A generation sidestepped; Canada’s youth unemployment hits recession-era highs
Write to: Minh Dang mdang@staffingjournal.ca
A cloud is hanging over Canada’s younger workers. This summer, youth unemployment among those aged 15 to 24, rose to 14.6 percent, a level not seen since September 2010, excluding pandemic years. Meanwhile, other age groups seem to find firmer ground.
This disparity isn’t just a statistical quirk; it reflects deeper shifts at play.
The Numbers Tell the Story
In July, Canada lost 40,800 jobs, driving the overall employment rate down to 60.7 percent, its lowest in eight months. The national unemployment rate held at 6.9 percent, a multi-year high.
For youth, the picture was bleaker: their employment rate plunged to 53.6 percent, the lowest since 1998 (excluding pandemic-related years).
Turns out, younger Canadians are bearing the brunt of this downturn, as economic turbulence settles unevenly across generations.
What’s Behind the Surge?
1. Technological Displacement: AI and Automation
CIBC analyst Andrew Grantham suggests that younger workers may be losing out most as automation and artificial intelligence streamline roles, especially entry-level jobs in retail, customer service, and administrative support. Self-checkouts, AI tools in business services, tasks once performed by youth, are now being replaced.
2. Flood of Non-Permanent Residents
Between 2022 and 2024, Canada welcomed an influx of temporary or non-permanent residents. Grantham notes that while this added labor supply, the recent slowdown in population growth due to fewer student arrivals won’t fully explain the renewed drop in youth employment.
3. Sectoral Shocks
Trade tensions, especially from U.S. tariffs on steel, aluminum, and auto parts, hammered hiring in manufacturing and related sectors. These shocks cascaded into industries that often employ youths, like recreation, culture, and business support services.
4. Structural Barriers Remain
This isn’t a Canadian problem alone. Globally, youth unemployment is shaped by broader structural issues; gaps in relevant education, labor-market rigidity, geographic isolation from job centers, and systemic inequalities.
In Canada, the impact is especially clear among racialized and Indigenous youth. In July 2025:
Arab youth: 26.4% unemployment
Black youth: 23.4%
Chinese youth: 20.5%
Filipino youth: 19.4%
South Asian youth: 17.1%
Non-racialized, non-Indigenous: 12.0%
Why It Matters
High youth unemployment isn’t just a statistic; it has real consequences. Young workers delayed in launching careers may face lasting scars: reduced lifetime earnings, delayed milestones like homeownership or starting a family, and a dent in long-term economic confidence. Additional data shows that approximately 11.5% of Canadians aged 15 to 29 are not in employment, education, or training (NEET)—that’s nearly 914,000 youth, with the number growing by over 200,000 in two years.
A Way Forward
Canada is responding. The federal government pledged to create 130,000 youth opportunities via innovative programs such as the Youth Employment and Skills Strategy, Canada Summer Jobs, and the Student Work Placement Program with over $558 million committed for 2025–26.
Experts also point to long-term solutions:
Updating education to align with technology-driven labor demands
Vocational and technical training (TVET) to give youth market-ready skills
Supporting underserved groups, including racialized, Indigenous, or disabled youth
And importantly, policymakers must consider how to integrate AI and automation in ways that preserve opportunity, such as incentivizing companies to invest in youth training even as they embrace new technologies.
What Comes Next?
As Canada grapples with these mounting challenges, its future depends on how well young Canadians are supported through transition. Will they be sidelined by technology or empowered by it? The answer may shape the country’s economic and social resilience for a generation to come.