A Steady Labour Market, an Unsteady Staffing Recovery: Reading the June Numbers

Canada's labour market spent June holding its breath. The economy added a modest 18,000 jobs, the employment rate ticked up 0.1 percentage points to 60.8 percent, and the unemployment rate eased for a second straight month, to 6.5 percent, according to Statistics Canada's June Labour Force Survey, released July 10. On its face, this is a market in equilibrium: not accelerating, not contracting, simply absorbing whatever comes next. For staffing firms planning the second half of 2026, that equilibrium is both the good news and the caveat.

The headline numbers

June's job growth followed a considerably stronger May, when the economy added 88,000 positions. Taken together, the two months point to an economy that has grown by roughly 99,000 jobs over the past year, a 0.5 percent gain concentrated almost entirely in full-time work, which rose 0.8 percent. Nearly all of that growth came from the private sector, where payrolls expanded by 94,000 positions over the past 12 months even as public sector headcount barely moved, and in June specifically contracted by 31,000. For an industry built on serving private employers, that imbalance is worth noting. The hiring engine driving Canada's job market right now is the one staffing firms are best positioned to serve.

Wages continue to run hot. Average hourly earnings rose 3.3 percent year over year in June, to $37.20, accelerating from 3.0 percent growth in May. For staffing firms, sustained wage growth is a mixed commercial reality. It supports bill rate increases, but clients have grown more resistant to passing the full cost through, a tension the industry's own analysts have identified as a persistent margin pressure this year.

Where the jobs are, and aren't

The sectoral picture is where the staffing story becomes more specific. Accommodation and food services added 15,000 jobs in June, the third consecutive monthly gain, with growth concentrated in Quebec and Ontario, a seasonal tailwind that staffing firms serving hospitality and events clients should already be capitalizing on. Manufacturing moved in the opposite direction, shedding 17,000 jobs and erasing May's gain. The sector has now lost 61,000 positions since its January 2025 peak, a decline Statistics Canada links directly to tariff related uncertainty. Agriculture and utilities also contracted. For industrial and light industrial staffing desks, this is the clearest signal in the release: the softness in manufacturing demand is structural to the current trade environment, not a one month blip, and firms with concentrated exposure there should expect the drag to persist through the summer.

Youth employment offered a brighter counterpoint. The youth unemployment rate fell 0.7 percentage points, to 12.7 percent, driven by a burst of part time hiring, and the broader student summer job market looks materially better than it did a year ago. The unemployment rate for returning students fell to 15.3 percent, down more than two points from June 2025. Most of those students found work in retail trade, accommodation and food services, and information and recreation, categories that overlap heavily with the flexible, short cycle placements staffing firms specialize in.

The regional map

Quebec's labour market continued its recovery from a difficult start to the year, adding 14,000 jobs in June for a second consecutive monthly gain and pushing the unemployment rate down to 5.4 percent, nearly a full point below its April peak. Montreal's unemployment rate fell to 5.9 percent. Ontario, by contrast, was flat in June after a strong two month run, with its unemployment rate holding at 7.0 percent, still elevated in trend terms even as the Toronto region shows gradual improvement off its February high. Nova Scotia and Saskatchewan posted the strongest provincial gains of the month, while the territories told a more troubling story. Unemployment in Yukon and the Northwest Territories has climbed sharply from recent lows, and Nunavut's rate remains in double digits.