OTTAWA - Canada shed 45,000 jobs in July, leaving the unemployment rate unchanged at 8.6 percent, Statistics Canada reported, as the country's finance minister said a recovery in 2010 remained likely.

The drop in employment was higher than expected by analysts, who had eyed loses of around 20,000 jobs.

It is a substantial increase on 7,400 jobs lost in June.

"The unemployment rate remained unchanged at 8.6 percent, as fewer people participated in the labor market," the agency said.

"While most of July's employment losses were in Quebec, there were also losses in Saskatchewan, as well as in Newfoundland and Labrador. Employment was little changed in all other provinces," Statistics Canada said.

Since a peak in October 2008, employment has fallen 414,000, mostly among young people (-205,000) and men aged 25 to 54 (-201,000), it added.

Yves Decady, an analyst with Statistics Canada, told AFP the losses could be explained by late reporting, or a reflection of people giving up their job searches.

Finance Minister Jim Flaherty, interviewed on CTV, noted "it's still a recession, and we have to work our way out of it."

"We expect that there will be continued job losses and this will go on for some months," he said. "We look forward to a recovery in 2010 when things will get better."