Quebec labour market could soon favour workers over employers: review

A welder works at a factory in Sainte-Claire, Quebec, Canada. (Photographer: Renaud Philippe/Bloomberg)

Between 2026 and 2029, Quebec’s working-age population is set to decline for the first time in over a century, potentially shifting the balance of power in favour of workers over employers.

This reversal in the labour market is primarily due to lower permanent immigration thresholds and fewer non-permanent residents, according to the Institut du Québec’s 2025 employment review, A New Balance of Power.

In addition to these two factors is the question of the province’s overall aging population.

“Projections from the Institut de la statistique du Québec show that we will see a decline in the working-age population, those aged 20 to 64, over the next three years,” said Emna Braham, President and CEO of the Institut du Québec. “This is the first time there has been a decline in over a century.”

That means there could soon be a shortage of candidates for jobs.

Between 2023 and 2025, Braham explains, Quebec saw a downturn in the labour market, despite rising interest rates and a surge in immigration.

“We had a labour market that was perhaps slightly more advantageous to employers than to employees,” she said.

“We can see that in 2025, even in the midst of a trade war, things stabilized. Starting in 2026, we can see a reversal of the situation, with a return to a labour shortage, more jobs available than candidates, and a market that may be more favourable to employees.”

Tariffs

The imposition of U.S. tariffs and repeated threats by President Donald Trump ultimately caused more fear than harm to employment in Quebec, the Institute notes.

“In early 2025, concern was at its peak, with a lot of threats of tariffs from the U.S.,” said Braham. “We were particularly worried about our manufacturing sector, which is our main exporter to the United States. We feared job losses in several regions and companies. In the end, what we saw was that the disaster did not happen.”

In the end, the manufacturing sector fared relatively well, growing by 0.4 per cent between December 2024 and December 2025.

Other sectors were hit harder, including the forestry and film industries, which are highly dependent on the United States.

They saw a 5.1 per cent decline between 2024 and 2025.

Wages

Wages, according to Braham, grew faster than inflation between December 2024 and December 2025, especially in the public sector, where they rose by 7.5 per cent.

“In the private sector, we are still above inflation, with 3.6 per cent wage growth, but it is really the public sector that drove that increase,” she said.

Braham points out that the public sector was in need of a catch-up.

“After growing slower than inflation until the end of 2024, wages in the public sector rose sharply in 2025 with the ratification of new collective agreements,” said Braham.

This report by The Canadian Press was first published in French on Feb. 19.