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This article argues that misalignment between the realities of work in the new economy and the regulations is having negative health and social implications at all levels of Canadian society. Remedying this requires drastic reshaping of policy approaches, but current laws and employment norms presume the labour market is a static entity. Policymakers should focus on improving how labour market data is collected for producing evidence‐based recommendations, and on re‐evaluating neoclassical economic assumptions underpinning this outdated framework. We argue the expansion of precarious work is reshaping the Canadian economy and society, and provide recommendations for data, policy and administration to address this trend.