Ontario saw the largest unemployment rate increase in the country for the second year running, according to its financial watchdog, which also found that new jobs are still being created in the province.

A new report from the Financial Accountability Office of Ontario found job creation slowed in 2025, with 80,900 jobs created last year.

That figure is a drop from the year before and the slowest pace of job creation since 2015, excluding the COVID-19 pandemic.

“Job creation did not keep pace with the increase in the number of people looking for work, causing Ontario’s unemployment rate to increase to 7.7 per cent in 2025, up from 7.0 per cent in 2024 and the highest since 2012 excluding the pandemic,” the report found.

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The FAO found that unemployment increased in every part of the province except for St. Catharines-Niagara. Guelph saw the sharpest decline in employment, with a 5.3 per cent drop.

“This report is one more clear sign — from an independent office — that the plans of the grandstanding Doug Ford Conservative government are failing to protect the people of Ontario,” Ontario Liberal MPP Stephanie Bowman said in a statement.

“Unemployment is rising faster in Ontario than it is in every other province in the country, and it was getting worse long before U.S. tariffs. Ontario accounts for 45 per cent of Canada’s unemployed workers, even though the province is home to only 39 per cent of Canada’s labour force.”

The FAO found that eight of Ontario’s 16 major industries saw an increase in employment; the most gains came in sectors with below-average wages.

Job losses came in sectors most impacted by tariffs like manufacturing, agriculture and warehousing.

A spokesperson for the Ministry of Economic Development, Job Creation and Trade pointed to the money the government has said it will spend on tariff relief.

“President [Donald] Trump’s tariffs and tariff threats continue to disrupt supply chains and pose unprecedented challenges for workers and businesses on both sides of the border,” they wrote in a statement.

“We will continue to ensure support is there for businesses and workers facing tariff-related disruptions, while creating the conditions to make Ontario the most competitive place in the G7 to invest, create jobs, and do business.”

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