Bank's assistant chief economist sets the scene for further economic growth in 2026
Royal Bank of Canada (RBC) assistant chief economist Nathan Janzen has sounded an optimistic note on the future of the Canadian economy after the latest labour market report showed 14,000 jobs added last month.
Writing shortly after that announcement, Janzen said despite current complications around looming trade negotiations, the economy appeared poised for a decent performance in the long run.
"Looking ahead, the economic growth backdrop still faces headwinds," he said. "Trade uncertainty remains ahead of negotiations to extend CUSMA this summer, and higher energy prices are cutting into household purchasing power.
"But we remained cautiously optimistic that per-person economic growth and labour market conditions will continue to gradually improve this year, with the unemployment rate edging broadly lower."
Regional disparities widen
Part-time employment rose by 15,000 in March, according to Statistics Canada, while full-time positions edged down by 1,000. Paid employment climbed by 20,000 – split between private-sector gains of 15,000 and public-sector gains of 5,000 – while self-employment fell by 6,000. Manufacturing employment was largely unchanged, rising by just 2,500 following significant declines in January and February.
Wage growth accelerated to 4.7% year over year in March, up from 3.9% in February. For permanent employees, wages grew 5.1%, compared with 4.2% the prior month. Hours worked edged up 0.2%. The labour force participation rate remained flat at 64.9%, though it ticked slightly higher among core working-age adults aged 25 to 54, reaching 88.2%.
Regional results were uneven. British Columbia recorded the steepest provincial decline, losing 19,000 jobs and pushing its unemployment rate up 0.6 percentage points to 6.7% – the highest level since February 2016, outside of the pandemic period. Meanwhile, Manitoba and Saskatchewan saw employment rebound, adding 11,000 and 5,800 jobs, respectively. Saskatchewan posted the lowest provincial unemployment rate at 5%. Quebec’s unemployment rate fell 0.5 percentage points to 5.4%, while Ontario’s remained stable.
Among Canada’s 20 largest census metropolitan areas, London reported the highest unemployment rate at 9.1%, followed by Kitchener–Cambridge–Waterloo at 8.6%, Windsor and Barrie at 8.5%, and Toronto at 8.1%. Quebec City recorded the lowest rate at 2.6%, based on three-month moving averages.
