Ontario’s unemployment rate has climbed to 7.8 per cent, the highest level since 2012 outside of the pandemic years, as U.S. tariffs begin to erode jobs across the province. The Financial Accountability Office of Ontario (FAO) reports that 38,000 jobs were lost in the second quarter of 2025, marking the first quarterly decline in employment since late 2022.
The manufacturing sector has taken the sharpest blow, shedding 29,400 positions between April and June, with Windsor emerging as the hardest-hit city. Windsor’s unemployment rate has soared to 11.2 per cent — the highest among all Canadian metropolitan areas — reflecting both the impact of tariffs and broader industrial weakness. Other communities facing steep losses include Kingston, Guelph, Oshawa, and Ottawa-Gatineau.
The FAO report shows that full-time work dropped by 56,600 positions, while part-time jobs rose by 18,700. Other sectors experiencing major losses include business and building services, information and recreation, transportation, warehousing, and agriculture. At the same time, pockets of growth were recorded in finance, insurance and real estate, wholesale and retail trade, and professional and technical services.
Despite the shrinking job market, average hourly wages have continued to climb, rising 4.3 per cent year-over-year to $37.31. But the rise in pay has done little to offset the financial strain for thousands of newly unemployed Ontarians. Across Canada, Employment Insurance claims are climbing, with 541,430 people receiving benefits in June — up more than 18,000 from May and nearly 13 per cent higher than a year earlier. Ontario accounted for a large share of that increase, adding 7,900 new EI recipients in June alone.
The FAO warns that Ontario’s labour market remains vulnerable, with tariffs weighing heavily on industries that have long anchored regional economies. As the province battles its ninth consecutive quarter of rising unemployment, the pressure is mounting on policymakers to find ways to shield workers from further fallout.