Why has London's labour market weakened faster than Hamilton's or Kitchener's, what is propping it up, and what do named sources expect next?
London's unemployment rate is 8.1%, up from 6.7% a year earlier, and CMHC says its rental vacancy rate reached its highest in 15 years in 2025 because of fewer international migrants, a softer economy and record rental completions
Graphic: The London economy: hospitals, schools and a defence-vehicle plant …
What happened
London's unemployment rate was 8.1% in October 2026, against 6.7% a year earlier, and employment was 311 thousand, a change of -6.2% on a year earlier (Statistics Canada, three-month averages, metropolitan area). Hamilton's unemployment rate was 7.6%, from 6.9% a year earlier, and Kitchener's was 7.1%, from 7.6%; employment changed -0.8% in Hamilton and 1.7% in Kitchener over the year.
Unemployment rate: eight more metropolitan areas
Percent, three-month moving average, seasonally adjusted (same table as the six large cities).
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Latest values: London CMA 8.1 (2026-10); Winnipeg CMA 5 (2026-10); Halifax CMA 5.4 (2026-10); Québec CMA 4.5 (2026-10); and 4 more in the data table.
Related relationships: Winnipeg · Halifax · Hamilton · London
The rental market turned in the same direction. The vacancy rate in the October 2025 survey was 3.8%, from 1.7% two years earlier, and the average two-bedroom rent was C$1,645. The twelve months to September 2026 account for 3,788 of the 7,360 homes started over two years. The net change in non-permanent residents in the latest demographic year was -1,777, after 12 thousand the year before.
Rental vacancy rate: fourteen cities
Percent of units vacant, October survey each year; row and apartment structures of three units and over. CMHC data distributed by Statistics Canada.
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Latest values: London CMA 3.8 (2025); Calgary 4.9 (2025); Edmonton 3.8 (2025); Toronto 3 (2025); and 10 more in the data table.
Why it happened
The City of London lists health care, retail, education, manufacturing, accommodation and food, professional services, finance and insurance, and construction as its top eight employment sectors. The 2021 Census puts health care and social assistance at 17.4% of jobs located in the area, retail at 12.2% and manufacturing at 11.2%.
Evidence: City of London: Economic development (City of London, Ontario)
Ontario's Financial Accountability Office projected in April 2025 that US tariffs would leave London employment 1.3 per cent lower in 2026 than without tariffs, the fifth-largest effect among Ontario's metropolitan areas, because these areas are more exposed to export-focused manufacturing. That is a scenario projection, not an observation. The Labour Force Survey's annual estimate for manufacturing employment in London was 38 thousand in 2025, a change of -7.7% from 42 thousand a year earlier; it is a sample estimate and moves by large amounts from year to year.
Evidence: Financial Accountability Office of Ontario: Impacts of US Tariffs on the Ontario Economy
CMHC gives three reasons for the rental vacancy rate of 4%, its highest in 15 years: a decline in international migration, a softening economy and record-high supply increases. It adds that non-permanent residents whose work permits expired and were not renewed, and labour-market weakness in tariff-impacted manufacturing and transportation, also lowered demand. CMHC's survey universe differs from the Statistics Canada series quoted above, which is why the two vacancy rates are not identical.
Evidence: CMHC: Rental Market Report 2025 - London CMA section
CMHC says London's rental market had been supported by international student demand for much of the last decade, and that a sharp drop in enrolment over the past two years raised vacancy in the zone that includes Western University; the zone where Fanshawe College is located also stayed high.
Evidence: CMHC: Rental Market Report 2025 - London CMA section
Why it matters
Fanshawe College says a continued decline in international enrolments, with overall full-time enrolment expected to fall 18 per cent in 2026/27, is, in part, behind expected deficits of $26.5-million in 2025/26 and $50.6 million in 2026/27, and it is suspending programs on top of the 40 programs announced last spring. CMHC, quoted above, links the same fall in enrolment to London's rental vacancy.
Evidence: Fanshawe College: Fanshawe announces additional program suspensions
The City of London reports, from Lightcast data for the City, that health care and social assistance employed 34,089 people in 2023, 15.7% of the workforce, and expects the sector's share of the local economy to remain steady. The London Economic Development Corporation separately gives 25,000 for the health sector. The two figures use different definitions and neither source reconciles them. Health care is the largest source of jobs in the Labour Force Survey too: 50 thousand in 2025, 8.0% above its 46 thousand in 2022.
