Tale of two provinces: Alberta gains jobs as Ontario loses 67,000 positions

The western provinces of B.C., Alberta, and Saskatchewan continue to buck the trend of the economic malaise the rest of Canada has been feeling in recent months. Today, Statistics Canada released a jobs report showing the country lost 25,000 jobs and 119,000 people left the workforce in the first month of 2026. Canada lost 28,000 workers in the manufacturing industry in January, and Ontario lost 67,000 positions. Ontario took the brunt of the job loss, while Quebec lost nearly 2,000 jobs as well. Meanwhile, Alberta continued to grow and posted an increase in jobs of 7,000. Saskatchewan saw employment rise more than a thousand jobs, too, from 973,100 to 974,300. The other good news was that Canadian full-time positions jumped by 45,000 last month. Statistics Canada and senior fellow at the Macdonald-Laurier Institute Philip Cross told The Hub the national picture masks stark regional disparities. “Clearly Ontario and manufacturing are being hit badly, not unexpected, given what’s happening with the tariff wars,” said Cross. “But then you go West, you look at Alberta and B.C., and their economy is just ripping. You were looking at four percent growth year over year in jobs out in Alberta.” Cross believes Canada isn’t in dire straits yet, but not far off. “It’s the minimum needed to avoid talking about recession,” Cross said. “But it’s certainly nothing to shout from the rooftops about. Year over year, growth is 0.6 percent.” Despite the loss in jobs, the unemployment rate fell to 6.5 percent in January, the lowest level in 16 months.. Economists had expected the jobless rate to hold steady at 6.8 percent. More job losses likely ahead The U.S.-initiated trade war has damaged and disrupted the Canadian economy, including layoffs in industries targeted by tariffs such as autos and steel. Businesses are reluctant to hire new employees because of economic uncertainty, especially with a review of the Canada-United States-Mexico Agreement (CUSMA) on the horizon this summer. The number of labour force participants, those working or actively job searching, dropped by 119,000 in January. An aging and retiring population and a slightly declining population, due to a reduction in the number of temporary residents in the last quarter, likely account for most of the people who left the job market last month. Andrew Hencic, senior economist at Toronto-Dominion Bank, said the decline in the labour force is a trend to watch. “Canada’s population is expected to shrink in 2026, meaning a smaller pool of available workers,” he wrote on Friday. “Under these conditions, the unemployment rate can continue to fall even if Canada is losing jobs.” Ontario manufacturing is likely going to face more drubbing. Stellantis NV, which has factories in Windsor and Brampton, downgraded the company’s value by $26 billion on Friday. Last October, the company announced it was moving its Jeep Compass EV production to Illinois from Brampton. Cross expressed particular concern about Ontario’s prospects. “I would be very concerned about Ontario’s economy,” he said. “Ontario is looking at job losses year over year and rising unemployment again.” Adding to the concern is job openings in Canada fell below half a million for the latter half of last year, below the job vacancies for the previous eight years. The economist noted that Alberta’s natural gas sector has benefited from  persistent cold weather in North America driving up prices. “The natural gas sector is doing really well,” he said. “They’re just not as sensitive to manufacturing, particularly auto exports to the U.S., as Ontario is.” On Friday, Economist Jack Mintz warned in the Financial Post that trade policy uncertainty is taking a toll on investment across the economy. “Recent studies show that investment and GDP fall with trade policy uncertainty even if some firms do go ahead and invest in new technologies or markets.” Cross believes Canada is missing out on a bunch of capital spending by the big four tech companies (Amazon, Alphabet, Microsoft and Meta), while they’ve invested $650 billion in the U.S. “This spending drove nearly half of U.S. growth last year. Yet we hear almost nothing about spending in this area in Canada. Never mind autos, we seem to be missing out on the most dynamic element in the North American economy,” Cross said. Senior economist at CIBC Capital Markets Andrew Grantham called the latest jobs report a “mixed bag” and said it would likely not affect Bank of Canada policy. “We doubt this will have much impact at the Bank of Canada, and it doesn’t change our view that interest rates will be on hold for the remainder of this year.” This article was prepared using NewsBox AI.