Public sector sheds 70,000 jobs as private hiring stalls

Public-sector employment in Canada fell by 70,000 in September, the fourth consecutive monthly decline, while private-sector employment was little changed for a second month, according to Statistics Canada’s Labour Force Survey.

The drop, a 1.5 per cent decline, accounts for more than the entire 68,000-job fall in total employment that the agency reported on Oct. 9. Most coverage of the release focused on the national headline, the unemployment rate rising 0.1 percentage points to 6.5 per cent, and on Alberta’s 23,000-job gain. The sector breakdown got less attention.

Compared with September 2025, public-sector employment is down 119,000, or 2.6 per cent. Statistics Canada said the decline is mostly in educational services. Private-sector employment is up 163,000, or 1.2 per cent, over the same 12 months. Total employment is up 95,000, or 0.5 per cent, from a year earlier.

The survey’s public sector covers more than the federal government. It includes employees of provincial and local governments, schools, universities and publicly funded health and social services. By industry, educational services lost 35,000 jobs (2.2 per cent) in September, health care and social assistance lost 23,000 (0.8 per cent) and manufacturing lost 13,000 (0.7 per cent). Statistics Canada reported a gain of 17,000 jobs (2.1 per cent) in other services.

The pattern matters because private-sector hiring has not filled the gap. A flat private sector means that when public employers cut or leave positions vacant, total employment falls instead of shifting from one sector to another. The agency said private-sector employment was little changed in both August and September.

For workers, the effect shows up unevenly. Quebec lost 49,000 jobs in September (1.1 per cent), the largest provincial decline, and its unemployment rate rose 0.4 percentage points to 6.0 per cent. British Columbia lost 20,000 jobs (0.7 per cent), its first monthly decrease since March. Alberta added 23,000 jobs, and its unemployment rate fell to 6.4 per cent. Women aged 25 to 54 lost 28,000 jobs and their unemployment rate rose 0.3 points to 5.3 per cent, while employment for men in that age group held steady.

Young Canadians were hit as well. Employment among people aged 15 to 24 fell by 48,000, or 1.8 per cent, the second straight monthly decline, and the youth unemployment rate was little changed at 13.0 per cent. Statistics Canada’s release does not break out how much of the public-sector decline falls on any one age group or province, so this report does not attempt to.

The labour force participation rate fell 0.2 percentage points to 64.8 per cent, which the agency described as the lowest level since December 1997, excluding 2020. Statistics Canada attributed most of the year-over-year decline to population aging. Holding the age mix at September 2019 levels, it said, the rate would be little changed from a year ago.

Average hourly wages rose 2.3 per cent from a year earlier, or $0.86, to $37.64 in September, up from 2.0 per cent growth in August. These figures are not seasonally adjusted.

The federal workforce is also under pressure. Canada News Media has reported that Parks Canada plans to cut 500 jobs while 2,917 employees were told their roles are at risk, and that the Public Service Alliance of Canada has set strike votes for 120,000 federal workers. The Labour Force Survey does not separate federal employees from other public-sector workers in the figures above, so those developments cannot be tied directly to September’s decline.

The numbers arrive as the Bank of Canada prepares to announce its next rate decision on Oct. 28. Our earlier coverage looked at the headline job losses, Alberta’s gain and what the weak data could mean for the decision. The next Labour Force Survey, covering October, is due on Nov. 6.

The Labour Force Survey is a sample survey, so monthly changes carry margins of error, and sector estimates can be revised or reverse in later months.

How we did this: we used Statistics Canada’s Labour Force Survey release for September 2026, published in The Daily on Oct. 9, 2026, at www150.statcan.gc.ca. All figures are seasonally adjusted except average hourly wages, and all comparisons use September data. We checked our own archive to avoid repeating earlier reports.

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