StatsCAN’s January 2025 Labour Force Survey reports 76,000 new jobs added and unemployment down to 6.6%, marking the third consecutive month of growth. While this suggests resilience in Canada's job market, hiring conditions remain uncertain due to interest rate cuts, shifting immigration policies, trade uncertainty, and slowing wage growth
For Canadian employers, understanding these evolving dynamics is critical for workforce planning and talent acquisition—especially in high-demand sectors like technology, engineering, and manufacturing.
January’s employment boost was driven primarily by manufacturing (+33,000 jobs, +1.8%) and professional, scientific, and technical services (+22,000 jobs, +1.1%), which includes many STEM-related roles in engineering, IT, and scientific research.
The increase in STEM hiring highlights growing demand for highly skilled professionals, reinforcing the need for strategic recruitment efforts in tech and engineering fields. Companies looking to hire in technology, software development, or engineering roles must focus on competitive employer branding and retention strategies to stay ahead.
At the same time, youth employment surged by 31,000 jobs (+1.1%), offering improved opportunities for young workers. Core-aged workers (25-54) also saw employment growth, reinforcing broad-based hiring recovery.
However, wage growth has slowed to its lowest rate since April 2022 (+3.5% year-over-year), and looming policy and economic shifts could impact hiring in key sectors.
The Bank of Canada reduced its key policy rate by 25 basis points to 3% in January 2025, aiming to stimulate economic growth amid concerns of a soft labor market and sluggish GDP expansion.
Meanwhile, the U.S. Federal Reserve has held its interest rates steady, leading to a weaker Canadian dollar. This benefits Canadian exporters but also raises costs for businesses reliant on imported goods.
Adding to the uncertainty, newly announced U.S. tariffs on Canadian imports threaten to disrupt trade-dependent industries. While these tariffs have been temporarily deferred, businesses in affected sectors must prepare for potential workforce adjustments if trade disputes escalate.
So far, manufacturing employment has remained stable, but hiring in trade-sensitive sectors may become more cautious. Employers should stay ahead of shifting demand and adjust their workforce plans accordingly.
Canada’s immigration policies are set to be a major political focus in 2025, as the recent proroguing of Parliament delays pending immigration reforms. This could affect talent pipelines in key industries, particularly healthcare, construction, and technology, which rely heavily on skilled immigrants.
At the same time, Canada is reducing both permanent and temporary immigration levels, citing housing shortages and affordability concerns. While this could ease infrastructure pressures, it may also tighten labor supply in industries facing ongoing talent shortages.
For businesses hiring in STEM fields, changes to Canada’s immigration policies could impact the availability of international talent, making proactive recruitment strategies even more critical.
February is Black History Month, a time to recognize the contributions of Black Canadians and assess workplace diversity and inclusion efforts. While StatsCAN’s Labour Force Survey does not specifically track DEI metrics, this is an opportunity for employers to evaluate hiring and retention strategies to ensure more inclusive workplaces.
A strong employer brand that prioritizes diversity is more attractive to job seekers and can improve talent retention. Businesses that prioritize diversity, inclusion, and equity are better positioned to attract and retain top talent in an increasingly competitive job market.
While job numbers look positive, economic and political uncertainty mean businesses should remain agile in workforce planning.
Craig Brown, CEO of Agilus Work Solutions, emphasizes, "Hiring in an uncertain economy requires foresight and flexibility. Employers who focus on workforce planning, skills development, and inclusive hiring will be best positioned for long-term success. Now is the time to build strong employer brands and competitive hiring strategies."
Canada’s labor market is starting the year strong, but employers must navigate shifting economic conditions in the months ahead. Rate cuts, trade disruptions, slowing wage growth, and immigration changes all impact hiring decisions, making agility and strategic workforce planning more important than ever.
For businesses looking to stay ahead of these changes, Agilus Work Solutions offers expert workforce solutions that help employers attract, hire, and retain top talent—especially in technology and engineering fields. Let’s talk about how we can help you prepare for the future of work in Canada.