Ontario has recorded the highest unemployment rate increase in Canada for the second consecutive year, as revealed by a recent report from the Financial Accountability Office (FAO) of Ontario. While the province continues to generate new jobs, the pace of growth has significantly decelerated, indicating a troubling trend for the local economy.
Job Creation Slows to a Crawl
The FAO’s report highlights a stark drop in job creation, with only 80,900 positions added in 2025. This figure marks a decline from the previous year and represents the slowest rate of employment growth since 2015, with the exception of the pandemic period. The report states, “Job creation did not keep pace with the increase in the number of people looking for work, causing Ontario’s unemployment rate to rise to 7.7 per cent in 2025, up from 7.0 per cent in 2024. This is the highest rate since 2012, excluding the pandemic.”
Unemployment figures have risen across all regions of Ontario, with the notable exception of St. Catharines-Niagara. Among the hardest hit was Guelph, which experienced a sharp 5.3 per cent decline in employment.
Criticism from Political Leaders
In response to the findings, Ontario Liberal MPP Stephanie Bowman expressed concern over the government’s handling of the economic situation. “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,” she stated. “Unemployment is rising faster in Ontario than in every other province in the country, and it was getting worse long before U.S. tariffs. Ontario accounts for 45 per cent of Canada’s unemployed workers, even though the province is home to only 39 per cent of Canada’s labour force.”
Sector Performance and Job Losses
The report further details that eight out of Ontario’s 16 major industries have reported increases in employment, yet the most significant gains came from sectors offering below-average wages. Conversely, industries heavily impacted by tariffs, such as manufacturing, agriculture, and warehousing, have seen job losses.
In light of these challenges, a spokesperson for the Ministry of Economic Development, Job Creation and Trade pointed to the financial support the government plans to provide for tariff relief. “President [Donald] 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 said. “We will continue to ensure support is there for businesses and workers facing tariff-related disruptions, while creating the conditions to make Ontario the most competitive place in the G7 to invest, create jobs, and do business.”
Why it Matters
The rising unemployment rate in Ontario not only reflects the challenges facing its economy but also poses significant social and political ramifications. As job growth stalls and more individuals find themselves out of work, the pressure mounts on the provincial government to implement effective strategies that will revitalise the labour market. With Ontario representing such a large portion of Canada’s unemployed, the implications extend beyond the province, potentially affecting national economic stability. Policymakers must address these issues promptly to safeguard the well-being of both workers and businesses in Ontario.
