The job hunt in Canada is getting noticeably harder, according to a new survey from the Angus Reid Institute. The polling group found that the country now has nearly three unemployed people for every available job opening — a striking turnaround from the labor shortage of 2022, when employers struggled to fill positions.
That shift helps explain a split in how Canadians view the job market. Most people who already have jobs feel safe in them, but those looking for work are far more pessimistic.
From labor shortage to surplus of job seekers
Just a few years ago, the story was the opposite. In 2022, Canada was in the midst of a post-pandemic hiring boom, with more job openings than unemployed workers in many sectors. Employers offered signing bonuses, higher wages, and flexible arrangements to attract talent.
Now the pendulum has swung. The Angus Reid data shows the ratio of unemployed people to job openings has climbed to nearly three-to-one. That is even looser than the roughly two-to-one ratio seen before the pandemic, when the job market was considered relatively balanced.
For everyday workers, the implications are clear: when there are more people chasing fewer openings, employers have less incentive to raise pay or sweeten benefits. Wage growth, which had been running hot during the labor shortage, has already begun to cool — a trend visible in recent payroll data showing wage growth slowing to 3.2%.
What the survey found
The Angus Reid Institute, a well-known Canadian polling firm, surveyed Canadians about their perceptions of the job market. The results reveal a stark divide:
- 87% of employed Canadians said their jobs feel secure.
- 77% of job seekers — or people who know someone close to them looking for work — described the market as “bad” or “terrible.”
That gap makes sense. People with steady jobs may not feel the pinch of a tighter labor market directly. But for those actively searching, the experience is one of long applications, few callbacks, and intense competition for each posting.
The survey also suggests that the difficulty is not just anecdotal. With nearly three unemployed people per opening, the math is against job seekers. Even if every opening were filled tomorrow, a large pool of unemployed workers would remain.
Why the job market has turned
Several factors have contributed to the cooling. High interest rates, set by the Bank of Canada to fight inflation, have slowed economic activity. Businesses, facing higher borrowing costs and uncertain demand, have pulled back on hiring. Some sectors, like tech and manufacturing, have seen layoffs, though overall employment has remained relatively resilient.
Canada’s economy has also faced external pressures. Trade tensions, including the threat of tariffs, have weighed on business confidence. Recent data showed strong second-quarter GDP growth, but that momentum may be hard to sustain if tariffs bite. Meanwhile, RBC sees July’s economy stalling, clouding the outlook for the third quarter.
Population growth has also played a role. Canada has welcomed a record number of immigrants and temporary residents in recent years, expanding the labor force. While that boosts the economy’s long-term potential, it also means more people competing for the same number of openings in the short term.
What it means for investors
For investors, a looser job market is a double-edged sword. On one hand, it could help the Bank of Canada in its fight against inflation. When workers have less bargaining power, wage growth tends to moderate, reducing upward pressure on prices. That could give the central bank room to cut interest rates sooner, which would be a tailwind for stocks and bonds.
On the other hand, a weakening job market can signal slower consumer spending, which drives a large share of Canada’s economy. If more people struggle to find work, household budgets tighten, and retailers, restaurants, and other consumer-facing businesses could feel the pinch.
For those invested in Canadian equities, the picture is mixed. The TSX has been sensitive to global factors, including rising US bond yields and falling metals prices, which dragged the index down 1% recently. A softer job market could add to concerns about domestic demand.
However, it’s important to keep perspective. The survey shows that most employed Canadians feel secure, suggesting the labor market is not in freefall. It’s more accurate to say it has normalized from an unusually tight period.
What to watch next
Investors will be watching the Bank of Canada’s next moves closely. The central bank has already begun cutting rates, and a continued cooling in the job market could accelerate that pace. Lower rates would reduce borrowing costs for businesses and households, potentially supporting economic growth.
Also on the radar: the next official jobs report, which will provide a more detailed picture of employment gains, unemployment, and wage growth. The Angus Reid survey is a sentiment gauge, but the hard data will confirm whether the trend is as pronounced as the poll suggests.
For job seekers, the advice is practical: be prepared for a longer search, consider broadening your options, and keep an eye on sectors that are still hiring. For investors, the key is to watch how the labor market evolves — it’s a leading indicator for both inflation and consumer spending.
As always, no single survey tells the whole story. But when a respected pollster finds that the job market has turned from a shortage to a surplus of workers, it’s worth paying attention.
