Canada lost 40,800 jobs in July, the largest monthly decline since January 2022. The unemployment rate held steady at 6.9%, suggesting that while the labour market is softening, it has not yet tipped into a full-scale contraction (reuters.com).
This decline appears to be more of a market cooling following June’s strong gains. As one market analyst put it, “what we have here is a bit of a correction in the data,” reflecting uneven performance across industries and regions (reuters.com).
Where Jobs Were Lost and Gained
| Sector | Jobs Lost or Gained |
| Information, Culture & Recreation | –29,000 jobs |
| Construction | –22,000 jobs |
| Business Support Services | –19,000 jobs |
| Transportation & Warehousing | +26,000 jobs |
The sharpest losses were in creative industries, construction, and business support services. Construction, which had posted gains in previous years, also experienced declines in July. Transportation and warehousing stood out as a growth area, supported by continued demand for logistics and supply chain roles (reuters.com).
Canada has not yet seen widespread layoffs, but many businesses are responding to economic pressures by limiting hiring. This more cautious approach means job seekers without the experience or in-demand skill sets required in today’s tighter labour market continue to face challenges in securing employment.
One group feeling this impact most acutely is young Canadians.
Youth Employment Takes the Hardest Hit
Once again young Canadians (ages 15–24) were disproportionately affected:
- Unemployment rate: 14.6%, the highest since September 2010 outside of pandemic years
- Employment rate: 53.6%, the lowest since 1998 outside of pandemic years (www150.statcan.gc.ca)
This is an opportunity for organizations to strengthen early-career pipelines. By investing in internships, co-op programs, apprenticeships, and structured onboarding, employers can access motivated talent, address immediate staffing needs, and build long-term workforce capacity while supporting an underutilized segment of the labour market.
Wages Hold Steady Despite Employment Losses
Average hourly wages for permanent employees rose 3.5% year-over-year to $37.66/hour (reuters.com). Rising wages in a slower hiring environment indicate that employers are prioritizing retention of experienced staff even as they scale back new hiring.
What This Means for Canadian Employers
In a more cautious hiring climate, workforce decisions need to be deliberate, data-driven, and tied directly to business priorities. Based on the July results, Agilus recommends:
- Prioritize Critical Roles
Focus hiring on positions that are essential to operations, revenue, or strategic growth. For emerging or uncertain needs, consider temporary, contract, or project-based roles to maintain flexibility. - Leverage and Develop Internal Talent
Redeploying employees into high-demand areas preserves institutional knowledge and reduces recruiting costs. Pair this with targeted upskilling to fill technical or leadership gaps internally. - Rebuild Early-Career Pathways
Youth employment losses point to an opportunity to strengthen entry-level pipelines through internships, co-op programs, apprenticeships, and mentoring. A well-structured onboarding process can accelerate productivity in these roles. - Concentrate on Growth Sectors
Transportation and warehousing are still expanding. Redirect recruitment resources toward sectors with sustained demand to maximize hiring success rates. - Invest in Retention Beyond Pay
Wage growth alone will not secure loyalty. Provide clear career progression, flexible work arrangements, recognition programs, and opportunities for continuous learning to keep top performers engaged.
Agilus Perspective
At Agilus, we are seeing employers succeed when they take a balanced approach: protecting core business capacity while staying ready to move when conditions improve. In the current environment, that means:
- Acting with intent: Each hire should have a clear purpose tied to business outcomes.
- Maintaining agility: Building a workforce strategy that can expand or contract without destabilizing operations.
- Nurturing relationships: Keeping high-value candidates and former employees engaged, even if immediate hiring is paused.
- Aligning talent strategy with market data: Using real-time labour market insights to inform decisions and avoid reactive moves.
- Attracting multi-potentials: Seeking candidates with diverse skill sets and a commitment to lifelong learning, who can adapt to a variety of roles. Prioritize those with the ability to do the work effectively over those whose experience matches the title exactly or have had a traditional career path.
“Employers who remain agile and make deliberate talent decisions will navigate today’s market with greater stability and be well-positioned to capitalize when conditions improve,” says Craig Brown, CEO of Agilus Work Solutions.
Looking Ahead
July’s numbers confirm that the labour market is slowing, but they also show areas of opportunity for employers prepared to adjust. Agilus partners with Canadian businesses to design flexible, strategic workforce plans across Engineering, Technology, Professional Services, Administrative, Light Industrial, Life Sciences and Federal Government& Public Sector.
Contact us to plan your next workforce move →