Economic and Social Reports, October 2025

There are four new articles available in today's release of Economic and Social Reports.

Recent developments in the Canadian economy

The article "Recent developments in the Canadian economy: Fall 2025" provides an integrated summary of recent changes in output, consumer prices, employment and household finances. It highlights movements in the economic data during the first half of 2025 and the summer months. The article examines how economic conditions have changed as trade tensions between Canada and the United States continue to evolve.

After supporting economic growth as trade tensions escalated in the first quarter, exports decreased in the second quarter. At the same time, gross domestic product fell 0.4%, marking its largest quarterly contraction in nine years, outside of the COVID-19 pandemic period. Imports and business outlays on machinery and equipment also decreased in the second quarter, as US tariffs and uncertainty weighed on economic activity. Much of the decrease in economy-wide output in the second quarter reflected lower activity among manufacturers and wholesalers, as US tariffs on Canadian steel and aluminum and automobiles were in effect.

Employment growth stalled in the first half of 2025, as uncertainty weighed on hiring intentions, while layoff rates were similar to levels reported in 2024. Nationally, there was no net employment gain from January to August 2025 and no net increase in payroll employment from January to June.

Headline consumer inflation fell to below 2% from April to August due in large part to the removal of the consumer carbon levy. Excluding energy prices, annual consumer price growth averaged 2.7% during this five-month period.

Difference in flows of postsecondary students between Canada and the United States narrows

Cross-border education serves as both a driver of innovation and a measure of talent flows in North America. The study, "Global classrooms: Changing patterns in postsecondary student flows between Canada and the United States," compares recent trends in the number of students at the bachelor's and graduate levels from Canada to the United States and from the United States to Canada.

The number of study permit holders with US citizenship intending to study at the undergraduate or graduate level in Canada gradually increased from about 5,000 in 2000 to 11,000 in 2019, before declining to around 10,000 in the early 2020s. In comparison, the annual number of Canadian undergraduate and graduate students enrolled in the United States has fluctuated from 21,500 to 27,400 since the early 2000s.

About 65% of Canadian students returned to Canada after studying in the United States around 2021, compared with about 50% a decade earlier. These trends suggest that Canada is becoming a more attractive destination for US students, while more Canadian students in the United States are returning home.

Employment outcomes of workers in industries dependent on United States demand for Canadian exports

Trade tensions between Canada and the United States, which began in early 2025, have raised concerns about workers in industries that depend on US demand for Canadian exports. Using data from the Longitudinal Worker File, the study "The impact of layoffs on labour market outcomes of workers in industries dependent on United States demand for Canadian exports" found that around 70% of workers who were laid off from these industries over the 2013-to-2016 period found paid employment in the year following job loss. About 69% of re-employed men and 76% of re-employed women had transitioned to other industries.

Workers who were laid off from industries dependent on US demand for Canadian exports saw their earnings decrease by 42% for men and 50% for women in the year following job loss compared with two years prior to the layoff. This compares with relative earning losses of 32% for men and 37% for women who were laid off from other industries (excluding public administration, educational services, and health care and social assistance).

It is too early to know how many jobs may be lost as a result of increased tariffs and how affected workers might adapt. However, looking back at how these workers have historically fared following job loss could inform future strategies.

Immigrant women in nursing

The study, "Skill underutilization among immigrant women with a nursing education," shows that many internationally educated nurses (IENs) are underutilized workers.

According to 2021 Census data, about 50% of immigrant women IENs from the Korean and Japanese population groups and 53% of those from the Chinese population group had a health occupation. Thus, half of these IENs had jobs that made no use of their nursing education. IENs from other population groups fared better; the proportion of IENs with a health occupation ranged from 62% (Latin American population group) to 83% (Black population group). Even when employed in a health occupation, many IENs were employed in jobs that underutilized their skills. Depending on the population group, 35% to 62% of IENs had a job that matched their education.

Improvement in skill utilization is important because immigrant women IENs who land low-skill jobs can experience deskilling overtime. Moreover, their integration into the nursing workforce could potentially ease nursing shortages.