41.5 Million People. 21 Million Workers. Where They Work Shapes How They Borrow.
The Bank of Canada's mortgage risk model puts it plainly: "The unemployment rate is the most important variable in determining the likely path of the mortgage arrears rate."
Where Canadians work -- which industry, which sector, which province -- determines how stable their income is, how they qualify for a mortgage, and how likely they are to miss a payment. This page connects the labour force data to the mortgage data, from national employment all the way down to arrears by province.
All data sourced from Statistics Canada, Bank of Canada, CMHC, and CBA. Employment figures include both full-time and part-time workers unless otherwise noted. Most recent data: January 2026.
Canada's Labour Force at a Glance
Of Canada's 41.5 million people, 26.8 million are working age (15-64). Of those, 21.1 million are employed -- 17.3 million full-time and 3.8 million part-time. Another 12.4 million adults (15+) are not in the labour force at all: students, retirees, caregivers, and others.
Full-time work (30+ hours/week) accounts for 82% of total employment; part-time accounts for 18%. The participation rate of 65.0% means roughly 1 in 3 Canadians aged 15+ is not looking for work. The unemployment rate of 6.5% applies only to those actively searching.
Where 21 Million Canadians Work
Canada is a services economy. 80% of all jobs are in services-producing industries, with just 20% in goods-producing sectors like construction, manufacturing, and resource extraction.
The three largest employers are wholesale and retail trade (3.0M), health care and social assistance (2.97M), and professional, scientific, and technical services (1.99M). Together, these three industries employ more than 9 million Canadians -- nearly half the workforce.
At the other end, agriculture (242K), utilities (174K), and forestry, mining, and oil and gas (344K) are small by headcount but outsized in economic impact -- and in regional mortgage risk, as we will see.
1 in 5 Workers Is Government
Public administration alone employs 1.245 million people. But that understates the true public sector. When you include teachers, public hospital workers, Crown corporation employees, and government-funded agency staff, the total public sector accounts for 21.5% of all employment -- roughly 4.5 million workers.
That share has been growing. In 2015, the public sector was 19.7% of the workforce. Over the past decade it added 950,000 net new jobs -- nearly 1 in 3 of all jobs created in Canada during that period. Public sector employment grew at 2.7% annually, versus 1.7% for the private sector.
The federal civil service grew the fastest: from 257,034 employees in 2015 to 367,772 by early 2024, a 43% increase. Over 27,000 federal employees now earn more than $150,000 annually. That said, recent cuts have begun -- federal public administration declined by 16,500 positions (-4.3%) in late 2025.
It Varies Dramatically by Province
Atlantic Canada has nearly 30% of its workforce in government jobs. Alberta has just 18%. This regional variation directly affects borrower profiles -- in provinces with higher government employment, a larger share of mortgage applicants will have stable, documented, pensioned income.
The Employment-Mortgage Connection
This is where the labour force data meets the mortgage data. The chart below plots Canada's unemployment rate against the national mortgage arrears rate (90+ days past due) from 2015 to 2025.
The correlation is clear but not instant -- arrears typically lag unemployment by 6-12 months. People exhaust savings, draw on credit, and miss other payments before they miss a mortgage payment. Mortgages are the last bill to go unpaid.
The 2020 exception stands out. Unemployment spiked to 9.7% but arrears barely rose to 0.27%. Government payment deferrals and CERB income support intervened. The Bank of Canada estimated that without those programs, arrears would have reached 1.3% -- nearly 5x what actually occurred.
Arrears Are Rising -- Fast
After hitting a record low of 0.14% in mid-2022, national mortgage arrears have climbed 71% to 0.24% by Q3 2025. That is the fastest rate of increase since the early 1990s.
As of November 2025, approximately 12,380 mortgages were 90+ days in arrears at chartered banks -- the highest count since August 2020. The rate of increase (20.3% CAGR from the 2022 low) actually exceeds the 1990s pace (18.4% CAGR), though the absolute level remains far below historical peaks: the early 1990s hit 0.65%, the 2008 crisis reached 0.45%, and the early 1980s recession peaked at 1.0%.
The Provincial Picture
Arrears are not rising equally everywhere. Provinces with resource-dependent economies have historically run higher, but Ontario is the new outlier -- its arrears rate surpassed the national average for the first time since 2012.
