Canada’s labour market contracted sharply in February with a loss of about 84,000 jobs, pushing the national unemployment rate up to 6.7 per cent, according to the latest Labour Force Survey from Statistics Canada.

The decline marked one of the steepest monthly employment drops in recent years outside the pandemic period. Losses were concentrated in full-time positions, which fell by more than 100,000 during the month, while part-time employment showed little change.

Private sector employment accounted for much of the downturn. Statistics Canada reported a decline of roughly 73,000 private sector jobs in February alone, offsetting gains seen late in 2025 that economists largely attributed to seasonal hiring during the Christmas period.

The overall employment rate also slipped as fewer Canadians were working while more people entered or remained in the job search. The unemployment rate rose two-tenths of a percentage point from January’s level of 6.5 per cent.

The figures arrive amid broader questions about where job growth has been occurring over the past year.

Federal officials, including Prime Minister Mark Carney, have pointed to overall job creation in recent press briefings. Labour data, however, indicate much of that growth has not come from the private economy.

Statistics Canada data show total employment was only modestly higher compared with early 2025, rising by about 134,000 jobs over the past 12 months. Over the same period, the number of private sector employees declined by roughly 52,000 positions, meaning net employment growth largely came from government and other public sector positions rather than private businesses.

The trend has raised concerns among some economists about the composition of employment growth. Public sector hiring can support services and infrastructure, but sustained expansion in government payrolls alongside weak private hiring can indicate slower investment and declining business confidence.

The February report also highlighted uneven impacts across the labour market. Youth unemployment climbed to more than 14 per cent, with job losses spread across both goods-producing and service-producing industries.

The labour market data also come as Canada moves ahead with expanded education and research partnerships with India. During a recent visit to the country, Carney pointed to the large number of Indian students already studying in Canada, estimated at roughly 400,000, while announcing new initiatives that include scholarships, research placements and academic partnerships between Canadian and Indian institutions. The measures include 13 university partnerships and additional funding for scholarships and research positions, developments that arrive as many Canadian youth continue to face challenges finding work or securing the funds needed to pursue higher education.

With the unemployment rate now at 6.7 per cent and private sector employment declining over the past year, the latest figures suggest Canada’s labour market entered 2026 under increasing strain despite earlier claims of overall job growth.