Liberation Day tariffs were recently ruled illegal by the U.S. Supreme Court, the impact started even earlier for Canada, with threats in February that materialized into sector-specific tariffs in March that are still in effect.

Statistics Canada’s latest labour force survey for February shows the winners of losers after a year of tariffs.

Manufacturing, a sector targeted directly by steep U.S. tariffs on steel, aluminum and autos, has shed 51,800 jobs over the previous 12 months, leading all industries for losses. The bulk of those lost jobs were in manufacturing-heavy Ontario.

Andrew DiCapua, principal economist at the Canadian Chamber of Commerce, said he is worried the pain isn’t over for the automotive industry.

Work contracts in this sector are often set over six- or 12-month periods, he said. That could mean a further “recalibration” is coming for this part of the labour market as those contracts roll off the books.

Statistics Canada said in March that the industrial capacity utilization rate — how much Canadian industries are collectively producing compared with their potential — was 78.5 per cent in the fourth quarter of last year, down modestly from the previous quarter.

“If companies are not able to produce at these high levels, well, then they don’t need the workers to fulfill orders. So I just fear that the momentum and the weakness may continue,” DiCapua said.

Desjardins senior economist Kari Norman said the impact of tariffs has been steep on an individual and sectoral basis for many Canadian workers, but the hit to the national labour market has so far not been as bad as initially feared.

Norman said the outlook for manufacturing is highly dependent on the upcoming review of the Canada-U.S.-Mexico trade agreement later this year.

If Canada exits that review with a firm commitment and tariff levels similar to where they stand today, Norman said she thinks “we’ll continue to see manufacturing level off, rather than decline in terms of employment.”

StatCan’s labour force survey shows goods-producing sectors have collectively lost 34,200 positions year-over-year as of February, though services industries have more than offset those losses with a gain of 85,900 positions.

Canada’s health-care sector led those gains, adding 92,000 jobs over the past year. Norman said that makes sense as provinces continue to invest in health staffing to care for an aging population.

Strength in the services sector has been one reason Canada’s unemployment rate hasn’t deteriorated sharply over the past year.

But there were signs in February of cracks in that resilience: StatCan reported an 84,000-job loss in the month, led by a contraction in services.

When there’s prolonged weakness on one side of the labour market — say, because of a rapid tariff-driven drop-off in export demand — it can spread to the other side of the economy.

DiCapua gave the example of an auto parts worker in southwest Ontario losing a regular shift, and therefore not getting a Tim Hortons coffee on the way into work. After a while, Tim Hortons might decide it also doesn’t need as many staff to meet dwindling demand and could eventually pull back on advertising too, spurring knock-on effects through the economy.

DiCapua noted that provinces seeing the hardest hits from U.S. duties such as Ontario, Quebec, and British Columbia are also seeing less growth in services.

“I don’t want to draw too many conclusions on that other than to say that there could be just this general ... weaker sentiment (around) U.S. tariffs and it could be affecting sectors that are maybe not directly affected,” he said.

Bernard said it’s “not surprising” that U.S. tariffs combined with a sharply slowing housing market are leading to spillover effects in Ontario’s labour market.

Some economists also view the steep job losses in February with a grain of salt.

While the monthly labour force survey is well-known among economists for its volatility, the less timely survey of employment, payrolls and hours — the SEPH — offers a different perspective of the jobs market.

Bernard said when the labour force survey was reporting a surge of job growth in the fourth quarter of last year, the SEPH was flat. That could suggest a more stable trend than the up-and-down monthly job headlines imply.

But whichever data source Canadians prefer to look at, Bernard said one thing is clear over the past year.

“Job growth by both metrics absolutely slowed down,” he said.

“The main driver of that, though, is what’s going on with population growth and demographics.”

StatCan reported in March that the Canadian population shrank in 2025, the first year on record with an outright decline.

With a growing number of baby boomers hitting retirement age and fewer young workers coming into replace them, Bernard noted that the size of the labour force will likely be flat or even decline in the coming months.

