It was a tough month for the Canadian labour market in February, with employment falling for the second straight month.

The national employment loss of 84,000 in February disappointed consensus expectations for a 10,000 gain, led by declines in Quebec and British Columbia.

Not much of a silver lining could be found in the details either, with job losses concentrated in the private sector and in full-time work.

Population growth is cooling, which by itself, should put some downward pressure on unemployment as fewer search for work. But the economy is still not creating enough jobs to absorb the job seekers. The unemployment rate increased 0.2 points to 6.7%.

Alberta held steady last month (employment effectively flat at -1.8K), following a 20.3K bump in January.

The details were weaker, with part-time jobs offsetting a drop in full-time. However, the reverse held true in January with job gains driven by full-time positions. On net, it’s full-time jobs leading the charge since the start of the year. 

Progress continues to be made on the unemployment rate, as the labour force levels off. Alberta’s unemployment rate fell 0.1 ticks to 6.3% - the lowest since February 2024 and below the national rate.

Looking at longer-term trends, Alberta has pulled ahead of other provinces. It leads in year-over-year employment growth at 3.3%, compared to slight declines in other large provinces (see chart). Excluding Alberta, national employment is down slightly (-0.2%) over the past year. A notable pickup has been observed in Edmonton, a city that was lagging for much of 2025 (see key stats).

Forecast implications for Alberta

We were expecting Alberta’s labour market to rebalance this year. That is indeed happening, as the combination of solid job growth and slower population growth is chipping away at the unemployment rate. However, that rebalancing is happening faster than we expected.

Overall, it’s clear that Alberta’s economy is weathering the trade war storm better than most, aided by a lower effective U.S. tariff rate (the lowest in Canada by our estimate), a resilient resource sector, sturdy home construction and interprovincial inflows. 

We have been looking for a rotation into goods-producing industries (manufacturing, construction, oil and gas), which tends to anchor gains elsewhere. Goods-producing employment is still below its peak in May 2025, but has staged an impressive rally since September. Higher oil prices stemming from the war in Iran will support oil and gas activity, though we expect a muted investment response due to more structural issues (namely pipeline constraints).

Overall, it’s been a stronger-than-expected start to the year on the Alberta jobs front. This, along with higher oil prices, will be another variable to consider as we finalize our March forecast later this month.

As for the Bank of Canada, we see the jobs report reinforcing our call for the policy rate to be on hold next week. The labour market is disappointing, but higher oil (and likely food) prices will add to inflation. Overall, we expect the Bank to remain on hold through 2026 as it takes a ‘wait and see’ approach to the ongoing war in the Middle East and continued trade tensions.

Key Statistics

Canada

• Unemployment Rate: Rose to 6.7% (up from 6.5% in January).
• Employment Change: -84,000 positions (-0.4%).
• Annual Growth: 0.2% year-over-year employment growth.

Alberta

• Employment Change: Virtually unchanged (held steady after January’s +20,300 gain).
• Unemployment Rate: 6.3% (down from 6.4% in January).
• Annual Growth: Leads all provinces with 3.3% year-over-year employment growth.

Calgary (3-month moving average)

• Unemployment Rate: 6.6% (a slight decrease from 6.7% in January).
• Trend: Strong start to the year, with employment up 18.9K since January. This is helping keep the unemployment rate contained despite continued population growth.

Edmonton (3-month moving average)

• Unemployment Rate: 6.8% (unchanged from January).
• Trend: Edmonton has shown a major recovery from the volatility of 2025 (where unemployment peaked at 8.6% in September), with employment surging in late 2025 and continuing into 2026. Employment is up 5% year–over-year. 

The trivia section will be in The Seven coming out later today.