OTTAWA – Ontario shed another 35,000 jobs in February as Canada's manufacturing heartland suffered the full force of the worsening global recession.

The province's employment loss was nearly half of the 82,600 jobs that disappeared nationally last month, Statistics Canada reported today.

The latest snapshot shows a 7.7 per cent national unemployment rate, nearly two points higher than it was 12 months ago.

And in Ontario, where goods-producing industries have been particularly hard hit by the collapse of export sales to the shrivelled United States market, the jobless rate was even higher, at 8.7 per cent--the worst since in more than a decade.

Unemployment in Toronto was running at about 8.3 per cent--up from 7.8 per cent the previous month, StatsCan estimates.

The continuing employment crunch added to suspicions that the Canadian economy is headed for a worse-than-forecast downturn this year and raised new questions about whether Prime Minister Stephen Harper's economic stimulus measures are adequate to offset the bleak business conditions.

"Horrendous," commented Liberal finance critic John McCallum. "The numbers keep getting worse."

It's too soon to say for sure if the Conservatives' Jan. 27 budget will have to be updated with a larger economic stimulus package, but it certainly may be necessary, McCallum said.

"It looks like we are on a path where more will have to be done," he commented.

Speaking today in London, Ont., Harper said that despite rising job losses, the country will face a labour shortage when the recession ends. Harper said these are tough times, but Canada must prepare for the economic recovery and the need for labour it will bring.

The federal budget, which contains $35 billion in new spending and tax measures meant to boost economic activity over two years, has now been passed by the House of Commons and the Senate.

McCallum said the latest employment survey adds weight to the more gloomy predictions for the economy this year.

TD Bank economists released an analysis saying: "February's numbers confirm our pessimistic outlook for Canadian employment. We believe that we're only at the half-way mark for the total job losses over this recession, and forecast the national unemployment rate will rise to 10% by year-end."

The picture is decidedly bleak in Ontario. Even though the province has only 39 per cent of the country's working-age population, its job losses since October total 160,000, more than half of all employment losses nationally (295,000) in that period.

"Regrettably no, I'm not surprised," Finance Minister Jim Flaherty told a Toronto radio station from England, where he is attending a meeting of global finance ministers.

"The overall numbers are not going to be good for some time, even though they'll be better than they would have been because of the economic stimulus" in the budget, he said.

"But the reality is, we're going to have a difficult year."

NDP MP Libby Davies said the Conservative response to rising unemployment has been inadequate.

"The unemployment rate is closing in on 8 per cent, and what's the finance minister saying? He's saying he's not surprised," Davies said in the Commons. "He even expects the losses to continue the whole year, admitting that Conservative policies are not working. When will this government change course and actually create the jobs that Canadians need?"

With the housing boom over, the bulk of the employment decline in February was in construction, which shed 43,000 jobs. There were also losses in professional, scientific and technical services, as well as in natural resources and educational services.

The agency saidone hard-hit segment of the labour force has been young male workers. Employment among men aged between 15 and 24 has decreased by 104,000 in the past four months.

And the only industries with job pick-ups in February were manufacturing and agriculture, both industries where employment remains down from a year ago.

With files from Canadian Press