Potential Tariffs Take Their Toll
Toronto’s labour market is showing clear signs of strain as economic pressures continue to weigh on employment opportunities. As of February 2025, the city’s unemployment rate remains at 9%, unchanged from the previous month, while the employment rate has dipped slightly to 61%. The participation rate, which reflects workforce engagement, stands at 67%, suggesting that people are still actively looking for work despite growing economic challenges. However, a steep decline in job postings and hiring activity signals a worsening job market, leaving many workers with fewer opportunities.
A closer look at the Labour Force Survey (LFS) data reveals a troubling trend. Throughout 2024, Toronto’s unemployment rate gradually climbed from 7% in September to 10% in November, before stabilizing at 9% in early 2025. The employment rate has fluctuated between 60% and 62% over the past year, failing to show meaningful signs of recovery. Economic uncertainty—driven by high interest rates, inflationary pressures, and recent tariff policies—has contributed to hiring slowdowns, particularly in construction and manufacturing. The once-thriving technology sector has also cooled, with large firms scaling back hiring and implementing layoffs. Although immigration and population growth continue to add workers to the labour pool, job creation is not keeping pace, heightening concerns about long-term employment stability.
Despite the bleak job outlook, wages have been rising, adding another layer of complexity to the labour market. As of February 2025, the mean hourly wage in Toronto stands at $38.44, reflecting a steady increase from early 2024. Wages peaked above $40 per hour in late 2024, before slightly declining in recent months. While rising wages can signal a strong labour market, in this case, they appear to be driven by inflation, labour shortages in certain skilled trades, and the need for businesses to retain workers amidst high living costs. However, with many sectors struggling, higher wages alone are not translating into increased job security. In some industries, businesses are responding to higher payroll costs by freezing hiring or cutting positions altogether.
The JobsTO data on job postings further reinforces the severity of Toronto’s labour market slowdown. In February 2025, there were only 13,079 active job postings, a dramatic decline from the 63,000+ postings seen in June 2024. The number of companies hiring has also plummeted, from over 16,000 in mid-2024 to just 5,030 in February 2025. This decline is not seasonal but part of a sustained downward trend that began in late 2024 as economic headwinds intensified. The combination of rising wages, reduced business confidence, and slowing consumer demand has made many employers hesitant to expand their workforce.
Toronto now finds itself in a difficult labour market paradox—workers may be earning more per hour, but there are fewer jobs available. Many businesses, particularly in retail, hospitality, and small-scale manufacturing, are struggling to balance higher wages with declining revenues. The construction industry, already facing reduced project starts due to high material costs and tariffs, is seeing fewer job opportunities. Meanwhile, the tech sector, which once drove job growth, is seeing cutbacks after years of rapid expansion. With so many sectors under strain, even workers who are employed may face increased job insecurity.
Toronto Industry Sectors
Toronto’s labour market is experiencing a deepening employment crisis, as industry-wide job posting numbers have plummeted while employment growth remains uneven. Despite a year-over-year increase in total employment from 3.6 million in February 2024 to 3.72 million in February 2025, this growth is largely concentrated in a few sectors, while others—such as construction, retail, and transportation—are shedding jobs. The most alarming trend is the severe drop in job postings across almost all industries, signaling a worsening hiring freeze that could leave workers with limited employment opportunities in the months ahead.
Sectoral Shifts in Employment
The Labour Force Survey (LFS) data shows that several sectors saw notable job growth over the past year. The finance and insurance sector added over 55,000 jobs, while the scientific and technical sector grew by 13,000 jobs. Health care, creative industries, and business services also saw moderate employment gains. However, other sectors are struggling. Construction and utilities lost nearly 8,000 jobs, likely due to high material costs, interest rate hikes, and sluggish housing development. Retail and wholesale trade also shed nearly 12,000 jobs, reflecting weak consumer demand and potential shifts towards automation and e-commerce. Transportation and warehousing employment dropped by nearly 24,000, possibly due to supply chain adjustments and cost-cutting measures in logistics.
Job Postings Collapse Across Industries
While employment has held steady or increased in some industries, the JobsTO data tells a much more alarming story. Job postings have collapsed across nearly all industries, signaling that businesses are pulling back on hiring and preparing for economic turbulence. The finance and insurance sector, despite adding jobs year-over-year, saw job postings shrink from 5,901 in February 2024 to just 1,576 in February 2025—a staggering 73% decline. Similarly, science and technical sector job postings plummeted from 5,215 to just 1,417, indicating that even tech and professional services firms are pausing hiring. Retail and wholesale trade saw one of the sharpest declines, with postings dropping from 4,551 to just 1,120, which may reflect store closures, cost-cutting measures, and ongoing shifts toward online retail.
