NEARLY 1.5 MILLION UNEMPLOYED IN CANADA

 

Canada’s unemployment rate fell. Don’t celebrate yet.

The headline says the unemployment rate dropped to 6.5% in January 2026. If you stop reading there, it sounds like relief. But the fine print tells a different story: the rate fell largely because fewer Canadians were searching for work, not because the job market suddenly got healthier. 

Here’s the number that should sober everyone up: it now takes close to six months, on average, to find a job. Statistics Canada’s unemployment-duration data puts the average spell at about 22.7 weeks. That’s not a “tight labour market.” That’s a warning light. 

UNEMPLOYED DURATION NEARLY 6 MONTHS

Even worse is what’s happening at the long end of the job hunt. In January, roughly 369,600 Canadians had been unemployed for 27 weeks or more—about one-quarter of all unemployed people. And more than half of those long-term job seekers had been out of work for a year or longer. That’s how temporary unemployment quietly becomes permanent damage: skills atrophy, confidence erodes, networks thin out, and employers start treating résumé gaps as a red flag. 

This is also why the unemployment rate can mislead. Under the Labour Force Survey rules, you’re only counted as unemployed if you’re actively looking (generally at least once every four weeks). When people get discouraged, go back to school, or simply stop searching for a while, they can vanish from the unemployment tally—even though their household finances are still under pressure. 

And there’s more trouble on the horizon. The Bank of Canada’s Business Outlook Survey showed firms staying cautious about hiring, and reporting points to a meaningful share of employers planning to reduce staffing. (Bank of Canada) The Bank’s own message lately has been blunt: Canada is heading into a multi-year economic restructuring, driven by trade shocks, slower population growth, and technology shifts—and that transition could be “painful.” 

So what should we do with this information?

First, households should ignore the comforting headline and plan like adults: three months of emergency savings may not cut it anymore if the average job search is pushing six months.

Second, Ottawa—and every premier—should stop treating “the rate” as a report card. If long-term unemployment is climbing, the priority can’t be slogans. It has to be conditions for real job creation: investment that actually sticks in Canada, faster approval timelines, fewer barriers to building and expanding businesses, and training pipelines that match jobs employers are actually hiring for.

Because when it takes half a year to land work—and a year for a growing number of people—Canada doesn’t have a “numbers” problem. It has a livelihoods problem.