Ontario has recorded the steepest rise in unemployment across Canada for the second consecutive year, according to a recent report from the province’s Financial Accountability Office (FAO). The findings reveal that while the province continues to create jobs, the pace has significantly slowed, resulting in a notable increase in the unemployment rate.
Job Creation Slows Dramatically
The FAO’s report indicates that Ontario added 80,900 jobs in 2025, a decline from the previous year and the slowest growth since 2015, excluding the impact of the COVID-19 pandemic. This sluggish job creation did not align with the growing number of job seekers, leading to an uptick in the unemployment rate to 7.7 per cent—up from 7.0 per cent in 2024. This figure represents the highest unemployment rate since 2012, barring the pandemic years.
The data revealed widespread unemployment across the province, with the exception of the St. Catharines-Niagara region. Guelph experienced the most significant employment decline, suffering a 5.3 per cent drop in jobs.
Government Response Criticised
Ontario Liberal MPP Stephanie Bowman expressed concern over the worsening employment situation, attributing the rising unemployment to failures in the provincial government’s strategy. “This report is one more clear sign — from an independent office — that the plans of the grandstanding Doug Ford Conservative government are failing to protect the people of Ontario,” Bowman stated. She highlighted that Ontario now accounts for 45 per cent of all unemployed Canadians, despite housing only 39 per cent of the national workforce.
The FAO noted that job growth has been uneven, with eight out of Ontario’s 16 major industries showing an increase in employment, primarily in sectors that typically offer lower wages. Conversely, industries severely affected by tariffs, such as manufacturing, agriculture, and warehousing, have seen significant job losses.
Tariffs and Economic Challenges
A representative from the Ministry of Economic Development, Job Creation and Trade acknowledged the adverse effects of tariffs imposed by the U.S., underlining their role in disrupting supply chains and creating challenges for both workers and businesses. The spokesperson stated, “President Trump’s tariffs and tariff threats continue to disrupt supply chains and pose unprecedented challenges for workers and businesses on both sides of the border.” They reaffirmed the government’s commitment to providing support for those affected by tariff-related issues while striving to make Ontario the most competitive province in the G7 for investment and job creation.
A Mixed Picture for Ontario’s Workforce
Despite the challenges, some sectors are seeing growth. The FAO’s report highlights that job creation remains possible, albeit at a slower rate than desired. Industries that have weathered the storm are contributing to the overall employment landscape, even as the province grapples with rising unemployment.
Why it Matters
The increasing unemployment rate in Ontario signals deeper economic issues that could have long-lasting effects on the province’s workforce and overall economic health. With a significant portion of unemployed individuals relative to the labour force, Ontario’s ability to attract and retain talent may be compromised. Furthermore, the provincial government’s handling of tariff-related disruptions will be crucial as it seeks to foster a more stable and competitive job market. As these economic challenges continue to unfold, the implications for Ontario’s residents and businesses will be profound, necessitating urgent and effective policy responses.
