By Josh Tagg, mortgage broker · Mortgages for Less with INDI Mortgage · Calgary, serving all of Alberta ·
Because I’m a mortgage broker in Alberta, I spend a lot of time watching the economy because it directly affects mortgage rates, demand for housing, and homebuyer and homeowner confidence. Recently, you may have seen headlines saying Canada’s unemployment rate has fallen (which means fewer people are unemployed), even though job growth hasn’t been very good. How can that be?
A key idea behind these headlines is something called the breakeven employment rate. Let me break it down and explain why it matters for Alberta homeowners and buyers.
What is the breakeven employment rate?
The breakeven employment rate is the number of new jobs the economy needs to create each month just to keep the unemployment rate from going up.
Unemployment is not only about how many jobs exist. It is also about how many people are looking for work. When Canada’s population grows quickly, especially among working-age people, we need to generate a lot of new jobs every month to keep unemployment stable—not to improve it, just to keep it from getting worse.
When population growth slows down, (fewer people are looking for work), the economy needs fewer new jobs to prevent unemployment from rising.
The breakeven employment rate answers this question: how many jobs do we need to create so unemployment does not get worse?
What is Canada’s breakeven employment rate right now?
Some economists, including Capital Economics, are now saying Canada’s breakeven employment rate is close to zero.
Canada’s population growth has slowed sharply, especially among temporary residents. That means the labour force is no longer growing the way it was over the past few years. We have fewer people actively looking for work. It’s a clear case of supply-and-demand. The supply was matching the demand, but now the demand has decreased while the supply has remained the same.
Because of this, the economy doesn’t need to create as many jobs to keep the unemployment rate steady and bring the breakeven employment rate close to zero. This is very different from periods of strong immigration-driven growth, when the economy needs tens of thousands of new jobs every month just to stay on par.
Why is this happening now?
This shift did not happen by accident. Recent data shows several important changes.
There has been a large drop in international students due to a federal cap. There has also been a decline in temporary foreign workers. On top of that, Canada’s overall population fell by about 76,000 people in the third quarter, and the seasonally adjusted decline was even larger.
International students and temporary workers make up a big part of Canada’s labour force growth. When those numbers fall quickly, the supply of workers shrinks. With fewer people entering or staying in the workforce, unemployment can decline. The supply hasn’t changed, but the demand has decreased. That helps explain the recent sharp drop in the unemployment rate.
Why does this matter for Alberta homebuyers and homeowners?
This matters because falling unemployment does not always mean the economy is booming.
A breakeven employment rate near zero means the labour market can look stronger than it really is. A strong labour market is one that is growing and where workers are finding jobs and seeing an pay raises. Unemployment may be falling because there are fewer job-seekers, not because the labour market is getting stronger.
For policymakers like the Bank of Canada, this means unemployment data must be interpreted carefully. A lower unemployment rate on its own may not be enough to justify higher interest rates or delayed rate cuts. For Alberta homebuyers and homeowners, this context is important. It helps explain why interest rate decisions may depend more on inflation trends and overall economic growth than on a single unemployment headline.
It also means that housing demand may not surge just because unemployment looks better on paper. Confidence, income growth, and affordability still matter, especially here in Alberta where local job markets often differ from national averages.
What’s my takeaway as an Alberta mortgage broker?
When you see economic headlines, it is always worth looking at what is driving the numbers. Right now, Canada’s falling unemployment rate is telling us more about population changes than about strong job creation.
If you are thinking about buying your first home, upgrading, or renewing your mortgage, this kind of economic detail matters because it shapes interest rate expectations and market sentiment.
As always, I focus on what this means for real people making real housing decisions in Alberta. If you want to talk about how current economic conditions affect your mortgage options, I am always happy to help. Contact me to get started!
How an Alberta mortgage broker helps you read the economy
Headlines move faster than mortgage rates do. Here’s what a broker does with the numbers behind them:
- Explain what a jobs or inflation report is likely to mean for fixed and variable rates.
- Compare fixed and variable options across a broad panel of banks, monolines and alternative lenders.
- Hold a rate with a pre-approval while you shop, so a headline doesn’t rush your decision.
- Look at your local job market and income, since Alberta often differs from the national averages.
- Build a plan for buying your first home, upgrading or renewing around your own budget.
- Find a lender when your own bank has said no.
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Apply Online → Book a Discovery Call → Serving Calgary, Edmonton & all of Alberta · Mortgages for Less with INDI MortgageQuestions about unemployment, jobs and Alberta mortgages
What is the breakeven employment rate?
Why did Canada’s unemployment rate fall without many new jobs?
What was Canada’s breakeven employment rate in late 2025?
Why did Canada’s population growth slow?
Does a lower unemployment rate mean higher mortgage rates?
What does this mean for Alberta homebuyers?
This article was written in December 2025; employment, population and interest rate figures have changed since then. It is general information for Alberta homebuyers and homeowners, not financial, mortgage or legal advice. Rates, products and qualification rules vary by lender and can change. Please speak with a licensed mortgage professional about your specific circumstances. Mortgages for Less with INDI Mortgage.
