Canada’s labour market has warmed up just in time for summer.

Employment advanced by 18K building on an 88K gain in May. This follows a winter freeze in the job market when employment dipped in three of the first four months.

Last month’s employment gain came entirely from self-employment and private sector work,  and was heavily concentrated in part-time jobs. The World Cup may have provided an assist, as job growth was heavily concentrated in accommodation and food services (+14.7K).

One positive development was an uptick in youth employment. Statistics Canada points to a better job market for youth this summer. While youth unemployment remains elevated at 12.7%, it’s down from June 2025 when it was 14.2%.

Taking a giant step back, let’s call the first half of the year wobbly and uneven for the Canadian labour market. Even with gains in the last two months, Canadian employment still sits slightly (-6.3K) below December 2025 levels.

Still, the latest monthly GDP readings and now stronger jobs data point to an economy coming back to life in Q2 following a mild contraction in the previous two quarters.  

A key development in Canada’s labour market is that population growth has slowed to a crawl (it’s officially declining, but the Labour Force Survey still shows slight increases in the 15+ population). This means that the “break-even” job growth to keep unemployment flat has fallen. Put another way, not as many jobs needed to be added each month to keep pace with a smaller pool of folks looking for work. This shows up in the unemployment rate, which fell again to 6.5% last month—that’s lower than the 6.8% rate we ended 2025 with despite slightly fewer jobs over that period.  

Turning to Alberta, employment keeps on trending higher, though the pace slowed last month.  

Employment rose slightly by 6.8K following 13.9K in May. The June gain was driven by part-time work and in the service sector (led by retail/wholesale trade).

We’ve been expecting job growth to slow, as the province missed the winter labour freeze and kept churning out jobs earlier in the year. Over the last 12 months, employment is up 3% (or 78.5K), the second largest percentage gain among provinces after PEI and outpacing the national gain of 0.5%. Removing Alberta from the national tally, employment is effectively flat year-over-year in the rest of Canada (+0.1%). And taking a much longer view, employment growth has been persistently stronger in Alberta (see chart).

The unemployment rate is a different story. The challenge in Alberta has been creating enough jobs for the people looking. Alberta’s nation-leading population growth has contributed to stronger economic growth, but it also means that the “break-even” job creation rate is higher in the province. Despite last month’s job gain, the unemployment rate rose to 7% (up from 6.6% in May) as 20K people were added to the labour force—the combination of population growth and a higher participation rate. We see the unemployment rate moving lower in the coming months due to a marked slowdown in population growth.

The labour market for youth remains challenging, with unemployment at 15.8% last month. That’s down from the 20% peak in July 2025, but well above historical norms. We’ve seen strong population growth and labour force entry for this age cohort, creating competition for jobs. Last month, the youth unemployment rate rose by 0.8 percentage points despite a solid 6.7K increase in employment.

Interestingly, and somewhat perplexingly, employment in the “forestry, fishing, mining, quarrying, oil and gas” category fell again in June. That category is almost entirely oil and gas jobs in Alberta, and sits 4.6% below June 2025 levels. It’s perplexing in the sense that rig activity has jumped over the last 12 months amid higher energy prices. While the industry remains cautious on capital spending, we’d expect to see these higher drilling numbers translate into higher employment eventually. Keep a close eye on this, as there is upside here (especially if new pipelines proceed).  We recently showed that “this time is different” for the labour market, with job gains coming from outside the oil and gas industry during the latest expansion.

All told, it’s been a strong first half for job growth in Alberta. For 2026, we are expecting 3.3% employment growth and an average unemployment rate of 6.6%.

This report shouldn’t push the Bank of Canada off the sidelines. It largely reinforces the story that the economy is crawling back after a weak start to the year. We expect the Bank to hold next week and for the remainder of the year.  

By the numbers (all figures seasonally adjusted)

Canada

• Monthly employment change: +18.2K
• Year-over-year growth: 0.5%
• Unemployment rate: 6.5%

Alberta

• Monthly employment change: +6.8K
• Year-over-year growth: 3.0%
• Unemployment rate: 7.0%

Calgary CMA (3-month moving average)

• Monthly employment change: -1.0K
• Year-over-year growth: 5.9%
• Unemployment rate: 7.1%

Edmonton CMA (3-month moving average)

• Monthly employment change: +0.8K
• Year-over-year growth: 4.3%
• Unemployment rate: 7.2%

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