Statistics Canada released the labour market data on Friday. Canada's unemployment rate declined to 7.1% in March from 7.3% in February. Analysts had expected the unemployment rate to remain unchanged at 7.3%.

The labour participation rate remained unchanged at 65.9% in March.

The Bank of Canada monitors closely the labour participation rate.

The number of employed people rose by 40,600 jobs in March, exceeding expectations for a rise of 10,000 jobs, after a 2,300 decrease in February.

The increase was mainly driven by a rise in full-time work. Full-time employment climbed by 35,300 in March, while part-time employment increased by 5,300 jobs.

Employment rose in health care and social assistance, accommodation and food services, professional, scientific and technical services, and 'other services'.