Canada’s Jobs Report – And What It Means for Rate Hike Expectations
Statistics Canada released April’s labour market data this morning, and it changes the rate conversation in a meaningful way.
Canada shed 17,700 jobs in April. The national unemployment rate climbed to 6.9%, a six-month high. Economists had expected a gain of 10,000 jobs. The miss was significant, and the details made it worse: full-time positions have now fallen by 111,000 since the start of the year, and construction shed 15,700 jobs in April alone.
The response from major bank economists was immediate and pointed. BMO’s chief economist graded the report 26.4 out of 100 and said it was “incredibly tough to see the logic behind the market’s pricing of more than one rate hike later this year, when the economy is struggling mightily to take even one step forward.” CIBC’s economists said the weak labour market undermines the case for the Bank of Canada to tighten policy in response to oil prices, and continue to forecast no rate changes throughout 2026. TD’s economists noted that slack in the labour market limits firms’ ability to pass oil price increases on to consumers – a key check on the secondary inflation risk the Bank of Canada has been watching.
Last week, bond yields spiked after Governor Macklem raised the conditional possibility of consecutive rate increases if oil-driven inflation broadened into the wider economy. This morning’s jobs data significantly reduces the likelihood of that scenario. Rate hikes require an economy running hot. This one is not. The next Bank of Canada decision is June 10.
What this means for your mortgage: variable rate holders are not looking at upward payment pressure in the near term. If oil prices ease and inflation stays contained, a rate cut is back on the table for later this year. Bond yields have settled to 3.172% after last week’s spike, which means fixed rates are stable. For anyone making a renewal or refinance decision, the picture is clearer today than it was a week ago.
GTA Spring Market – Sales Up, Prices Down, and the 30-Year Amortization in Practice
TRREB released its April 2026 numbers this week. Sales came in at 5,946 – a 7% increase year-over-year and the second consecutive month of annual gains. Average selling price landed at $1,051,969, down 4.9% from the same month last year. New listings fell 9.3% to 17,097, and total active listings declined 6.4% to 25,110. The market is tightening modestly, though it remains well below historical transaction norms.
The segments with the most activity are starter homes in the $1.1 million to $1.8 million range in the downtown core, and larger condos suited to end-users rather than investors. Sub-500 square foot units remain deeply oversupplied.
One development worth noting for buyers: the expanded 30-year amortization for insured mortgages is being widely adopted – not primarily as a qualifying tool, but as a cash flow management strategy. Buyers who qualify under the standard 25-year term are choosing the longer amortization to reduce their monthly payment obligation, while retaining the ability to use prepayment privileges to pay down faster when cash flow allows.
What this means for your mortgage: a 30-year amortization gives you a lower required monthly payment and more flexibility. The trade-off is more total interest paid over the life of the mortgage if you do not use your prepayment options. Whether that trade-off makes sense depends on your income stability, your other financial priorities, and how aggressively you plan to pay it down. It is worth running both scenarios before you decide.
Toronto’s Condo Market – Q1 Data Confirms the Depth of the Oversupply
New data from Urbanation shows the extent of the pressure in Toronto’s new condo market. The Greater Toronto Hamilton Area recorded just 246 new condo sales in Q1 2026 – a 35-year low and a 52% drop from the same period last year. There were zero new project launches during the quarter, the first time that has happened in at least three decades.
The appraisal gap problem continues. Buyers who signed preconstruction agreements at peak pricing are arriving at closing to find the unit is now worth significantly less than they agreed to pay. When the appraised value falls below the purchase price, the lender will only finance against the lower number. The buyer is responsible for covering the difference.
What this means for your mortgage: if you are a preconstruction condo buyer and your closing date is approaching, this is the single most important conversation to have before you get to the lawyer’s table. The appraisal gap is not a hypothetical – it is happening in the current market. You need to know what your unit is likely to appraise for, what your lender will finance against, and whether you have the cash to cover a gap if one exists. That conversation needs to happen now, not at closing.
Variable rate holders – prime holds at 4.45%, and this morning’s jobs data makes upward pressure on that number significantly less likely. Fixed rate holders – bond yields have settled after last week’s spike. If you are renewing or refinancing, the environment is clearer today than it has been in a while. And if you have a preconstruction condo closing coming up, reach out before you need to.
Connect with me at 249-480-1249 or visit HumberBayMortgages.ca. Have a great weekend.
SOURCES:
Statistics Canada Labour Force Survey, April 2026
Toronto Regional Real Estate Board (TRREB) April 2026 Market Report
Urbanation Q1 2026 New Condo Market Report
BMO Capital Markets, CIBC Economics, TD Economics via Canadian Mortgage Professional, May 8 2026
Bank of Canada Policy Rate, April 29 2026
Canada 5-Year Government Bond Yield, May 7 2026
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