Canada’s Youth Unemployment Crisis: A Generation at Risk

Youth unemployment in Canada has quietly climbed to alarming levels—numbers we usually only see during recessions. According to a recent CIBC report, the unemployment rate for Canadians aged 15 to 24 has surged by more than 5.5 percentage points since 2022, reaching 14.6% this summer. That’s the highest since 2010, and it stands in stark contrast to the relatively stable labour market experienced by older workers.

This isn’t just a temporary hiccup in the job market. Analysts point to a troubling mix of structural and technological factors that could leave long-lasting scars on a generation of Canadians.

In a typical downturn, youth unemployment rises faster than the rate for older workers. But what’s happening now is unusual. Even without a full-blown recession, young people are bearing the brunt of a weakening job market.

Several factors are at play:

Artificial Intelligence and automation: Entry-level jobs in retail, business support, and other service industries—the very jobs young workers rely on to get their start—are being replaced by self-checkouts, chatbots, and other labour-saving technologies.

Population growth and competition: A surge of non-permanent residents and students since 2022 added more people to the labour pool, intensifying competition for jobs.

Sectoral exposure: Industries with the highest exposure to AI are also those where youth tend to cluster. Statistics Canada has noted that over 30% of roles in these fields have “high exposure” and “low complementarity” to AI, making them especially vulnerable.

The result is a youth jobless rate that is recession-like, even though the broader economy hasn’t officially entered one.

A high youth unemployment rate isn’t just a number—it has cascading effects on individuals, communities, and the entire economy. Here are some of the biggest risks Canada faces:

1. Personal and Social Consequences

Loss of skills and motivation: Prolonged unemployment can create “scarring,” where young people lose confidence, fall behind in work experience, and struggle to get back into the labour market later.

Mental health struggles: Studies consistently link joblessness with higher risks of depression, anxiety, and even substance abuse. For youth, this can compound the already difficult transition into adulthood.

Delayed life milestones: Without stable work, young Canadians find it harder to afford rent, pursue higher education, or consider buying a home. Many will delay starting families, which could have long-term demographic impacts.

2. Economic Consequences

Lost productivity: A sidelined generation means fewer contributors to GDP growth and innovation. Kings’ Trust and Deloitte estimate Canada could lose $18.5 billion in GDP by 2034 if youth unemployment remains unaddressed.

Lower lifetime earnings: Entering the workforce late often results in permanently lower wages. For today’s youth, this could widen the wealth gap with older generations.

Increased government spending: Social assistance programs and mental health services will face higher demand, straining public finances.

3. Social and Political Consequences

Rising inequality: Youth from disadvantaged communities often struggle the most to find work, deepening existing divides.

Crime and unrest: A lack of opportunities can push some toward petty crime or fuel frustration that undermines social stability.

Brain drain: Ambitious young Canadians may leave for countries offering more opportunities, weakening Canada’s long-term competitiveness.

4. Intergenerational Consequences

Cycle of poverty: Children raised in households with unemployed parents face fewer opportunities, perpetuating disadvantage.

Weakened trust in institutions: If youth feel systematically excluded from the economy, faith in democracy and social cohesion can erode.

There are reasons for cautious optimism. Population growth among non-permanent residents has slowed, which may ease pressure on the labour market. And while AI is eliminating some jobs, it’s also creating new opportunities in emerging industries. Young Canadians, in particular, are well positioned to adapt to these technologies, provided they receive the right training and support.

But optimism without action is dangerous. Without targeted policies—such as more robust training programs, incentives for youth hiring, and expanded mental health supports—the risk is that an entire generation will carry the scars of joblessness well into the future.

Youth unemployment at recessionary levels, without an actual recession, is a flashing warning light. Left unchecked, it could shape the next decade of Canada’s social and economic landscape. It means lower growth, deeper inequality, and a generation that feels left behind.

Addressing this challenge is about more than numbers—it’s about giving young Canadians the tools, confidence, and opportunities to thrive. If Canada wants to secure its future prosperity, ensuring its youth can find meaningful work must become a national priority.