Bank of Canada Deputy Governor Nicolas Vincent said Canada's labour market is being shaped by both cyclical weakness and deeper structural change.
The speech placed the labour market in the context of recent economic shocks: the pandemic, a sharp rise in inflation, and higher interest rates used to bring inflation back toward the Bank's 2% target.
Job growth has slowed sharply. The Bank said the economy added only about 6,000 jobs a month on average since early 2025, compared with almost 34,000 a month in 2024.
The speech also said unemployed workers have found it much harder to find a job since 2022, with the ability to find work close to its lowest point in 30 years.
The speech noted that central banks normally respond to cyclical ups and downs by raising or lowering the policy interest rate, while structural changes are harder for monetary policy to offset directly.
The Bank drew a distinction between cyclical changes, which monetary policy can respond to, and structural changes, which are driven by longer-term forces in the economy.
The tax and fiscal relevance comes through employment income, household demand, benefit eligibility, payroll conditions, and government revenue. A slower labour market can affect both taxpayers and the public finances that depend on income and consumption.