Between July and August, the economy lost 11,000 jobs, most of them part-time positions.
Economists had expected the economy to add 10,000 jobs last month and the unemployment rate to remain at 7.0 per cent.
Statistics Canada says fewer people had jobs in wholesale and retail trade, transportation and warehousing, while more people had jobs in construction, in professional, scientific and technical services, and in public administration.
The agency says the number of private-sector employees fell by 112,000 in August while self-employment rose by 87,000.
The number of public-sector employees rose by 14,000 in August.
"Public-sector employment has been on an upward trend since February 2014, while the trend for private-sector employees and self-employment has been relatively flat since the fall of 2013," Statistics Canada said.
Fewer young people and women had jobs in August, says Statistics Canada. The number of people between the ages of 15 and 24 working fell by 20,000 during the month. Employment fell by 18,000 among women aged 25 to 54.
Men, however, fared better. Statistics Canada says the number of men between the ages of 25 to 54 with jobs rose by 36,000 in August.
Employment fell in Alberta and Newfoundland and Labrador, and rose in Nova Scotia and New Brunswick.