The Alberta precedent: During the 2014-2016 oil price crash, Alberta lost roughly 40,500 oil and gas jobs (1 in 4 positions). Alberta mortgage arrears rose 52% year-over-year to 0.41%. Consumer insolvencies surged 32.5%. It took 2-3 years for the stress to fully clear the system.
Ontario's current surge looks different -- not a single-industry collapse, but the combination of pandemic-era over-leveraging and higher rates hitting a broadly employed population. Toronto arrears surged 60% year-over-year to 0.24%, the highest since Q3 2012.
The Debt Burden
Two charts tell the debt story. First, the debt service ratio -- how much of household disposable income goes to debt payments (interest plus principal). Second, the debt-to-income ratio -- total household debt relative to disposable income.
The DSR peaked at 15.17% in Q1 2023 -- the highest since 1990 -- as rate hikes pushed up mortgage costs. It has since declined to 14.64% as the Bank of Canada cut rates, but remains well above the pre-pandemic norm of ~13.5-14.0%. One in three new mortgages now has a debt service ratio above 25%, up from one in six in 2019.
Canadian households owe $1.77 for every $1.00 of disposable income. In 1980, that figure was $0.66. Mortgages make up approximately 75% of all household debt, and total household credit market debt now exceeds $3.2 trillion.
The debt-to-income ratio peaked at 190.8% in Q4 2018, improved during COVID (income supports boosted disposable income), and has been ticking back up since mid-2024 as rate cuts spur new borrowing.
The Self-Employed Gap
Perhaps the starkest disconnect in the data: 13.2% of Canadian workers are self-employed (~2.8 million people), but they represent only 3% of CMHC-insured mortgage volume.
This 10-point gap exists because self-employed borrowers often cannot produce the T4 income documentation that A-lenders require. Their real income may be strong, but reported taxable income -- after business deductions -- frequently fails standard GDS/TDS thresholds. These borrowers are systematically pushed toward B-lenders and private lenders, where rates are higher and delinquency rates run 5-10x those of chartered banks.
Canada has 1.1 million employer businesses, 98.2% of which are small businesses (1-99 employees). SMEs employ 63.6% of the private sector workforce and contribute 47.8% of GDP. The people running and working in these businesses are disproportionately underserved by the insured mortgage market.
What Brokers Should Know
Employment type is the single best predictor of mortgage performance. Here is how it maps to lender placement:
Lowest risk -- A-lender candidates:
- Public sector workers (4.5M, 21.5% of workforce): Stable income, pension benefits, documented pay. In Atlantic Canada, nearly 30% of applicants will be government-employed.
- Health care and education (4.55M combined): Largely government-funded and recession-resistant. These sectors added jobs even during COVID.
Moderate risk -- standard documentation:
- Professional services (1.99M) and finance (1.49M): Generally strong income but more variable. Watch for contract and commission-based roles.
Higher cyclical risk -- consider income history:
- Construction (1.64M) and accommodation and food (1.18M): The most cyclically sensitive industries. The Alberta oil shock showed that a single-industry downturn can push regional arrears above 0.40%.
- Manufacturing (1.82M): Highly exposed to trade policy. The BoC's 2025 Financial Stability Report flags trade-sensitive industries as the primary risk to mortgage holders. An extended trade war could push national arrears above 0.5%.
Underserved -- alternative documentation needed:
- Self-employed (~2.8M): 13% of the workforce, 3% of insured mortgages. Matching these borrowers to B-lenders with stated-income or bank-statement programs is where brokers add the most value.
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Data sources: Statistics Canada Labour Force Survey (Tables 14-10-0287, 14-10-0355, 14-10-0288), StatsCan Tables 11-10-0065 (DSR), 38-10-0238 (debt-to-income), Quarterly Demographic Estimates, CBA Mortgages in Arrears, CMHC Mortgage Delinquency Rate Data Tables, CMHC Residential Mortgage Industry Report, Bank of Canada SAN 2020-8, SAN 2024-25, SAN 2025-1, Financial Stability Report 2025, ISED Key Small Business Statistics 2025, Treasury Board of Canada Secretariat, SecondStreet.org analysis.