Ontario unemployment hits highest level since 2012 as job growth slows: report

New data reveals Ontario’s employment landscape faced significant challenges last year, with the province recording its highest unemployment rate since 2012, excluding the pandemic years.

According to a report from the Financial Accountability Office of Ontario (FAO), job creation in 2025 failed to keep pace with the number of people entering the workforce. Job growth sat at just one per cent last year, a decrease from the 1.7 per cent growth seen in 2024.

Colin Mang, an economist at McMaster University, said the province has been particularly vulnerable to recent geopolitical shifts.

“Over the past year, Ontario has been very hard hit by the trade war with the United States,” Mang said. “We’ve seen big slowdowns in the auto sector and steel manufacturing, and also in other types of manufacturing industries, and that has really slowed down the rate of job growth here in Ontario.”

Ontario’s unemployment rate climbed to 7.7 per cent in 2025, up from 7.0 per cent the previous year. Stephanie Bowman, the Ontario Liberal finance critic, noted that this marks the largest unemployment increase in Canada for the second consecutive year.

“Ontario, once the economic engine of the country, is now dragging the country down,” Bowman said.

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The FAO report also highlighted a divide between sectors, showing that private sector employment grew by 1.4 per cent in 2025, while public sector employment declined by 0.1 per cent.

Jessica Bell, the NDP finance critic, said the Ford government should be prioritizing investments in small businesses to stimulate the market.

“We would like to see much stronger ‘buy Ontario’ rules,” Bell said. “Government money goes to small businesses and medium-sized businesses that are based in Ontario. Currently, a lot of money that we are spending on big transit projects or new hospitals, they are going to U.S. companies.”

As for the future of the market, Mang suggested the recovery remains tied to international affairs. He noted that the economic outlook depends on how quickly the conflict in Iran concludes, as well as the outcome of free trade negotiations with the United States this summer.

“If both of those turn out very favourably, then the Ontario economy could grow rapidly,” Mang said.

In a statement to CHCH News, the office of Vic Fedeli, Minister of Economic Development, Job Creation and Trade, said the government has introduced various support measures but pointed to external pressures as a primary cause for the slowdown.

“President Trump’s tariffs and tariff threats continue to disrupt supply chains and pose unprecedented challenges for workers and businesses on both sides of the border,” the statement read.

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