Kelowna's unemployment rate hits three-year high in wake of US tariffs

Photo: The Canadian Press

Metro Kelowna's jobless rate jumped to 6.9% in April.

A case could be made that U.S. tariffs are hitting the Central Okanagan hard.

Metro Kelowna’s unemployment rate skyrocketed in April, leaping more than a percentage point from March and landing at 6.9%—the region’s highest jobless rate since February 2022, when it checked in at 7.1%.

According to Statistics Canada’s Labour Force Survey released on Friday, Metro Kelowna lost 2,300 jobs last month and is down more than 13,000 since January.

A Canadian Chamber of Commerce report in February ranked Kelowna as the 28th most vulnerable Canadian city to U.S. tariffs in a survey of the nation’s 41 largest centres. The report showed 296 Kelowna companies export $385 million worth of goods to the U.S. every year. Shipments of goods from the Kelowna area across the Canada-U.S. border account for almost 3% of the Central Okanagan’s gross domestic product.

U.S. President Donald Trump earlier this year slapped 25% tariffs on most products imported from Canada but has since removed the tax on goods that are compliant with the United States-Mexico-Canada trade agreement.

The unemployment rate in Windsor, Ont., which is a big auto production city, jumped 1.4% last month, which is not that much more than Kelowna’s increase.

The Canadian economy actually added 7,400 jobs last month, but that was primarily due to temporary federal election workers.

Coincidentally, the national unemployment rate last month was also 6.9%, which it also hit in November. Before then, the jobless rate had not hit that level since January 2017—outside of the pandemic years.

Canada’s manufacturing industry led job losses in April, shedding 31,000 positions, with the bulk of the impact in Ontario.

Statistics Canada does not publish industry specific numbers for cities, but in B.C. there was an increase of 1,800 manufacturing jobs in April, and the province’s unemployment rate of 6.2% is one of the lowest in the country. B.C. added 6,000 jobs from March to April.

The Thompson-Okanagan unemployment rate jumped for the fifth straight month but at 6.4% is below the national and Kelowna marks.

BMO chief economist Doug Porter said in a note to clients Friday that the details of the April jobs report are worthy of a failing grade for the labour market, with the trade war serving as a clear source of weakness.

“This is the first major data reading for April, and it shows that tariffs are already taking a material bite out of the economy,” he said.

— with files from The Canadian Press