President Donald Trump has repeatedly stated that Canada has an issue with its unemployment rate as he criticizes America’s northern neighbor amid the ongoing trade war. Revisiting the claims last week, Trump insisted Canadian Prime Minister Mark Carney’s government was “destroying” Canada with its immigration policies that he said were “causing problems.” It’s “already showing up in their numbers,” he said on Sept. 23. Their businesses are fleeing for the U.S., and it’s all because of their failed policies, and inept leadership,” he falsely argued.
Trump’s focus on Canada’s unemployment figures comes amid a prolonged trade standoff between his Administration and Carney’s government. Canada’s retaliatory tariffs on U.S. goods took effect earlier this month, with Carney matching the economic pressure imposed by the U.S. Trump, who has repeatedly threatened to annex Canada, stoked tensions by signing an Executive Order renaming Lake Ontario as “Lake America.” The U.S. import bans on certain Canadian products, largely centered on alcohol and dairy, are due to take effect Tuesday.
Carney, meanwhile, is focusing on strengthening international alliances, including pursuing efforts for Canada to become the E.U.’s first “associate member,” in a bid to reduce the country’s economic reliance on the U.S. As Trump targets Canada’s unemployment rate, here’s what the data says about how the Canadian economy is currently faring. Canada’s economy lost 42,000 jobs in August, a decrease of 0.2%, according to the country’s Labor Force Survey released on Sept. 4.
The figure came in well below reported consensus expectations for a 15k gain. The losses were concentrated in areas such as business, building, other support services, natural resources, and utilities. The number of public sector employees fell by 20,000 (0.4%), down for the third consecutive month.
Joseph Steinberg, a professor of economics at the University of Toronto, says several factors could be contributing to the job losses, including Canada’s slowing population growth. Data from Statistics Canada shows the population of Canada reached an estimated 41,798,407 people on July 1, 2026, an increase of 189,425 people from July 1, 2025. This marked the “lowest annual July-to-July (or June to June before 1946) growth in the total size of the population since 1944/1945.” Despite the job losses, Canada’s unemployment rate in August remained steady at 6.4%, following three consecutive monthly declines from May through July.
The unemployment rate is lower in comparison to August 2025, when it stood at 7.1%. Meanwhile, the employment rate in Canada—the proportion of the population aged 15 and older who are employed—decreased slightly, from 60.9% to 60.8%. Canada “does not currently have an unemployment problem,” says Steinberg, reflecting on the data.
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