![\"job-market-0526-ph\"](\"https:\/\/www.europesays.com\/canada\/wp-content\/uploads\/2026\/05\/18b4b315bcce695d47e4cc8299320ffa.jpeg\")
Canada’s job market is changing as the population ages and businesses hold back amid economic uncertainty. (Credit: Laura Pedersen\/National Post) <\/p>\n Canada’s job market is changing as the population ages and businesses hold back amid economic uncertainty. (Credit: Laura Pedersen\/National Post) <\/p>\n
Canada\u2019s labour market<\/a> is changing, but it may take a while for the central bank to identify whether the changes are temporary and cyclical or persistent and structural, said Bank of Canada<\/a> external deputy governor Nicolas Vincent in a speech in Montreal Tuesday.<\/p>\n Addressing a crowd at the Centre interuniversitaire de recherche en analyse des organisations (CIRANO), Vincent said Canada\u2019s labour market has slowed recently and there is mild excess supply.<\/p>\n Canada\u2019s aging population combined with a \u201clow-hire, low-fire\u201d environment means the labour market is less dynamic than it used to be, he said. Workers aren\u2019t moving from less productive sectors to more productive ones as much, which slows down Canada\u2019s productivity, income growth and collective purchasing power.<\/p>\n A sharp rise in the interest rates in 2022 and 2023, along with economic uncertainty caused by United States tariffs and the conflict in the Middle East, has also led businesses to scale back hiring instead of laying off workers, he added. The lower turnover also means workers are less likely to change jobs.<\/p>\n Vincent noted that while monetary policy can help the economy transition during periods of restructuring, the central bank needs to understand the nature of these changes to the labour market before making any decisions. Changes to the key interest rate<\/a> cannot compensate for lower supply caused by factors such as trade friction and population aging, and it could create inflationary pressures<\/a> if the central bank tries to stimulate demand when the issue is more structural in nature.<\/p>\n \u201cTraditionally, central banks respond to cyclical ups and downs in the economy by raising or lowering the policy interest rate\u2026. However, with structural change, our options are more complicated,\u201d he said.<\/p>\n \u201cOur goal remains to ensure inflation is low, stable and predictable.\u201d<\/p>\n Vincent\u2019s speech comes as long-term unemployment<\/a> in Canada rose significantly above pre-pandemic highs. According to data from Statistics Canada and the Bank of Canada, 22.5 per cent of unemployed people have been out of work for 27 weeks or more as of April 2026. In comparison, the pre-COVID-19 pandemic average was 17.1 per cent from 2017 to 2019.<\/p>\n Vincent said that, from a structural perspective, there is a key gap between the skills and experience workers have and the ones employers want. Over the past two years, job postings have required more experience than before, while the share of people who have never worked has grown.<\/p>\n