Evidence: City of London: Health care and social assistance (City of London sector page); London Economic Development Corporation: Health and Life Sciences (London, Canada)
General Dynamics Land Systems-Canada said in London on 16 July 2026 that it had received a nearly $2 billion award for 190 more armoured combat support vehicles under an amendment to a contract first awarded for 360 vehicles in 2019, that it employs 1,700 people in London, and that more than 85% of its revenue comes from exports. The release does not say how many of the 1,700 jobs are new.
History
London's population was 633 thousand on 1 July 2025, up 7.9% in three years and 26.2% in ten. Hamilton's grew 5.3% and Kitchener's 11.7% over the same three years. Net non-permanent residents added 13 thousand people at the peak of the last five years, compared with -1,777 in the latest year.
Statistics Canada says population growth moderated in large urban centres, where non-permanent residents are typically found in greater numbers, and that new immigrants are increasingly settling outside the largest centres: the share of Ontario's new immigrants who chose the Toronto area fell from 76.1% to 60.5% in five years, while all other metropolitan areas in Ontario saw their share rise. The release does not give London's share.
Evidence: Statistics Canada: The Daily - Canada's population estimates: Subprovincial areas, 2025
Across geographies
The London Economic Development Corporation, a not-for-profit funded by the City, describes advanced manufacturing for the London region as more than 38,000 employees, about 12% of all employment in the region, and says defence and composite-material products are driving its growth. On its defence page the same agency gives a regional manufacturing workforce of more than 20,000, of which about 4,000 work in defence and aerospace. The agency's two figures cannot both be the whole manufacturing workforce, and its definitions are not stated; the 2021 Census counted 24 thousand manufacturing jobs located in the metropolitan area.
Evidence: London Economic Development Corporation: Advanced Manufacturing (London, Canada); London Economic Development Corporation: Defence & Aerospace (London, Canada)
The Financial Accountability Office projects a larger effect for Windsor (1.6 per cent) and Kitchener-Cambridge-Waterloo (1.5 per cent) than for London (1.3 per cent). The projection is for 2026 against a no-tariff baseline, so it cannot be compared directly with the observed rise in London's unemployment rate.
Evidence: Financial Accountability Office of Ontario: Impacts of US Tariffs on the Ontario Economy
What it influences
The City reports that building permits were issued for 5,462 new units in 2025, the most in its history, driven largely by high-density forms (3,980 units), while only 214 low-density units were permitted against 958 in the projections on which its development-charge reserves are based. These are City permits, not metropolitan starts or completions.
Evidence: City of London: 2025 Annual Development Report (staff report to Planning and Environment Committee)
CMHC reports purpose-built rental apartment supply grew 2.1% in 2025, with 2,585 units completed from January to September, a record, and that the average turnover rent for two-bedroom units decreased slightly. Under-construction units were 5,857 in September 2026.
Evidence: CMHC: Rental Market Report 2025 - London CMA section
Housing starts (12-month total): London, other mid-size cities and the six large cities
Total units started over the previous 12 months; CMHC data distributed by Statistics Canada. Levels differ with city size.
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Latest values: London CMA 3,788 (2026-09); Winnipeg CMA 6,920 (2026-09); Halifax CMA 5,107 (2026-09); Québec CMA 9,293 (2026-09); and 10 more in the data table.
Related relationships: Calgary · Edmonton · Toronto · Vancouver
Risks
The Canadian Press reports that PowerCo Canada, a Volkswagen subsidiary, has pushed back the opening of its $7-billion battery plant in St. Thomas by two years, to 2029, citing market demand, technology and group strategy. The federal government committed $700 million and Ontario $500 million to the project. The Government of Ontario had said in October 2025 that the plant would employ up to 3,000 people directly; that was before the delay, and St. Thomas is a separate city from London, so the sources do not say how many of those jobs would be held by London residents.
Evidence: The Canadian Press (via BNN Bloomberg): Volkswagen delays production at Ontario electric vehicle battery plant until 2029; Government of Ontario (release reposted by St. Thomas Economic Development): Ontario Celebrates PowerCo Construction Milestone in St. Thomas
The Province said in its March 2026 budget that trade disruptions have disproportionately hurt employment in the regions of Ontario near the United States with a higher concentration of manufacturing employment. It does not name London.
What to watch
CMHC's summer 2026 outlook for the London area has starts of 4,100 in 2026 and a baseline of 3,900 in 2027 (against 3,200 in its alternative scenario), with the rental vacancy rate rising from 4.0 per cent in 2025 to 4.3 per cent in 2026 and 4.7 per cent in 2028. The City says rapid transit service is expected to begin on the East London Link in 2027 and on the Wellington Gateway in 2029. These are publishers' forecasts and plans, not Northline's. Statistics Canada's Labour Force Survey, CMHC's monthly starts and its autumn Rental Market Survey, and Fanshawe's and PowerCo's next announcements show how these play out.
