Canada’s youth unemployment crisis is worse than it looks and teens are the hardest hit, a new report by Desjardins says, noting it is now at a level normally seen “during a recession.”
The report says Canada’s youth unemployment has worsened since 2022, with overall youth unemployment rising from 10 per cent in 2022 to 14 per cent in mid-2025.
Nearly one in five Canadian teens want to work but cannot find any jobs, the report noted.
It added that young adults, aged 20 to 24, also saw a mild increase in unemployment over the three-year period, from nine per cent to 11 per cent.
“Despite the relative resilience of the Canadian labour market in the face of trade war uncertainty, the youth unemployment rate has spiked. The increase has been particularly pronounced among Canada’s youngest workers,” the report by Desjardins economists Kari Norman and Randall Bartlett said.
While youth unemployment has traditionally been higher than unemployment among core-aged workers (aged 25 to 54), the gap seems to be widening.
Get breaking National news
For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen.
“The youth unemployment rate has risen much faster than the unemployment rate for older age cohorts and is now at a level more commonly seen during a recession,” the report read.
Rapidly rising youth unemployment is usually a sign of economic turbulence, including recessions or economic downturns, the report added.
“Looking back over the past half century, we see that each of the previous upticks in Canada’s youth unemployment rate corresponded with a recession,” it said, adding, however, that the current uptick is “unusual” since Canada has not been in a recession.
A recession is defined by two consecutive quarters — meaning, two back-to-back three-month periods — where the country’s economic output as measured by gross domestic product shrinks.
The “sharp rise in Canada’s population of young, temporary residents since the pandemic” has played a role in Canada’s youngest workers not finding work, the report said.
However, it also pointed to other factors such as the rise of the gig economy and slowing investment in Canada owing to the trade war with the United States.
“Precarious employment, including contract and gig work, has taken on an increasing role in the youth labour market,” the report said.
According to Statistics Canada, more than 40 per cent of self-employed youth were gig workers, as compared with 26 per cent of self-employed core-aged workers.
“When we look at several major gig platforms in Canada, we see that minimum age requirements prevent most teens from qualifying for this type of work,” the report said.
Retail remains the largest source of youth employment, although its dominance is declining. In 2022, the retail sector accounted for 30 per cent of youth employment. By mid-2025, it was less than 25 per cent.
© 2025 Global News, a division of Corus Entertainment Inc.
