OTTAWA, Canada (AFP) — Employment in Canada fell for the first time in three years in March, the national statistical agency said Friday, as uncertainty over United States (US) tariffs led businesses to cut staff and stall hiring.

Canada shed some 33,000 net jobs in the month, pushing the unemployment rate up 0.1 percentage point to 6.7 per cent, according to Statistics Canada.

“I know that a great many Canadians are worried,” Prime Minister and Liberal leader Mark Carney said Friday about the latest tariff announcements.

“The weeks and months to come will not be easy, but we will not abandon you. We will fight against these tariffs,” Carney said at a campaign event in Montreal ahead of national elections.

The March jobs decline was driven by losses among full-time workers, who had seen a “strong upward trend in the second half of 2024,” Statistics Canada said in a statement.

These losses were mostly in the private sector, particularly wholesale and retail, as well as information, culture and recreation.

Canada was largely spared from the sweeping global tariffs US President Donald Trump announced Wednesday, as Washington granted an exemption to goods compliant with the US-Canada-Mexico free trade agreement, which covers most products.

But on Thursday the two neighbours slapped tit-for-tat 25 per cent tariffs on some vehicles crossing the border, coming after Washington imposed levies on Canadian steel and aluminium.

Washington last month also announced but then paused tariffs on most Canadian goods and energy imports into the United States, saying that was in response to illegal immigration and the deadly drug fentanyl coming into the United States.

Economists had expected the Canadian job market to start to slow in March as companies held back on investments and hiring, which surged in December 2024 and January, adding 211,000 net new jobs, before flat lining in February.

But they were surprised by the extent of the losses, with CIBC Economics analyst Andrew Grantham saying the consensus forecast had pointed to a gain of 10,000 net new jobs.

“The wheels may be starting to fall off the Canadian labour market,” he said in a research note.

However, he added, staffing levels “in areas expected to be the first (and) hardest hit by US tariffs were mixed, with transport and warehousing posting an increase while manufacturing employment fell modestly”.

TD Bank Senior Economist James Orlando commented that “businesses and consumers are naturally hesitant in the face of heightened political uncertainty.”

“Today’s report reflects this,” he said, adding that Canadians who lose their jobs are also taking longer to find work.