Article content Canada’s labour market softened in April, but the details point to slower hiring rather than an acceleration in layoffs. Employment fell by 18,000, extending the choppy pattern seen throughout 2026, while the unemployment rate rose to 6.9 percent from 6.7 percent in March. Recommended Videos Full-time positions drove the weakness, though hours worked were little changed, suggesting the economy has not yet shown signs of a broad pullback in labor demand.
The increase in unemployment also reflected more people starting (or restarting) job searches, with participation ticking higher. This backdrop has been particularly challenging for youth — 15 to 24 years old — whose unemployment rate reached 14.3 percent, well above its pre-pandemic average of 10.8 percent. Wage growth, at 4.5 percent year over year, remains firm and supportive of household incomes, though it eased from 4.7 percent in March.
Economists agree the recent job losses are less alarming than headlines suggest. Layoffs remain contained, with permanent layoffs down nearly 10 percent since October 2025. At the same time, economists polled expect resilient domestic demand and slower labor supply growth to support a gradual improvement in labor conditions later this year.
Canadian consumer insolvencies rose to their highest level since 2009 in Q1, underscoring the strain that higher living costs, housing expenses, and softer labour market conditions are placing on households. Data from the Office of the Superintendent of Bankruptcy showed 37,121 filings in Q1, up 8.5 percent year over year. Regionally, British Columbia recorded the largest percentage increase at 16.2 percent, while Ontario saw the highest number of filings overall, likely in part reflecting the province’s greater exposure to manufacturing-related stress.
Consumer proposals (which allow borrowers to settle debts under revised terms) remain more common than bankruptcies, but the rising numbers of filings by homeowners and dual-income households suggest financial strain is broadening beyond the most vulnerable borrowers. Key pressure points include housing, auto loans, and food. Mortgage costs are more sensitive to changing interest rates given Canadian mortgage renewal dynamics, while grocery prices remain well above pre-pandemic levels and may be compounded by elevated fuel costs.
While insolvency is a lagging indicator, elevated debt levels, longer auto loan terms, and employment uncertainty could keep filings elevated, making the trend an important signal of consumer stress to monitor over the coming quarters. We will see what’s in store for the CUSMA renegotiations later this summer and how it affects Canada’s economic numbers later in the year! • • • Mike Candeloro is a Senior Portfolio Manager and Wealth Advisor with RBC Dominion Securities and the head of The Mike Candeloro Wealth Management Group supplied this article.
RBC Dominion Securities Inc. and Royal Bank of Canada are separate corporate entities, which are affiliated. A member CIPF, Mike can be reached at Michael.candeloro@rbc.com.
You can also visit his website at www.michaelcandeloro.com. To read Mike’s archived articles please visit Mike Candeloro/Special to The Nugget|North Bay Nugget
