Statistics Canada released the labour market data on Friday. Canada's unemployment rate rose to 7.1% in September from 7.0% in August. It was the highest level since February 2014.

Analysts had expected the unemployment rate to decline 6.9%.

The increase was driven by higher labour participation. The labour participation rate remained unchanged at 65.9% in September, but the size of the labour force climbed.

The number of employed people climbed by 12,100 jobs in September, beating expectations for a decline of 10,000 jobs, after a 12,000 increase in August.

The increase was driven by a rise in part-time work. Full-time employment was down by 62,000 in September, while part-time employment increased by 74,000 jobs.

The Bank of Canada monitors closely the labour participation rate.