He said that means Canada needs to add fewer jobs to keep the unemployment rate steady. Monthly employment declines would also be more commonplace in the more volatile labour force survey, he argued.

“When the trend is flat ... it’s going to be bouncing around that flat number,” Bernard said.

“Even absent the economy shifting, this is going to happen more.”

Desjardins’ outlook has the unemployment rate for 2026 holding around 6.7 per cent — right in line with February’s figures — before improving next year.

Norman said that status-quo forecast might come with a few pockets of job gains, with projected increases in government spending on defence and construction likely to spur hiring in those fields.

She also suggested that high levels of youth unemployment might come down in the summer jobs season as an energy price spike tied to the Iran war sends jet fuel and airfare costs soaring. That could push more Canadian families to vacation closer to home this year, she said.

“That should help support the tourism sector in Canada and those youth jobs that correspond to that,” she said.

This report by The Canadian Press was first published April 2, 2026.

Craig Lord, The Canadian Press

Energy as War: From Oil Fields to Cobalt Mines

Joseph Grosso

 April 10, 2026

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Photograph Source: US Air Force – Public Domain

The energy analyst known as Doomberg recently remarked on the Decouple podcast that ‘all wars are energy wars.’ From the decisive role energy access plays in combat itself (think oil in World War II), to its infrastructure being an inviting target, and its spillover effects for the global economy, it is hard to argue with that sentiment.

Since the U.S. and Israel began this war with Iran, there has been the Israeli attack on Iran’s piece of the South Pars natural gas field, Iran’s drone attack at the Ras Laffan Industrial City in Qatar- Qatar produces 20 percent of the world’s liquified natural gas (LNG) and the damage at Ras Laffan is expected to reduce production by 17 percent for five years. It was a $50,000 drone that hit the plant (back in 2019, it was another Iranian drone attack that hit the Saudi Aramco facility at Abqaiq, the largest oil processing facility in the world).

Lest the war happening in Europe be forgotten, the same week as the attack on Ras Laffan saw Ukrainian drones hit the Arctic Metagaz, a Russian LNG carrier transiting toward the Suez Canal. About a week ago, Reuters reported that at least 40 percent of Russia’s oil export capacity is at a halt. If the report calculations are correct, the shutdown is the most severe oil supply disruption in the modern history of Russia, the world’s second-largest oil exporter.

With the Strait of Hormuz tied up, the shifts in the price of oil have been daily headlines. The price at the gas pump is certainly one thing, yet much of Asia is dependent on LNG from the Middle East for its energy and the blockade is forcing many countries to consider further ramping up on coal and turning to Russian oil. Coal already accounts for over 40 percent of Asia’s energy. In the Philippines, more than 90 percent of energy imports come from the Middle East. President Ferdinand Marco Jr. recently declared a national emergency and for the first time in almost five years, Russian oil arrived in the country. South Korea, which relies almost totally on imported energy, lifted its 80 percent cap on coal installed capacity.  In Japan, where bus and ferry services across the country have been curtailed, coal could offset up to 70 percent of gas-fired power generation. Taiwan normally gets 30 percent of its LNG from Qatar and, since it has retired many of its coal plants, may suffer worse.

Slowing imports have strained distribution systems, prompting governments to prioritize household supply and restrict commercial use. The New York Times reports that ‘In India and Pakistan, shortage of liquefied petroleum has left millions unable to cook daily meals, forcing the closing of thousands of small businesses and restaurants.’ When analyzing social unrest across developing countries between 2000 and 2020, researchers at the IMF found a clear association between fuel price increases and protests.

As is widely known by now, the Strait of Hormuz is also a critical transit point for fertilizer exports. Several fertilizer plants in Bangladesh and Pakistan have shut down or scaled back production just as the planting season is getting underway. Prices haven’t yet hit the peak of the aftermath of the Russian invasion of Ukraine, but if the blockage goes on, nothing is out of the question. As for the oil market, Saudi Arabia has been shipping about 5 million barrels of oil a day from the Red Sea port of Yanbu, bypassing Hormuz. With the Houthis claiming they are now in the war, there is concern that the Red Sea will become another front- or the Iranians themselves could attack the port or the East-West pipeline that supplies it.

