Canada’s labour market enters 2026 in uneasy balance – soft for job seekers yet steady enough to keep rate‑cut hopes in check, with clear implications for brokers and lenders.
Indeed Hiring Lab’s 2026 Canadian Jobs & Hiring Trends Report described 2025 as “soft, but fairly stable,” noting that “while these developments filtered into employer demand, the response wasn’t dramatic.”
It found job vacancies easing from 3.1% in Q3 2024 to 2.8% in Q3 2025, with postings on Indeed essentially flat heading into year‑end.
Economic forecasts in the report pointed to real GDP growth rebounding to “about 1.6% year‑over‑year by the end of 2026, up from an estimated just 0.5% growth in 2025,” a pace “likely sufficient for the unemployment rate to edge lower and the job vacancy rate to stabilize.”
For now, though, the jobs backdrop looked more stagnant than strong. Over the three months to November 2025, “the layoff rate of employees was down 9% from its 2017–2019 average, while hiring rates were down 22% over the same period,” reinforcing a “low hire‑low fire labour market.”
Younger workers felt the crunch most, with the share of 15–24‑year‑olds who had never worked rising to 26% from 21% three years earlier, and long‑term joblessness climbing among prime‑age Canadians.
Regional gaps were stark. Ontario posted one of the highest unemployment rates at 7.6%, with the sharpest increase since 2019, while Quebec’s jobless rate sat at 5.4%, the lowest in the country and roughly where it stood pre‑pandemic.
Quebec job seekers were also less pessimistic, with just 28% saying they lacked confidence about finding work quickly, versus 34% Canada‑wide.
For housing and mortgage markets, that uneven picture intersected with rate‑path uncertainty. Bank of Canada’s final 2025 decision noted that the policy rate ended the year at 2.25%, “a brightening outlook for variable-rate mortgage holders and HELOC (home equity line of credit) borrowers,” even as “Canada’s national housing sector still shows no signs of a sharp recovery.”
The piece warned that traders have already “ramp[ed] up expectations of a potential rate hike” in 2026 after a “resilient labour market and a slight dip in the national unemployment rate,” with a steady rate through 2026 now seen as the most likely outcome.
The Indeed report’s message for mortgage professionals is less about a turning point than a slow grind. Population growth “could turn negative in 2026” as non‑permanent residents leave, even as mentions of AI in job postings nearly doubled to 5.9% of postings and 29% of workers reported using AI regularly at work – shifts that could reshape where higher‑paying jobs emerge next.
A still‑soft, regionally fragmented labour market, coupled with policy uncertainty on trade, immigration and rates, means originations are more likely to be driven by targeted pockets of demand and refinance opportunities than by a broad‑based surge in buying power.
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