Big job losses in March

Photo: The Canadian Press

The impact of the U.S. tariffs is already taking a toll on the jobs front in Canada, and that includes Kelowna.

Metro Kelowna lost 5,300 jobs in March, according to Statistics Canada’s Labour Force Survey released on Friday. The unemployment rate in the Central Okanagan jumped half a percentage point to 5.8%, which is the highest it has been since March 2022.

It was the second straight rough month for Metro Kelowna, which lost 4,800 jobs from January to February and had its jobless rate jump 0.4%.

The unemployment rate also increased over the entire Thompson-Okanagan region last month, moving from 5.7% in February to 6.1% in March.

The numbers were similar across the country, as the economy lost 33,000 jobs last month. That represented the biggest loss since January 2022. Canada’s unemployment rate increased to 6.7% from 6.6% in February.

“We saw a lot of layoffs happening in trade in March and we expect April to see even more layoffs and a rise in the unemployment rate,” RSM Canada economist Tu Nguyen said.

“Some manufacturing plants, especially in auto production, have already laid off their workers.”

Last month, the U.S. imposed tariffs on non-USMCA compliant imports from Canada as well as steel and aluminum imports as tariff threats by U.S. President Donald Trump went through a number of revisions and delays, heaping uncertainty onto businesses.

The U.S. also announced last month sector-specific tariffs on automobile imports that came into effect this week along with wide-ranging tariffs on other countries around the world, prompting concerns about the possibility of a global recession.

Nguyen said Canadian job losses will continue to rack up if the tariffs remain in place, pointing to the decision by Stellantis to pause work for two weeks at its assembly plant in Windsor, Ont., as it assesses the situation as an example of what may be to come.

“The auto sector is so integrated in North America that once you hit one country, you’re going to hit everybody,” she said.

Fan noted Canada lost around 7,000 manufacturing jobs in March.

“Employment in the sector will be watched closely in future jobs reports, for signs of tariffs impacting labour conditions in Canada,” she said.

Nguyen said the Bank of Canada is in a difficult position because there is still some underlying inflation.

“But given how weak the March jobs report is and given we are foreseeing a recession given the current tariff rate, I think the Bank of Canada might consider lowering the interest rate to 2.5 per cent,” she said.

The current benchmark rate is 2.75 per cent after seven consecutive cuts.

The Bank of Canada’s next interest rate decision is set for April 16 when it will also release its latest monetary policy report which will include its updated forecasts for the economy.

— with files from The Canadian Press