Evidence: CMHC: Housing Market Outlook, summer update 2026 - London forecast table; City of London: What is Rapid Transit? (City of London)
Prepared with AI assistance.
Follow the relationships
- Ontario 9 with evidence · 12 recorded Open in Studio
- Employment 0 with evidence · 0 recorded Open in Studio
Sources for this section (8 datasets, 16 documents)
Data
- Labour force characteristics by census metropolitan area, three-month moving average, seasonally adjusted (14-10-0459-01; 6 series; latest October 2026; retrieved 2026-11-07)
- Canada Mortgage and Housing Corporation, vacancy rates, row and apartment structures of three units and over, privately initiated in census metropolitan areas, weighted average (34-10-0130-01; 1 series; latest 2025; retrieved 2026-10-25)
- Canada Mortgage and Housing Corporation, average rents for areas with a population of 10,000 and over (34-10-0133-01; 1 series; latest 2025; retrieved 2026-10-25)
- Canada Mortgage and Housing Corporation, housing starts, under construction and completions in selected census metropolitan areas, monthly (34-10-0154-01; 2 series; latest September 2026; retrieved 2026-10-25)
- Components of population change by census metropolitan area and census agglomeration, 2021 boundaries (17-10-0149-01; 1 series; latest 2024; retrieved 2026-10-25)
- Place of work status by industry sector, work activity during the reference year, age and gender: Census metropolitan areas, tracted census agglomerations and census tracts of work (98-10-0492-01; 3 series; latest 1 January 2021; retrieved 2026-10-24)
- Employment characteristics by census metropolitan area, annual (14-10-0468-01; 2 series; latest 2025; retrieved 2026-11-07)
- Population estimates, July 1, by census metropolitan area and census agglomeration, 2021 boundaries (17-10-0148-01; 3 series; latest 2025; retrieved 2026-10-24)
Documents cited
- City of London: Economic development (City of London, Ontario) (retrieved 2026-11-07)
- Financial Accountability Office of Ontario: Impacts of US Tariffs on the Ontario Economy (retrieved 2026-10-25)
- CMHC: Rental Market Report 2025 - London CMA section (retrieved 2026-11-07)
- Fanshawe College: Fanshawe announces additional program suspensions (retrieved 2026-10-25)
- City of London: Health care and social assistance (City of London sector page) (retrieved 2026-10-25)
- London Economic Development Corporation: Health and Life Sciences (London, Canada) (retrieved 2026-10-25)
- General Dynamics Land Systems-Canada: General Dynamics Land Systems Signs Strategic Partnership with Government of Canada to Advance Defence Industrial Strategy (retrieved 2026-10-25)
- Statistics Canada: The Daily - Canada's population estimates: Subprovincial areas, 2025 (retrieved 2026-10-25)
- London Economic Development Corporation: Advanced Manufacturing (London, Canada) (retrieved 2026-11-07)
- London Economic Development Corporation: Defence & Aerospace (London, Canada) (retrieved 2026-10-25)
- City of London: 2025 Annual Development Report (staff report to Planning and Environment Committee) (retrieved 2026-10-25)
- The Canadian Press (via BNN Bloomberg): Volkswagen delays production at Ontario electric vehicle battery plant until 2029 (retrieved 2026-10-25)
- Government of Ontario (release reposted by St. Thomas Economic Development): Ontario Celebrates PowerCo Construction Milestone in St. Thomas (retrieved 2026-10-25)
- Government of Ontario, Ministry of Finance: 2026 Ontario Budget, Chapter 2: Economic Performance and Outlook (retrieved 2026-10-25)
- CMHC: Housing Market Outlook, summer update 2026 - London forecast table (retrieved 2026-10-25)
- City of London: What is Rapid Transit? (City of London) (retrieved 2026-10-25)
Each dataset is used under its licence; attribution and series-level detail are in each chart’s “About this data” panel. Limitations: Every explanation here is a statement by the named organisation. Geographies are mixed and labelled where used: Statistics Canada's census metropolitan area (unemployment, employment, population, housing starts), the City of London (building permits, sector profiles by Lightcast), the London 'region' used by the London Economic Development Corporation (which includes places such as St. Thomas), and Ontario. Metropolitan wages are not published, there is no metropolitan consumer price index, and no source cited here ranks London's largest employers. The Financial Accountability Office figure is a scenario projection made in April 2025, not an observed outcome. Annual industry employment is a Labour Force Survey estimate with sampling error. Forecasts are the publishers', not Northline's.