A recent report by Desjardins indicates that Canada’s youth unemployment crisis is more severe than anticipated, particularly impacting teenagers, with unemployment levels now comparable to those typically seen during a recession. Since 2022, overall youth unemployment has increased from 10% to an alarming 14% in mid-2025, with almost one in five Canadian teens expressing a desire to work but unable to find employment. Young adults aged 20 to 24 are also affected, with unemployment rising from 9% to 11% over the three years. The report emphasizes that despite a relatively stable Canadian labor market amidst trade uncertainties, youth unemployment has seen a notable increase, especially for the youngest workers—highlighting a troubling trend.
Historically, youth unemployment rates have always exceeded those of core-aged workers (ages 25 to 54), but the gap is now widening significantly. The Desjardins report notes that this rise in youth unemployment is accelerating faster than that among older age groups, pushing the rate to a level usually associated with economic recessions. Such sharply rising youth unemployment often signals broader economic challenges, yet it is notable that Canada is not currently in a recession, as defined by two consecutive quarters of negative economic growth.
Examining historical patterns, the report reveals that previous increases in youth unemployment have coincided with recessions. However, this current rise occurs in a unique context, as Canada has managed to avoid such economic downturns. Contributing factors include a significant increase in the population of young, temporary residents since the pandemic, which has made job placements more competitive. Additionally, the report outlines challenges posed by the gig economy and diminished investment levels in Canada, exacerbated by ongoing trade tensions with the United States.
The prominence of precarious employment types, including contract and gig work, has grown in the youth labor market. More than 40% of self-employed youth identify as gig workers, compared to only 26% of self-employed core-aged workers, underscoring a shift in employment landscapes. However, the report highlights that minimum age requirements on many major gig platforms often exclude teenagers from these opportunities, further impeding their ability to secure meaningful work.
Retail remains the largest sector for youth employment but is showing signs of decline; its share of youth jobs decreased from 30% in 2022 to less than 25% by mid-2025. This trend illustrates a fundamental change in the employment types available to young individuals. The report’s findings suggest an urgent need for policy interventions to address these structural issues to ensure that young Canadians can access viable work opportunities as they navigate a changing job market.
In conclusion, Canada’s youth unemployment crisis, particularly affecting teenagers, presents significant challenges that require immediate attention. As the labor market evolves alongside shifting economic conditions, a comprehensive strategy is needed to support youth employment initiatives, help integrate young workers into stable job opportunities, and mitigate the detrimental impacts of economic uncertainties on this vulnerable demographic. Policymakers must prioritize creating pathways for youth to enter the workforce effectively, ensuring they are equipped to thrive in an increasingly competitive environment.
