Canada's Industrial Heartland in Crisis: Soaring Unemployment Rates in Southwestern Ontario

Canada’s unemployment rate is on the rise, with southwestern Ontario cities like Windsor, Peterborough, Oshawa, and Toronto experiencing some of the highest rates in the country. This surge is largely attributed to Donald Trump’s tariff war, which has severely impacted trade-reliant sectors and regions.

A man looks over at a foggy Detroit skyline from Windsor, Ont., a city that has seen its jobless rate soar amid Donald Trump's trade war.

According to Royal Bank of Canada economist Rachel Battaglia, sectors such as manufacturing, resource industries, transportation, and warehousing have seen the most significant job losses. Ontario, which houses a large portion of Canada’s manufacturing workforce, accounts for 60% of the unemployment rate increase over the past year.

RBC report highlights the impact of trade volatility on Canada's job market.

The Financial Accountability Office of Ontario predicts that U.S. tariffs could result in 68,100 fewer jobs this year and 119,200 fewer by 2026, raising the province’s unemployment rate to an average of 7.7% over the next four years. Cities like Windsor, Guelph, Brantford, Kitchener-Cambridge-Waterloo, and London are expected to be hit the hardest due to their export-focused manufacturing.

While Quebec and British Columbia have also contributed to the rising unemployment rate, Atlantic Canada has shown remarkable resilience, with Nova Scotia and New Brunswick’s jobless rates falling below the national average in the second quarter.

The trade war’s impact is also evident in the demographics of labor market weakness, with workers aged 45 and older accounting for nearly 40% of the unemployment rate gains over the past year. Additionally, the Canadian-born workforce is facing more challenges than newcomers, driving about 60% of the unemployment rate increase.