Saturday, September 5, 2026 A wild week wraps up with mixed signals: Canada's job market stumbled just as America's roared back, the TSX gave back some ground, and Tuesday brings a new round of retaliatory tariffs. Here's what actually matters for your wallet. 1. Canada Lost 42,000 Jobs in August — Unemployment Holds at 6.4% Statistics Canada's Labour Force Survey showed employment fell by 41,700 to 42,000 in August, a sharp reversal after July's 75,100-job surge and well short of the roughly 15,000-job gain economists expected. Full-time work took the biggest hit, down about 36,000, while the public sector shed jobs for a third straight month. Manufacturing was the lone bright spot, adding 22,000 positions. The unemployment rate held steady at 6.4% because the labour force shrank too, and wage growth cooled to just 2.0% year-over-year — the slowest pace since 2017 outside the pandemic. WHAT IT MEANS FOR YOU Slower wage growth means smaller raises are more likely ...
The Bank of Canada (BoC) has issued a stark warning about the country’s low productivity, emphasizing the need for immediate action. In a recent address, Senior Deputy Governor Carolyn Rogers urged businesses to invest more in order to enhance productivity. This move, she emphasized, would serve as a crucial buffer against the looming threat of inflation.
Rogers declared, “It’s an emergency - it’s time to break the glass.” She stressed that increasing productivity is essential for safeguarding the economy without relying solely on higher interest rates. The BoC has already raised rates to a 22-year high, but Rogers refrained from specifying a timeline for potential rate cuts.
The Canadian economy grapples with several challenges affecting productivity:
- Insufficient Investment: Rogers highlighted the lag in investment in machinery, equipment, and intellectual property.
- Lack of Competition: A competitive landscape is crucial for driving productivity gains.
- Skills Utilization: New Canadians often struggle to fully utilize their skills, contributing to the productivity gap.
Rogers warned that inflation could become a more significant threat due to factors such as:
- Decreasing Globalization Benefits: As globalization wanes, prices face pressure from demographics, climate change, and trade tensions.
- Productivity and Inflation: An economy with low productivity can only grow so quickly before inflation takes hold.
Despite expectations of productivity improvement post-pandemic, progress has been slow. Meanwhile, other nations outpace Canada in investment. Rogers emphasized the urgency of reversing this trend.
Canadian businesses must prioritize productivity enhancements to fortify the economy against inflationary pressures. The recent uptick in labor productivity is encouraging, but sustained efforts are necessary.
Key Statistics:
- Canadian businesses’ labor productivity rose 0.4% in Q4 2023 after six consecutive quarters of decline.
- Annual productivity declined by 1.8% in 2023, marking the third consecutive year of decline.
The Bank of Canada remains vigilant, ready to act if needed. Boosting productivity is not just a recommendation; it’s an economic imperative.
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