On one hand, fossil fuel companies can enjoy the inflated prices; but on the other hand, if prices stay high long enough it could lead to a loss of demand. It was getting shut out of the LNG market after Russia invaded Ukraine (along with many years of endemic blackouts) that made people in Pakistan interested in solar panels. In 2021, solar power provided only 4 percent of Pakistan’s electricity; by 2025, it was 25 percent.

Many an environmentalist, including David Wallace-Wells in the New York Times, has quipped, “Nobody ever started a war over solar panels.” It is a nice thought but actually, it’s not at all difficult to imagine solar panels being targets in future conflicts. In the midst of al of the above, it is certainly understandable for anyone to have missed a small story in the Wall Street Journal on March 9^th with the title ‘Cobalt Plant Sickened Congo Town.’ The story describes how health workers near CMOC Group’s plant, a Chinese-owned cobalt processing plant that produced 41 percent of the world’s supply in 2024, saw a surge of local townspeople coughing up blood, suffering recurring nosebleeds, and experiencing coughs and chest pain- symptoms toxicology experts associate with sulfur dioxide exposure. The company, of course, denies the evidence. Most of its cobalt, which is extracted during copper mining in two large mines in Congo’s copper belt (Kisanfu and Tenke Fungurume), goes to China and Europe for EV batteries, but lithium-ion batteries (cobalt is often included in their cathodes) are also a premier choice for solar storage.

The awful reality of cobalt mining in Congo has received attention (see Nicolas Niarchos’ informative new book Elements of Power or Siddharth Kara’s Cobalt Red: How the Blood of the Congo Powers Our Lives), but the geopolitics can’t be overlooked either. We have already seen China flex its muscles with rare earth metals a couple of times. With much of the material needed for the energy transition controlled by Chinese entities, in both mining and, especially, refining, the U.S. is desperately trying to break the stranglehold.

The Brazilian government is hesitating to sign a mineral agreement with the U.S. over issues of where processing will be done and Brazil’s trade relations with China. Brazil has the world’s second-largest rare earth reserves. This past December, a deal brokered by the Trump Administration between the DRC and Rwanda gave privileged access to U.S. mining companies. On March 31^st, the Wall Street Journal reported that U.S.-based Virtus Minerals finalized a purchase of the assets of Congolese company Chemaf, which accounts for about 5 percent of global cobalt production. The U.S. also invested $553 million in the Lobito Corridor, a railway from Congo’s copper belt to Angola’s Atlantic coast for faster shipping to the U.S. In February, Orion CMC, a consortium that includes the U.S. government, signed a memorandum to take a 40 percent stake in Glencore’s DMC assets (Glencore is one of the world’s largest mining companies).

Mining can’t be turned on and off like a light switch. In fact, the lag between discovery and an operational mine has gotten longer, now averaging about 12.4 years across a wide range of sectors. Hence, when was the last time anyone heard of that rare earth deal with Ukraine or conquering Greenland? However, the firm Benchmark Mineral Intelligence estimates that between 336 and 384 new mines for minerals like lithium, cobalt, nickel, and graphite will be needed to meet demand by 2035. Is it really out of the question that all this scrambling could spill over into actual combat?

The point is this energy transition, if ‘transition’ is even the correct description, has many of the same features as previous ones. As activists push for greener energy, other standard fights aren’t going away. Workers’ rights need to be demanded and fought for throughout supply chains. The rights of local communities to both benefit from and resist resource extraction are vital. Public funding for scaling up battery recycling efforts and developing less resource-intensive materials will only get more important.

As another war rages in the Middle East, with a U.S. president blathering on about ‘taking oil’, such battles are more relevant than ever.

Joseph Grosso is a librarian and writer in New York City. He is the author of Emerald City: How Capital Transformed New York (Zer0 Books).