No 'economic spark' on horizon for job market

Hi. Brandon set the stage for us when it comes to themes that we can expect to see in Canada's labor market this year. I expect to see both a lot of similarities from the kind of static conditions that have prevailed over the past few years. And yet at the same time we have all these major policy and technological changes happening in the background that are also going to define the course ahead. So what I mean on the static side, Canadian unemployment rate was pretty flat in 2025. Job hopping, churn in the labor market, layoffs, hiring, all pretty slow. And I don't see a real economic spark to get things moving in a stronger direction for job seekers. Most projections for GDP growth, for instance, are maybe a little bit better than last year, but nothing too energetic. And so in that way I think it's fair to expect a lot of the labor market to remain pretty similar in the year ahead. And yet there are some major policy and technological changes happening that are also, even if in the near term the shifts are subtle, I think going to be have major impacts on the job market both today and going forward. And I think the three that I'll really list, the first is the trade war. It's the most kind of like top of mind fast moving development. The second, also quite fast moving that would probably get more coverage if it wasn't for the trade war, is Canada's shifting demographic situation where population growth has gone from a really rapid pace now basically to standstill and how that's impacting the pace of job growth and what's happening among this large population of non permanent residents in Canada who some of whom are going to be leaving. And then the final theme is on the technology front, the AI. Lots of Canadians workers are using AI in their jobs on day to day basis. We ran a survey of this. We found 29% of Canadian workers use AI multiple times per week at work. So this technology is everywhere. But in terms of how it's transforming organizations and the labor market overall, that's something that's going to be I think more gradual, but something I'll be watching closely in 2026. Let's just expand on this a little bit. I know you said you'll be watching for it. Any data that you can maybe share with us when it comes the impact of AI changing the labor market when it comes to skills or job losses or workflow. Anything that you're seeing that you could share at this point? Well, so fitting with the theme that I think the aggregate labor market has been pretty static over the past few years. I think if you were just to look at the Canadian job numbers from a bird's eye view, you don't see major impacts. The number of people working, for instance, in highly jobs, highly exposed to AI, they've been evolving pretty similarly to others, I think, where there might be some potential impacts and there's also lots of other trends going, going on that could also affect there. There are few, some areas more subtle that we have to kind of like look a bit closer at. So one of those aspects is for a lot of AI exposed jobs, there aren't many job opportunities out there. Now part of that is just kind of like an economy wide phenomenon that just labor demand has come down across the board. But I think looking for instance at some areas of tech and certain other white collar jobs, that demand for those workers is down substantially. And so finding a job in many of those areas has gotten tougher. And so that's kind of probably slowing the pace of growth in those jobs. And it's impacting job seekers, especially younger job seekers. So one cut of the data I've been looking at is splitting out, looking at work in sort of like high AI exposure, high wage jobs, so white collar professional managerial job types and seeing how things have evolved by different age groups. And what I've noticed is since 2022, which is when we entered this new age AI age, there's a really real dividing line when you get to age 30, over 30, employment in these occupations has, the share of the population working in these roles has remained elevated, hasn't changed much among those in their 20s. We've seen it come down a bit. So, so this could be like sort of like the tip of the iceberg when it comes to sort of like the employment effects that the share of younger workers, 20 to 29 year olds in these high wage, high exposed jobs has declined. But one I've got, I've got to complicate the story a little bit. These, the young, the 20 somethings, employment in these jobs soared over the years prior to 2022. And so like if we looked over a long term, there's still tons of young people working in these high wage AI exposed jobs. But the situation has turned over the past few years and I think that's highlighting how job seekers might be experiencing some effects even if in the aggregate they haven't been too substantial. What would you say are the best pockets of the job market? What is your data telling you? Sure. So we did an analysis indeed of some jobs where we combined several different sort of like factors. Into coming up with a list of the best jobs in Canada. And one of those factors was just high pay and another of those factors was just the state of demand. How well are the job posting trends in these positions evolving? And perhaps not surprisingly, a lot of the list are healthcare related jobs. Healthcare related jobs that require many years of training in schooling. But when it comes to areas of, you know as doctors, therapists, nursing, these are jobs that despite a cooling overall labor market, they still remain in strong demand and they pay quite well. Brandon, just lastly, you had mentioned that the pullback in population numbers was a theme that we will continue to see make its make its way rather through the labor market this year. It was also a significant aspect to the January employment numbers. Take us through that, that mixed bag of data that came out for the start of the year and what stood out for you the most there? So the January employment numbers, we saw an employment decline of about 25,000. I think where population growth fits in in that picture is that a decline of 25,000 says something less about the or says something different about the labor market. When population is basically flat, which is what the LFS recorded, like it increased population was up like 5000 a year earlier. Population was up 56,000 in one month. And so minus 25k on the job side, when the population is growing quickly, that is a really bad sign for the labor market because it means that the share of the population with a job like like, which is ultimately a key indicator of how Canadians are feeling in the labor market is getting worse. Now come to January 2026, we see an employment decline, not a good report. But with population growth almost flat in the month, that means that the overall labor market held relatively steady. Maybe a slight weakening from the headline job numbers. But if we look for instance at the working age employment rate, that's the share of 15 to 64 year olds with a job, it was basically flat in January. So population growth, it's going to be both impacting sort of the economy overall, employers finding workers, but it also impacts how we evaluate these job numbers when they come out every month. I'll just mention one thing that also stood out. Hitting on the key themes for 2026 in the January employment numbers that while the job numbers weren't, they were soft, not, not terrible, but definitely soft. It was also beneath the surface. This was a trade war report. We saw manufacturing jobs, particularly in Ontario, take a hit in this month. And just a sign that this trend is not going away, we've got major uncertainty on the horizon for the future of the Canada U.S. trading arrangement. And with Ontario, you know, a key manufacturing hub and a key part of the North American supply chain system, a weak month like we saw in January is a reminder that this is something that's going to be an important trend in 2026 as well.