Why this Canadian city has one of the highest unemployment rates as national job market grows: Kelowna’s crisis now higher than the pandemic peak

Kelowna’s unemployment rate has reached 11 per cent, rising from 9.3 per cent the previous month and surpassing levels recorded during the peak of the pandemic. Castanet’s reporting shows that 16,200 residents across Metro Kelowna — from Peachland to Lake Country — were actively seeking work.

The sharp increase stands in contrast to Canada’s broader labour picture. Canada’s economy “continued to blow past job forecasts in November,” according to Statistics Canada, which said 54,000 jobs were added nationally as the unemployment rate fell to 6.5 per cent. Several economists, quoted in the same national reporting, cautioned against reading too much into consecutive strong headline figures because the labour force survey can fluctuate.

Kelowna diverges from improving national indicatorsRoss Hickey, an associate professor at the University of British Columbia Okanagan, said in conversation with Castanet that he was “not sure why Kelowna is losing jobs while the country is creating them,” adding that labour force surveys are subject to sampling variation. He said economists typically assess longer-term patterns rather than one-month shifts.

Castanet’s data show Kelowna’s unemployment rate climbing steadily from 4.1 per cent in August to 11 per cent. During the same period, the city’s labour force expanded from 130,000 to 147,800, contributing to the rising jobless total even as some positions were added.Nationally, employment grew by 181,000 positions between September and November, according to Statistics Canada. Youth aged 15 to 24 added 50,000 roles in November, while part-time employment increased by 63,000. The health-care and social assistance sector gained 46,000 jobs, offsetting declines in wholesale and retail trade and manufacturing.

Construction slowdown and shrinking local sectorsKelowna Chamber of Commerce chief executive George Greenwood told Castanet that the rise in unemployment was troubling, citing full-time job losses across major industries. He pointed to layoffs in the lumber sector and described homebuilding as “basically paralysed” in his comments to Castanet, blaming a significant slowdown in construction and real estate activity.

Both Kelowna and West Kelowna have seen substantial drops in building permit applications. Greenwood said several large multi-year developments had concluded and “there’s not a whole lot more going on,” leaving construction workers without new projects.

Local universities and colleges have also cut staffing due to a fall in international student enrolment. Hickey, quoted by Castanet, said the reductions affect direct employment and spending within the wider local economy.

Sector impacts amid broader economic pressureGreenwood warned in his remarks to Castanet that conditions could worsen without action on tariffs affecting lumber, steel, aluminium, and autos, adding that businesses were delaying investment decisions amid tariff-related uncertainty.While Canada’s national economy shows signs of resilience heading into the end of the year, Kelowna continues to move in the opposite direction, with several of its core sectors contracting simultaneously.
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