Canada Posts Surprise Job Gains, But Public Sector Faces Looming Cuts Under Carney Government

(Image source: Mark Carney x)

Canada’s economy posted a stronger-than-expected performance in June, with new figures from Statistics Canada showing 83,000 jobs added across the country and the national unemployment rate ticking down to 6.9%, from 7% in May. The report marks the first decline in unemployment since January and far outpaced economists’ expectations, who had anticipated the jobless rate would rise or hold steady.

Most of the job gains came from wholesale and retail trade, healthcare, and social services, though the majority were part-time positions.

Despite the positive national numbers, certain regions are still feeling the squeeze. In Windsor, Ontario, Canada’s auto manufacturing hub, unemployment has climbed to 11.2%, up 2.1 percentage points since January, largely due to the impact of new U.S. tariffs under Donald Trump’s trade agenda.

Economists suggest that increased domestic spending may be helping Canada weather the storm of this intensifying trade war. Canadians are choosing to spend locally, and that’s giving the economy a surprising lift.

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Public Service Cuts on the Horizon

While job numbers are up this month, tens of thousands of public sector workers could soon be facing the opposite fate.

During the federal election campaign, Prime Minister Mark Carney promised to find $13 billion in public service savings over three years. His plan focused on capping workforce growth, leveraging AI, and boosting operational efficiency — not direct job cuts.

But internal government communications now show a more aggressive timeline emerging.

In a letter sent last week to federal departments, Finance Minister François-Philippe Champagne instructed ministries to find savings of:

• 7.5% in 2026–27

• +2.5% by 2027–28

• +5% by 2028–29

  =15%

The cumulative effect: $25 billion in savings, nearly double what was originally promised.

Core programs like dental care, pharmacare, childcare, and social supports will be protected. However, Canada’s Parliamentary Budget Officer warned in a statement to the Toronto Star this week that meeting these targets though attrition and hiring freezes won’t be enough, layoffs —“will be almost unavoidable.”

He also suggested that cuts may extend beyond internal staffing to include reductions in grants, subsidies, and external program funding, raising concerns from unions and civil society groups.

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Canada’s Air Force Breaks Barriers as Jamie Speiser-Blanchet Takes Command

Lt.-Gen. Jamie Speiser-Blanchet made history this week as the first woman to lead the Royal Canadian Air Force, assuming command during a pivotal moment for Canada’s military. A seasoned Griffon helicopter pilot and veteran of peacekeeping missions in Haiti and Bosnia, Speiser-Blanchet brings decades of experience, including recent service as deputy commander of the air force. She steps into the role as the RCAF faces critical challenges: a personnel shortage, an evolving global security landscape, and the integration of new F-35 fighter jets. Originally from Chicoutimi, Quebec, she now becomes the 22nd commander of the RCAF, overseeing over 15,000 personnel and more than 250 aircraft.