Construction and Manufacturing Facing Crisis
The construction and manufacturing sectors appear to be in a full-blown employment crisis. Construction job postings fell from 1,271 in February 2024 to just 286 in February 2025, a 77% drop, despite only a small decline in employment numbers. This suggests that many firms are holding onto existing workers but are not taking on new hires, possibly due to stalled projects, high costs, and a slowdown in housing construction. Manufacturing, despite seeing employment growth, saw job postings fall from 1,177 to just 210—a shocking 82% decline. The sharp decline in hiring demand raises concerns about the sustainability of employment levels in these industries.
Health Care and Education Holding Steady
Two sectors that show some resilience in both employment and hiring demand are health care and education/public administration. Health care employment grew by over 10,000 jobs year-over-year, and job postings—while still down significantly—remain relatively higher than other industries, at 1,646 in February 2025. Education and public administration added nearly 30,000 jobs, showing strong government hiring, although job postings still fell significantly, from 2,288 to 689.
A Bleak Outlook for Toronto’s Job Market
The combination of rising unemployment, slowing employment growth, and collapsing job postings paints a bleak picture for Toronto’s workforce. While wages have risen, fewer opportunities exist for job seekers, and businesses appear to be bracing for economic uncertainty. The sharp decline in hiring demand across finance, tech, construction, retail, and manufacturing suggests a widespread economic slowdown that could lead to further job losses in the coming months. Without targeted policy interventions—such as investment in infrastructure, incentives for business hiring, and job retraining programs—Toronto risks entering a prolonged period of labour market stagnation, leaving many workers without stable employment opportunities.
In Other News:
Hudson’s Bay Files for Creditor Protection
Canada’s oldest retailer, Hudson’s Bay, has filed for creditor protection and is planning to restructure its operations. The company, which operates over 80 stores nationwide, cites challenges such as subdued consumer spending, trade tensions between the U.S. and Canada, and a decline in downtown store traffic post-pandemic as reasons for this decision. Liz Rodbell, president and CEO, emphasized the necessity of this step to strengthen the company’s foundation and ensure its continued presence in Canada’s retail landscape.
The retailer has faced significant financial pressures due to inflation, high-interest rates, and changes in consumer spending habits. In recent years, Hudson’s Bay has been downsizing by laying off staff and selling real estate to fund its operations. Despite raising approximately $350 million in 2023 from real estate sales, these measures have not been sufficient to prevent the current financial crisis.
Decline in Rental Prices
Toronto’s rental market has also seen a downward trend. According to a report by Rentals.ca, apartment rents in Toronto were unchanged month-over-month at an average of $2,615 in February 2025, remaining at a 2.5-year low and declining 6.7% year-over-year. This marks the 13th consecutive month of annual rent declines.
The Toronto Regional Real Estate Board (TRREB) reported similar trends, with the average one-bedroom condominium apartment rent at $2,424 in Q4 2024, down by 5% compared to $2,552 in Q4 2023. Two-bedroom rents averaged $3,154, a decrease of 3.5% from $3,268 in the same period the previous year.
Decline in Toronto Home Sales
The Greater Toronto Area’s housing market has experienced a significant downturn, with home sales dropping by 28.5% in February compared to the previous month. This decline is attributed to ongoing affordability issues and reduced confidence in the economy among potential homebuyers, partly due to concerns about trade relations with the United States. New listings also decreased by 24.3% from January, and the average home price fell to C$1,063,300, a 1.8% decrease from the previous year.
AstraZeneca’s Investment in Toronto
On a positive note, AstraZeneca has announced a £460 million investment in Canada, creating 700 new scientific and high-skilled jobs in the Greater Toronto Area. This investment aims to bolster the company’s research and development capabilities and underscores Toronto’s potential as a life sciences innovation hub.
High-Speed Rail Network Plans
The Canadian government has committed to building a high-speed rail network linking Quebec City and Toronto, pledging $3.9 billion over six years for planning and preliminary work. This 100% electric rail network, named Alto, will cover approximately 1,000 kilometers and achieve speeds of up to 300 kph, with stations in Toronto, Peterborough, Ottawa, Montreal, Laval, Trois-Rivières, and Quebec City. The project aims to reduce travel time between Montreal and Toronto to three hours, offering a reliable and sustainable transportation alternative.
