A new report argues the rise of gig work, artificial intelligence, and rapid population growth are souring job prospects for Canada’s youngest workers.
The Desjardins Economics report, released Thursday, comes as Conservative Leader Pierre Poilievre cites decades-high youth unemployment levels to attack an immigration program for temporary foreign workers. Statistics Canada’s latest labour force survey shows the unemployment rate for young people aged 15 to 24 hit 14.6% in July—a nearly 15-year high outside of the COVID-19 pandemic.
The Desjardins report said that the recent rise in youth unemployment is more typical of recessions. Drilling down deeper into the youth cohort, StatCan said returning students aged 15 and 16 faced an unemployment rate of 31.4% in July, the height of the summer jobs market.
Desjardins economist and report author Kari Norman said she sees the stress of the tough summer labour market at home. “I’ve seen my own kids and my friends’ kids struggle with finding summer jobs, co-op placements, anything like that,” she said.
Temporary worker program at centre of jobs debate
Poilievre on Wednesday described young people in Canada as “generation screwed” for their lack of job opportunities. He blamed Ottawa’s temporary foreign worker program for competing with youth for scarce job openings and called on the Liberals to scrap the regime.
Prime Minister Mark Carney said Wednesday that he is committed to reducing immigration but is not scrapping the temporary foreign worker programs, citing provincial support for the initiative. He opened the door to further adjustments to Canada’s overall immigration plan.
LJ Valencia, another of the Desjardins report’s authors, said that much of the current situation traces back to the COVID-19 pandemic recovery—when businesses were hungry for labour and Ottawa ramped up the inflow of foreign workers and loosened restrictions on international students to meet the demand. “Job opportunities are declining because the economy can’t keep up with this state of population growth we’ve seen over the past few years,” he said.
Student money guide
How to pay for school and have a life—a guide for students and parents
Ottawa’s immigration targets could rebalance the youth labour market
But Desjardins also finds that it’s these young international students, or the children of recently arrived workers now old enough to enter the labour force themselves, who are disproportionately struggling to find work today, compared to those born in Canada.
The Liberal government has enacted plans to slow the pace of population growth and limit the number of non-permanent residents in future years. Desjardins’ economists say that these targets, if achieved, would help to bring supply and demand back into better balance in the youth labour market.
“Reducing the number of youth through tightening immigration both in international students and other newcomers should soften the blow a little bit and help the youth that are still here find the jobs that are available to that age cohort,” Norman said.
Digital shift and automation squeeze youth opportunities
But other aspects of the modern economy are also conspiring to put pressure on young workers.
The rise of the gig economy—app-based and often precarious work—comes with barriers aimed at the youngest workers, Desjardins notes in the report. Age restrictions on these apps can limit participation to those aged 18 and older. As a result, Normand said, kids who previously got paid for doing chores like walking dogs in their neighbourhood may be increasingly shut out from that early work experience due to the digital shift. “My youngest in particular would love to get a job walking dogs, cat sitting, that kind of thing, but at 16, just isn’t eligible,” she said.
The rise of artificial intelligence and generative AI applications could also be creating a barrier. Desjardins cites a Stanford University study published last week that found while core-working-age U.S. workers have so far faced minimal job disruption from AI, youth are starting to see employment losses. Valencia argued that could be the result of fewer entry-level job opportunities.
Norman offers the example of an AI tool that’s good at finding legal case studies for a law firm. If a firm outsources that kind of work, which it normally would give to a young clerk, that can frustrate aspiring lawyers’ efforts to get a foot in the door.
Whether youth unemployment starts to recover from here could depend on where the wider economy heads next, Valencia said.
Coordinated action needed to support youth employment
As the economy continues to strain under the weight of U.S. tariffs and broader trade uncertainty, surveys from the Bank of Canada show businesses are reining in their hiring intentions.
Valencia said such shifts tend to have a pronounced effect on youth, who are often first to feel an economic contraction in their job prospects. He said if Canada secures a new trade deal with the United States in the coming months, or if Ottawa finds other ways to restore certainty and encourage business investment, that could open up opportunities for youth again.
Norman said if youth are unable to get work experience in their teenage years, they may be forced to fund their post-secondary education solely with debt, hampering their future financial prospects. She called for a co-ordinated response from provincial and federal governments to support the transition of young people from high school to the workforce, the trades, or future schooling.
“This is the future of our labour force right here,” Valencia said. “And if they’re restricted from, or they’re hampered by, the lack of job opportunities and the lack opportunities for career development, that has a lot significant structural effects on the economy looking towards the future.”
Newsletter
Get free MoneySense financial tips, news & advice in your inbox.
Read more news:
- When markets soar, don’t let FOMO take over
- Stock news for investors: Big banks see third-quarter profit growth
- Banking with a credit union can save on fees—but there are limitations
- Nvidia beats revenue expectations in Q2, but fears of a tech bubble persist
The post “Generation screwed”? Youth job market shows signs of crisis appeared first on MoneySense.