- Sonny Scarfone
Principal Economist
Economic News
Quebec: Labour Market Stabilizes After a Difficult Start to the Year
July 10, 2026
Highlights
- In June, employment in Quebec increased by 14,300 positions, reducing the net job loss recorded since the beginning of 2026 to 59,500 (table).
- The unemployment rate fell by 0.2 percentage point in June to 5.4% (graph 1), tying Manitoba for the lowest rate among the provinces (Canada: 6.5%). Meanwhile, the participation rate was little changed at 64.2%, remaining at a historically low level.
- Full-time employment was essentially unchanged in June (-300), but remained down by 58,600 positions since the beginning of the year. In contrast, part-time employment rebounded by 14,700 positions, nearly offsetting the cumulative losses recorded over the first five months of 2026 (-800). Job gains in June were concentrated in the private sector.
- Since the beginning of the year, job losses have been concentrated in manufacturing (-26,700), finance and insurance (-26,600), and educational services (-27,100). In contrast, professional, scientific and technical services (+28,300) and accommodation and food services (+24,000) have posted solid gains.
- For a second consecutive month, net job creation was concentrated in the Montreal census metropolitan area, where employment increased by 23,600 positions in June, fully offsetting the losses recorded during the winter months. Elsewhere in Quebec, the unemployment rate declined year over year in two-thirds of the administrative regions, although somewhat larger increases were observed in the Laurentides and Mauricie regions (graph 2).
Comments
Quebec’s labour market, which deteriorated between February and April, now appears to be stabilizing. The unemployment rate has fallen back to 5.4%, below its June 2025 level of 6.2%, back when the effects of the trade war initiated by the US administration began to show up in Canadian economic indicators. While weakness remains particularly pronounced in manufacturing, the slowdown has become more widespread, extending to wholesale and retail trade, financial services and parts of the public sector.
In the near term, even modest job creation would still represent a relatively favourable outcome. Quebec’s working-age population is down 0.7% from a year ago, an unprecedented decline since comparable data began more than 50 years ago (graph 3). Against this backdrop, the persistent weakness in full-time employment is not surprising, as an aging population gradually transitions toward retirement and increasingly favours part-time work. This trend is also reflected in other Statistics Canada indicators, including the absence of any increase in the share of involuntary part-time workers.
Moreover, hours worked remained 2.1% below their June 2025 level, limiting the province’s economic growth potential. This downward trend in hours worked has in fact been in place for several months. Despite inflation reaching 3.6% last month External link., workers’ purchasing power continued to improve as average hourly wages rose 4.7% year over year (compared with 3.3% for Canada as a whole). Labour shortages in certain industries and regions are likely helping to sustain this wage growth. For example, the unemployment rate has fallen below 2% in the Chaudière‑Appalaches region.
Implications
Quebec’s economy continues to show signs of fatigue, as highlighted by the latest gross domestic product report External link.. Beyond the inherent volatility of monthly data, the underlying trend remains one of modest growth in 2026 External link.. With the working-age population shrinking and hours worked declining, labour supply constraints will continue to limit the province’s growth potential.