A new report is raising concerns about the state of Canada’s labour market after finding that youth unemployment has climbed to levels typically associated with economic downturns.
According to research released by the Fraser Institute, the unemployment rate among Canadians aged 15 to 24 rose from 10 per cent in 2022 to 13.8 per cent in 2025, marking the fastest three-year increase ever recorded outside of a recession. The report describes the trend as an extraordinary deterioration in employment prospects for young workers.
The study found that more than 437,000 young Canadians were unemployed in 2025, with the gap between youth and adult unemployment widening significantly. While unemployment among adults stood at 5.7 per cent, the youth rate reached 13.8 per cent, creating an 8.1-percentage-point difference—one of the largest disparities on record.
Recent Statistics Canada data suggests the challenge has continued into 2026. Youth unemployment remained near 14 per cent through the early months of the year after peaking at approximately 14.6 per cent in late 2025.
The report also highlights a growing divergence between Canada and the United States. While youth unemployment in the U.S. remained near 10 per cent in 2025, Canada’s rate was nearly four percentage points higher, representing one of the widest gaps between the two countries in decades.
Researchers point to several possible factors behind the increase, including heightened competition for entry-level positions, rising labour costs, and a growing supply of low-skill workers. The report argues these conditions have made it increasingly difficult for young Canadians to secure their first jobs and gain valuable workplace experience.
Economists have long warned that prolonged periods of youth unemployment can have lasting effects on earnings, career development, and workforce participation. As the number of jobless young Canadians continues to grow, the findings are likely to add pressure on policymakers to address barriers facing those entering the labour market.
With unemployment among young Canadians remaining near historic highs outside of recessionary periods, the report suggests Canada’s youth employment challenges may be becoming a significant economic issue rather than a temporary labour market fluctuation.
