D.T. Cochrane is the senior economist with the Canadian Labour Congress and former policy analyst with Canadians for Tax Fairness.

The negative effects of trade-war uncertainty can now be observed in Statistics Canada’s official employment data: This country lost 62,000 full-time jobs in March. Excluding the first year of the COVID-19 pandemic, this is the worst March on record for full-time job losses, even if we account for labour force growth.

It seems undeniable that U.S. President Donald Trump’s chaotic tariffs are the reason for the March job losses, and there have been some high-profile layoffs blamed on the levies. However, the connection is not straightforward.

Only 0.7 per cent of the workers who became unemployed in March were laid off, which matches the prepandemic average for the month. There were actually more manufacturing jobs in March than in November when Mr. Trump first threatened sweeping tariffs, despite the fact that such levies would devastate the sector.

This means the labour consequences of the tariffs are more indirect. Consider the increase in part-time jobs that partially compensated for the loss of full-time work. There are many reasons people choose part-time work: Students may want more time to study, or a retiree may want more leisure time. But in the context of Mr. Trump’s trade war, it is reasonable to assume that this is largely involuntary.

Employers looking to cut costs without losing experienced employees are likely offering workers fewer hours. In a strong economy, workers that need full-time hours can more easily refuse or find full-time employment elsewhere. But given the current economic uncertainty, if the choice is between part-time hours or losing your job, many workers will accept part-time.

Workers aged 25 to 54 lost 21,500 full-time jobs and picked up 15,600 part-time jobs. Economists refer to this cohort as “core age” because these are the years when most people earn most of their lifetime labour income. They are unlikely to prefer part-time to full-time work.

In terms of total job losses, combining both full-time and part-time work, the goods-producing sector lost 11,700 jobs, with the majority in agriculture. This seems directly connected to Mr. Trump’s tariffs. However, the biggest number of job losses were in a variety of service sectors, including business services, wholesale trade, recreation services and retail. These are sectors likely to be affected by households and businesses lowering expenses to prepare for the tariffs’ negative effects.

These job losses, pushing more workers into the job search, will weaken the labour market. However, Canada’s unemployment rate was already trending higher for about two years before Mr. Trump announced his plan to impose tariffs on all imports from Canada. This makes the current job market particularly difficult for workers who are already unemployed.

We tend to think of unemployed workers as people who left or lost a job. But the rank of the unemployed includes new entrants to the labour force. These include recent immigrants, young people and previously unpaid caregivers.

In 2022, for the first time on record, more than half of unemployed workers were new entrants. That share has continued to climb. This means the recent increase in unemployment is more about insufficient demand for workers than it is about people losing their jobs. Statscan’s analysis of the March job numbers highlighted the difficulties that new entrants are having.

Alongside the growing share of new entrants among unemployed workers, the number of workers in long-term unemployment is rapidly climbing. More than 200,000 workers have been unemployed for more than a year, up from fewer than 100,000 in late 2023.

Strengthening employment insurance is an important way to support workers that become unemployed because of the tariffs. However, as the Statscan release noted, new entrants are unlikely to qualify for EI. And any worker unemployed for over a year has run out of benefits.

Workers already struggling to find work cannot be overlooked and left behind. The obvious solution is to give these workers a job.

Governments have two broad mechanisms for creating jobs. They can induce private sector demand for workers or hire them into the public sector. We need to do both. But inducing private sector demand takes time, and the mechanisms are more uncertain, so direct public sector hiring should be the first response.

Unfortunately, both the federal Liberals and Conservatives indicated that, if elected, they would reduce the size of the federal public service. In other words, they plan to use a key tool for protecting jobs and income in the exact wrong way. Only the NDP has explicitly acknowledged the importance of the public sector to buffer against job losses.

We are at the beginning of the new normal in Canada-U.S. trade relations. Canadians need a federal government that will use every tool at its disposal to protect workers from the turmoil to come.