- Sonny Scarfone
Principal Economist
Economic News
Quebec: Limited Job Creation Is Enough to Keep the Labour Market in Balance
August 7, 2026
Highlights
- Employment increased by 700 jobs in Quebec in July, marking a third consecutive monthly gain. Despite this improvement, net job losses since the start of 2026 remain elevated at 58,800 (table).
- The unemployment rate rose 0.2 percentage points to 5.6% in July (graph 1), the second-lowest rate among the provinces after Manitoba (5.0%) and below the Canadian average (6.4%). The increase was partly driven by a rebound in the participation rate to 64.4%, although it remains below its level of a year ago.
- Full-time employment jumped by 29,300 in July, recovering half of the losses recorded since January (‑29,300). This gain was offset by a decline of 28,600 part-time positions. Job losses in the public (‑4,400) and private (‑9,600) sectors were more than offset by an increase in self-employment (+14,700).
- By industry, construction (‑16,500) posted the largest decline in July. Since the beginning of the year, employment losses have remained concentrated in construction (‑29,300) and manufacturing (‑22,300).
- Regionally, the unemployment rate reached a low of 1.5% in Chaudière-Appalaches and remained below 4% in several regions, including Saguenay–Lac‑Saint‑Jean (2.9%), Abitibi‑Témiscamingue (2.9%), Estrie (3.3%), Lanaudière (3.4%), and Centre‑du‑Québec (3.5%). By contrast, Montréal posted the highest unemployment rate, at 8.0%.
Comments
Quebec’s labour market is showing signs of stabilization after a difficult start to the year. The increase in the unemployment rate in July largely reflected a rebound in the participation rate following the spring trough, a positive signal.
The main bright spot in the report was the rebound in full-time employment. Weakness since the start of 2026 has been relatively evenly distributed across the public sector, private sector, and self-employment. By industry, cumulative losses remain concentrated in goods-producing sectors (‑56,900), while service-sector employment has remained slightly positive. Professional, scientific and technical services (+27,700) as well as accommodation and food services (+19,500) have performed well since the beginning of the year, with the latter benefiting from strong domestic tourism External link. and Quebec’s continued appeal to international visitors.
Other labour market indicators remain mixed. Hours worked were down 0.3% from a year earlier in July, although this was one of the best readings of the past year. Meanwhile, average hourly wage growth slowed to 3.4%, a pace more closely aligned with inflation (graph 2).
Implications
The decline in Quebec’s working-age population (‑0.9% year over year in July) is constraining the province’s employment growth potential (graph 3). As a result, only modest job creation is now required to keep the labour market in balance. The downside is that economic growth prospects remain limited, absent a significant acceleration in productivity growth.
