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Economic News

Quebec: Strike Two for the Labour Market in 2026

May 8, 2026
Sonny Scarfone
Principal Economist

Highlights

  • In April, employment fell by 43,300 positions in Quebec, bringing the cumulative loss to 87,000 jobs over the first four months of the year (table 1).
  • The unemployment rate jumped by 0.8 percentage points to 6.2% (graph 1). This remains the third-lowest rate in Canada (6.9%), behind Manitoba (5.0%) and Saskatchewan (5.6%). However, the gap with Ontario narrowed, as its unemployment rate edged down by 0.1 percentage point to 7.5%.
  • A breakdown of the components points to broad-based weakness. Full-time employment declined for a fourth consecutive month, bringing losses to more than 110,000 positions since the start of 2026. The private sector also recorded sizable losses, with employment down by more than 50,000 positions year to date (graph 2).
  • Of the 87,000 net jobs lost so far in 2026, nearly half were concentrated in construction and manufacturing, while roughly one quarter was attributable to financial services (‑23,300).
  • Employment has been especially weak in the Montreal census metropolitan area, with a loss of 56,000 jobs since January. At 7.7%, the unemployment rate has reached its highest level in nearly ten years (July 2016), excluding the pandemic period.

Comments

Canada’s labour market surveys had been telling different stories for some time, with the Labour Force Survey (LFS) painting a more favourable picture for 2025. Recent data in Quebec, however, suggest that the business survey was closer to reality. The LFS again posted a very weak result this morning, the second in three months, separated by only a temporary and partial improvement.

And this goes well beyond a simple demographic slowdown. The employment rate has fallen by one percentage point since the start of the year. The population aged 15 and over is estimated to have declined for a sixth consecutive month, while the core working-age population (15 to 64) is now down 0.4% year over year (graph 3). While this dynamic may partly explain the increased appeal of part-time work, it does not account for the magnitude observed so far this year. In short, the economic slowdown currently under way is now clearly reflected in the employment data and points to subdued economic growth for a second consecutive year.

Among the few positive signals, wage growth remains solid, although this indicator is less reliable during periods of heightened employment volatility. Measures that adjust for compositional effects, meanwhile, point to more moderate momentum. Hours worked are also up sharply year over year, but this largely reflects a base effect, as levels were particularly weak at the same time last year following production bring-forwards aimed at mitigating the threatened introduction of new US tariffs.

Implications

One could be tempted to blame tariffs for the underperformance of Quebec’s labour market. An analysis of the weakness stemming from recent tariff changes affecting metal products External link., which weigh more heavily on Quebec’s economy than on the Canadian average, was published by our team earlier this week. However, over a 12‑month period, only six sectors show employment gains, and these are generally modest. This suggests that tariffs account for only part of the story. As with GDP data, labour market indicators point to a more broad-based slowdown in Quebec.

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