Earlier in my career, I was told that I should be able to explain the current state of the economy in one elevator ride - the so-called “elevator pitch”. On hearing this advice, my first thought was “how many floors are we travelling?”.

I’ll need a longer elevator ride for today’s topic on Canada’s labour market given some pretty significant variations across regions, industries and age groups. 

That’s better - middle innings comeback

Let’s start with the headline from last Friday. Canada’s labour market has improved over the last three months, with 75K jobs added in July and the unemployment rate hitting a two-year low of 6.4%. 

This comes after a tough start, with jobs down in three of the first four months of the year.  Overall, Canada has skirted an actual recession, and is on track for a decent GDP bounce-back in Q2 north of 3%. True, we’re not out of the trade war woods, but this is encouraging news.

It’s regional - Alberta leads in jobs (and job seekers) this year

Moving beyond the headlines and the volatile monthly data, there are some clear regional patterns that emerge. 

Job growth in 2026 has been highly concentrated in Alberta (just over 80% of Canadian employment gains year-to-date ). This is not a story of job growth accelerating in Alberta - rather, it’s from Alberta maintaining momentum in early 2026 when almost everyone else was slowing. Jobs did retract slightly in Alberta in July, but that’s after a steady string of gains in previous months.

As we’ve previously shown, one thing that’s different about Alberta’s job growth this time around is that it’s not coming from oil and gas. This may surprise you, given that Alberta’s energy sector is benefiting from tariff-exemptions, new market access and now higher prices. In fact, employment in oil and gas is down this year despite oil production reaching new heights and rig activity trending well above year-ago levels.

We chalk this up to ongoing efforts to reduce costs, optimize existing facilities and maintain capital discipline. At some point, however, employment will turn higher if producers enter a new growth phase fuelled by pipeline access. 

There’s another twist to Alberta’s labour market. Normally such outsized employment growth would put a dent in the unemployment rate. That hasn’t been the case, as job growth has been matched by similar gains in the labour force. As a result, Alberta’s unemployment rate remains above the national average at 7%. In short, there are more jobs in Alberta, but also more job seekers as people continue to flock to the province.

Elsewhere in the country, job growth has been more tepid, with year-to-date losses in Quebec and B.C. offset by gains in Ontario, Manitoba, Saskatchewan and the Atlantic provinces. 

To further reinforce the ‘it’s regional’ story, take a look at Quebec’s labour market this year: unemployment is down slightly despite job losses. That’s because the labour force has shrunk - that is, fewer jobs, but also fewer job seekers.

Tariff-exposed manufacturing is lagging

At the industry level, manufacturing is the clear employment laggard in Canada. 

Perhaps this isn’t surprising given that manufacturing is most impacted by tariff pressures and ongoing trade uncertainty. 

More detailed GDP data shows that primary metals and lumber production - two heavily tariffed industries - have seen particularly large output declines. 

Work to do - the youth labour market

The unemployment rate has fallen across major age groups in recent months, including among youth. But youth unemployment remains stubbornly high at 12.6% in July - significantly higher than the pre-pandemic (2017-2019) period. That holds true in Alberta (youth unemployment rate of 15%) as job gains have failed to keep pace with a fast-growing youth population.

An elevator pitch

Back to the elevator. Say you’re travelling 20 floors. Here’s what you could say if someone asks you about the labour market (post coffee consumption assumed):

Canada’s labour market has improved recently, but there is massive variation across regions and industries. Job growth this year has been highly concentrated in Alberta. But Alberta is also attracting more job seekers, so the unemployment rate remains elevated there. Employment in the tariff exposed manufacturing sector is suffering the most. Youth face a particularly challenging labour market, but thankfully we’re seeing some early signs of improvement. 

Overall, Canada’s labour market has been more resilient than expected to tariff pressures, but we’re not out of the woods. Watch next week if the Trump administration decides to implement a new round of tariffs - those will likely hit BC, Ontario and Quebec the hardest.

Have a good day!

Answer to the previous trivia question: Edmonton’s River Valley is 22 times the size of New York’s Central Park.

Today’s trivia question: Which Canadian province had the highest unemployment rate last year?