Canada Labour Force Survey (LFS) — February 2026 & Labour Market Outlook

# Canada Labour Force Survey (LFS) — February 2026 & Labour Market Outlook

Executive Summary

Canada's labour market showed clear signs of softening in February 2026, with employment falling by 84,000 (-0.4%) and the unemployment rate rising 0.2 percentage points to 6.7%. Both the services sector (-56,000) and manufacturing (-28,000) posted declines, with particularly sharp drops among youth workers (-47,000) and core-age males (-41,000). Structural headwinds — stalling population growth and an ageing workforce — are compressing the labour force itself, pushing the breakeven employment rate to approximately -10,000 jobs per month for 2026.

Details

February 2026 LFS: Key Results

Statistics Canada released the February Labour Force Survey on March 13, 2026 ([StatCan LFS February 2026](https://www150.statcan.gc.ca/n1/daily-quotidien/260313/dq260313a-eng.htm)):

Overall Employment Change:

Total employment: -84,000 (-0.4%)

Unemployment rate: 6.7% (month-over-month +0.2 pp)

Services sector: -56,000 (-0.3%)

Manufacturing: -28,000 (-0.7%)

Sector Breakdown: | Sector | Change | Rate | |--------|--------|------| | Wholesale & Retail Trade | -18,000 | -0.6% | | Other Services (Personal & Repair) | -14,000 | -1.8% | | Information, Culture & Recreation | -12,000 | -1.4% | | Transportation & Warehousing | +10,300 | Increase | | Public Administration | +8,100 | Increase |

By Age Group:

Youth (15–24): -47,000 (-1.7%)

Core-age males (25–54): -41,000 (-0.6%)

By Region:

Quebec: -57,000 (-1.2%)

British Columbia: -20,000 (-0.7%)

Saskatchewan: -5,500 (-0.9%)

Manitoba: -4,000 (-0.5%)

Newfoundland and Labrador: +2,100 (+0.8%)

Structural Shifts in the Labour Market

According to RBC Economics ([RBC Labour Market](https://www.rbc.com/en/economics/canadian-analysis/featured-analysis/insights/canadas-shifting-labour-market-recalibrating-breakeven-employment/)):

Stalling population growth combined with an ageing demographic is driving a gradual decline in labour force participation

Breakeven employment growth: estimated at approximately -10,000 per month for 2026

This means even modest job losses are consistent with a declining unemployment rate

Unemployment Rate Outlook

H1 2026: Expected to fluctuate near current levels (~6.7%)

By end of 2027: Projected to decline gradually to 6.2%

A moderate recovery in GDP growth is expected to support employment stabilization

January 2026 LFS

The January Labour Force Survey ([StatCan LFS January 2026](https://www150.statcan.gc.ca/n1/daily-quotidien/260206/dq260206a-eng.htm)) showed relatively stable employment, with continued wage growth and a recovery in year-end hiring activity.

Indeed: 2026 Canadian Hiring Trends

Indeed Hiring Lab's 2026 Canadian Jobs & Hiring Trends Report ([Indeed Report](https://www.hiringlab.org/en-ca/2025/12/18/indeed-2026-canadian-jobs-hiring-trends-report/)) highlights the coexistence of established themes and emerging trends shaping the hiring landscape.

Key Figures

February employment change: -84,000 (-0.4%)

February unemployment rate: 6.7% (+0.2 pp)

Services sector job losses: -56,000

Manufacturing job losses: -28,000

Youth (15–24) job losses: -47,000 (-1.7%)

Core-age male (25–54) job losses: -41,000

Quebec job losses: -57,000 (-1.2%)

Breakeven employment growth (2026): -10,000/month

Unemployment rate forecast (end-2027): 6.2%

Wholesale & retail trade losses: -18,000

Rise Partners Implications

The sharp decline of 84,000 jobs in February reflects structural deterioration in Canada's labour market. Weakness in wholesale & retail trade (-18,000) and manufacturing (-28,000) in particular warrants caution for Korean companies considering market entry or investment in Canada's consumer goods and manufacturing sectors.

However, the negative breakeven employment rate (-10,000/month) — driven by demographic contraction — means the unemployment rate can stabilize even amid modest job losses. This signals that labour shortages remain a persistent reality, making skilled talent acquisition a critical operational challenge for companies entering the Canadian market.

The sharp regional divergence — Quebec posting a steep decline (-57,000) while areas such as Newfoundland and Labrador saw gains — underscores the importance of region-specific labour market analysis. For Rise Partners clients planning Canadian market entry, the choice of region will be a consequential strategic decision.

--- Source: https://www150.statcan.gc.ca/n1/daily-quotidien/260313/dq260313a-eng.htm