Average hourly wages in Canada grew 2.0 per cent in the year to August, the slowest pace since November 2017 outside the pandemic year of 2021, and the slowdown hit the country’s lowest-paid workers hardest, according to the Labour Force Survey released by Statistics Canada on Sept. 4.
That figure was largely overshadowed by the headline number in Friday’s release. The economy shed 42,000 jobs in August against economist expectations of a 15,000-position gain, while the unemployment rate held steady at 6.4 per cent. CBC News reported the loss surprised forecasters and ended a four-month run in which Canada added 181,000 positions.
For Canadians who already have a job, though, the wage data tells the harder story, and it is the part of the release that most coverage moved past. Statistics Canada breaks average hourly wages into four quartiles. For employees in the bottom 25 per cent of the wage distribution, average hourly pay rose just 1.1 per cent over the year, to $18.66. For the next quartile up, it rose 1.3 per cent, to $26.61. Workers in the third quartile, at $37.99, and the top quartile, at $65.15, each saw increases of 2.1 per cent, roughly double the rate of those at the bottom.
Set those numbers against prices. Canada’s consumer price index rose 3.0 per cent year over year in July, Statistics Canada reported on Aug. 17, driven largely by a 25.7 per cent jump in gasoline prices. On those figures, the average Canadian worker’s pay lost roughly a percentage point of purchasing power over the year. A worker in the bottom quartile lost closer to two.
In dollar terms, a 1.1 per cent raise on $18.66 an hour is about 20 cents. Someone working 40 hours a week at that wage gains a little over $400 a year before tax, at a point when the same basket of goods costs about three per cent more than it did last summer. Wage growth averaged 4.9 per cent across 2023 and 2024 and 3.4 per cent in 2025, so the deceleration to 2.0 per cent is not a small adjustment, it is the third straight month of slowing after 3.3 per cent in June and 2.8 per cent in July.
The report also carried mixed news for younger Canadians. Youth unemployment edged up 0.3 percentage points to 12.9 per cent, roughly double the national rate and still above the 10.8 per cent average recorded from 2017 to 2019. Employment among people aged 15 to 24 fell by 19,000.
The summer job market was better than last year’s, but the improvement was unevenly distributed. Statistics Canada found the unemployment rate for returning students averaged 15.9 per cent from May to August, down from 17.9 per cent over the same months in 2025. Most of that gain went to older students. Returning students aged 20 to 24 posted a summer unemployment rate of 9.2 per cent, down from 12.3 per cent a year earlier, while those aged 15 to 16 sat at 29.9 per cent, essentially unchanged from 2025.
A flat 6.4 per cent also conceals how difficult it has become to leave the unemployment pool once inside it. Of the 1.5 million people unemployed in August, 24.0 per cent had been searching for work for 27 weeks or more, well above the 17.1 per cent pre-pandemic average recorded from 2017 to 2019.
Statistics Canada flagged the trade dispute directly. Over the 12 months to August, the layoff rate averaged 0.9 per cent in industries that depend on U.S. export demand, compared with 0.7 per cent in other industries. The agency’s reference week ran Aug. 9 to 15, before Canada’s counter-tariffs on roughly $27.6 billion in American goods are scheduled to take effect Sept. 8. Manufacturing was the only sector to post a significant gain in August, up 22,000, with most of that in Ontario. Public sector employment, by contrast, fell for a third consecutive month and is down 78,000 since May.
The next Labour Force Survey lands Oct. 9. The number worth watching is not the headline rate, which has barely moved, but whether wage growth at the bottom of the distribution starts closing the gap with prices or keeps falling behind it.
via Statistics Canada and CBC News. Wage quartile, long-term unemployment and returning-student figures are drawn from the Labour Force Survey, August 2026. Inflation comparison uses the Consumer Price Index, July 2026.
