U.S. tariffs, AI set to dampen B.C.’s 2026 labour market: experts

Tariffs, AI set to hit jobs

Photo: Chung Chow, BIV.

Labour economist Roslyn Kunin said in the current uncertain economy, companies are increasingly seeking contractors or part-time staff rather than permanent employees.

Economic uncertainty stemming from U.S. tariffs and the growing adoption of AI is expected to weigh on B.C.’s labour market in 2026, as many companies remain cautious about hiring permanent staff, according to labour experts.

However, employment growth is still likely in certain areas, with major infrastructure projects and sectors including biotech and quantum computing receiving significant investment.

“It's going to be a very challenging labour market, both for employers and for employees,” said Roslyn Kunin, an economist and principal of Vancouver-based Roslyn Kunin & Associates, a consulting firm specializing in labour market analysis and forecasting.

“There's an awful lot of uncertainty. … When businesses don't know what's going to happen, they avoid making long-term commitments. And hiring people is a long-term commitment.”

B.C. recorded an unemployment rate of 6.4 per cent in September 2025, up 14.3 per cent from 2024. In Budget 2025 released in March, the province projected that the economic impact of U.S. tariffs would peak in mid-2026, with B.C.’s unemployment rate rising further to 6.7 per cent that year.

Caution over hiring was also observed by Stephanie Hollingshead, CEO of the TAP Network, a human resources association for B.C.’s tech sector.

She described the current geopolitical environment and its impact on the local economy as “the elephant in the room” for B.C. businesses, shaping the state of the tech job market in 2026.

“We're seeing companies budgeting for fairly conservative salary increases in 2026, between three and four per cent [on average],” Hollingshead said, referencing TAP’s 2025 national survey.

Recent layoffs at some companies have also increased the pool of job seekers. Hollingshead cited a senior role at a large tech company that recently received 300 applications in five days.

“There's a lot of talent on the market right now–2026 looks like it will still favour employers,” she said. “[Although] it's still hard to find those more specialized skills.”

AI adoption is further affecting junior roles, as some companies replace entry-level positions with technology, sparking debate over whether this could compromise the pipeline of mid- to senior-level talent, Hollingshead added.

Kunin said AI’s impact goes beyond the tech sector, affecting white-collar roles across industries—from higher-level clerical positions to middle management. With the supply of such jobs in B.C. already limited, competition is intensifying.

“Far too many young people [want to] go into these fields,” she said, noting that jobs for those with general degrees and no specialized skills “are disappearing” in B.C.

Certain sectors still driving demand

Meanwhile, major projects under construction or planned in B.C., along with strong investment in certain sectors and companies’ demand for non-permanent staff, are expected to drive employment growth.

Ashleigh Brown, Vancouver-based group managing director for executive search at human resource consulting firm Robert Half, said 2026 is off to a strong start for her team.

“There's been a lot of movement,” Brown said.

She said much of the hiring is in positions linked to big infrastructure or maintenance projects, requiring structural, mechanical and electrical engineering talent.

This includes two nation-building projects announced last fall—LNG Canada Phase 2 and the Red Chris Mine, and two federal fast-track project—the North Coast Transmission Line and the Ksi Lisims LNG project.

Demand has also grown for positions in AI, cost control and data-driven management, as companies navigate new technologies and cost pressure amid tariff hikes, Brown added.

“You need to be almost like a tripod now—you need to have finance, operations and data analytics, and that blends into the ability to use AI of some form…for anyone looking at a director level and above,” Brown said.

Hiring is also expected to rise in sectors with major investment, according to Hollingshead. These include priority areas such as AI and quantum computing, life sciences and agri-tech, which are targeted under B.C.’s Look West strategy to help double tech employment to 400,000 by 2035.

Last year, several B.C. companies announced major capital injections, including nearly $700 million for Clio [Themis Solutions Inc.], Photonics Inc. ($180 million), Aspect Biosystems Inc. ($180 million), Stemcell Technologies Inc ($49.9 million), 4AG Robotics ($40 million) and pH7 Technologies ($25.6 million).

“We're seeing investment and growth in those areas, but more broadly, not so much,” said Hollingshead.

Trade, technicians, skilled professionals and lower-wage service roles are always in demand in B.C., said Kunin, and in the current uncertain economy, companies are increasingly seeking contractors or part-time staff rather than permanent employees.

Statistics Canada data show that part-time employment in Canada increased 2.7 per cent between September and November 2025, compared with 0.5 per cent for full-time employment.

“Employers, companies and so on still need an awful lot of things done, but they're very reluctant to hire people and put them on the payroll,” said Kunin.

“So if people are willing to work in a consulting contracting mode, they can probably find a lot more work than they can find jobs.”