Jobless rate hits 13.8% with no recession, raising alarms over long-term career damage
Youth unemployment in Canada has climbed sharply in recent years, reaching levels typically seen during recessions despite continued economic growth, according to a new report.
The study finds that the unemployment rate for Canadians aged 15 to 24 rose from 10% in 2022 to 13.8% in 2025, marking the fastest three-year increase on record outside of a downturn. The scale and speed of the increase have raised concerns about lasting consequences for young workers entering a weakening job market.
"Canada's youth unemployment is a crisis and will have serious consequences in later years when youths today who are unable to secure work try to find steady employment as adults," said Philip Cross, a senior fellow at the Fraser Institute and author of the report.
The deterioration has widened the divide between younger and older workers. In 2025, the gap between youth unemployment (13.8%) and adult unemployment (5.7%) reached 8.1 percentage points, one of the largest differences on record.
At the same time, Canada’s youth jobless rate continues to outpace that of the United States. The 3.8 percentage point difference in 2025—13.8% in Canada versus 10% south of the border—represents one of the widest gaps outside of the pandemic and the late 1990s.
The report highlights that the recent surge has been concentrated among teenagers, whose unemployment rate has approached levels typically associated with severe economic contractions. Young people are also remaining out of work longer, with average unemployment durations reaching record highs.
Unlike past spikes in joblessness, the current increase is not tied to a broader economic downturn. Instead, the study points to domestic policy factors as key drivers.
Specifically, a sharp rise in immigration—particularly among lower-skilled workers—has expanded the pool of job seekers, while increases in minimum wages across provinces have raised hiring costs and dampened demand for entry-level labour.
These pressures have been most visible in sectors that traditionally employ young workers, including retail, accommodation and food services, where youth employment has declined even as hiring of older workers continued.
"The extraordinary surge in youth unemployment in Canada is a homegrown problem, and policymakers in Ottawa and in provincial legislatures should review the policies that are making it worse," Cross said.
The findings also challenge the notion that youth unemployment is simply an early signal of an impending recession. The report notes that Canada’s economy has continued to expand since 2022, even as joblessness among young people has accelerated.
While recent data suggests some easing in youth unemployment into early 2026, the report warns that structural imbalances in the labour market—particularly the mismatch between labour supply and demand—could continue to weigh on employment prospects for young Canadians.
