Youth Unemployment in Canada: A Growing Concern

Canada is facing a youth unemployment crisis, with a significant portion of young workers struggling to find jobs. According to a Statistics Canada labour force survey, the youth unemployment rate has reached a 15-year-high at 14.6 per cent in July, with a corresponding teen labour participation rate of around 50 per cent. The situation is exacerbated by the adoption of artificial intelligence, which appears to be hurting youth job prospects. Moreover, the labour market is experiencing a decline in traditional sectors, with retail trade, once the largest employer of youth, losing its dominance.

Key Takeaways:

• The youth unemployment rate in Canada reached a 15-year-high at 14.6 per cent in July, with a corresponding teen labour participation rate of around 50 per cent.
• Artificial intelligence appears to be hurting youth job prospects, with a U.S. study finding that early career workers aged 22 to 25 felt noticeable job losses in AI-exposed occupations.
• Cuts to public sector employment, which have historically provided high school students with their first work experience, could have a pronounced impact on youth unemployment.
• The recent rise in young and unemployed landed immigrants has heightened competition in the job market, disproportionately affecting racialized youth and highly educated immigrants.
• Slowing population growth could restore balance to the labour market, potentially bringing the youth unemployment rate closer to traditional norms.
• Precarious employment, including contract and gig work, has increased among younger Canadian workers, with over 40 per cent of self-employed youth being gig workers in 2023.
• Traditional sectors for youth employment are changing, with retail trade's dominance declining from over 30 per cent of employed youth in 2022 to less than 25 per cent by July 2025.

Statistics:

• The youth unemployment rate reached 14.6 per cent in July, with a teen labour participation rate of around 50 per cent.
• Canada lost 41,000 jobs in July alone, with the youth employment rate falling 0.7 percentage points to 53.6 per cent, its lowest rate since November 1998 outside of the COVID-19 pandemic.
• More than 40 per cent of self-employed youth in 2023 were gig workers.
• Retail trade's share of youth employment fell from over 30 per cent in 2022 to less than 25 per cent by July 2025.
• The youth unemployment rate in Canada currently stands at around 14 per cent for those aged 14 to 24.

Sources:

• Desjardins economists, "Youth Labour Market Outlook"
• Statistics Canada labour force survey