Canadians struggling to seek out stable employment or switch jobs may face an uphill battle over the following 12 months because the trade war keeps most businesses stuck in neutral and the job market “subdued.”
A brand new report from the Bank of Canada shows a big portion of companies say they’re taking a wait-and-see approach quite than investing in growing their operations and hiring latest staff.
Based on the central bank’s Business Outlook Survey for the third quarter of 2025, most businesses say they expect demand “weakness” for his or her services and products over the following 12 months, which implies many are expected to carry off on hiring latest employees.
“Hiring intentions remain subdued. Most firms don’t plan to extend the scale of their workforce over the following 12 months. Soft demand, ongoing tariff uncertainty and minimal capability pressures mean few businesses have to add staff,” said the Bank of Canada.
“Businesses not expect sales growth to strengthen over the approaching 12 months as tariff-related impacts proceed to carry back demand. Firms attribute this anticipated weakness largely to broad spillover effects from the trade conflict,” said the Bank of Canada.
A few of these “spillover effects” include weaker spending by customers on services like renovations, corporate travel and events, in addition to worries of less consumer spending over the following 12 months as affordability stays a struggle for a lot of, in keeping with the survey report.
The central bank also cited the weak outlook for the housing sector as one in every of these trade war effects, which has hampered demand for businesses and their services. This may occasionally include demand for home renovations and housing developments.
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Tariffs imposed by the US particularly have meant higher costs for some goods and services, which has led businesses and global economies, including Canada, to hunt alternative trading partners.
Wages might also be affected. On top of a troublesome job market to get into, Canadians who’re currently employed may discover their wages and salaries usually are not going to extend as much as last 12 months.
The Bank of Canada says businesses participating within the third quarter survey expect to extend wages for his or her staff by 2.3 per cent on average over the following 12 months, down from 2.9 per cent a 12 months prior.
The unemployment rate in Canada was recorded at 7.1 per cent in September and has risen from 6.9 per cent in June as businesses adapt to the evolving trade outlook, especially for manufacturing.
Although most businesses say they plan to pause hiring quite than lay off staff, the Bank of Canada highlighted the aluminum and steel industry as being at the next risk for layoffs consequently of tariffs.
“The share of firms planning outright staff reductions stays just like that in [the] previous quarter. Nonetheless, special consultations this quarter with firms within the aluminum and steel industry revealed that the impacts of U.S. tariff increases are resulting in significant layoffs,” said the Bank of Canada.
“Canadian exporters of steel and aluminum products currently facing sectoral U.S. tariffs reported especially weak outlooks,” said the Bank of Canada.
“Although some exports of primary aluminum have been redirected to Europe, these exporters view this strategy as an unsustainable alternative to U.S. market access due to concerns about long-term profitability.”
Prime Minister Mark Carney remains to be working with U.S. President Donald Trump on a trade deal, with the goal of reducing or eliminating the U.S. tariffs on Canada that Trump has repeatedly imposed.
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