Something troubling is happening in Canada’s labour market, and it’s not getting nearly enough attention. Youth unemployment has quietly climbed to levels we normally only see during recessions even though, by the technical definition, Canada is not in one.
According to a new report from Desjardins, youth unemployment has shot up from 10 per cent in 2022 to 14 per cent by mid-2025. For teenagers, the picture is even bleaker: nearly one in five want a job but can’t find one. That means an entire generation is entering the workforce and being told there’s no room for them.
Yes, unemployment among young adults aged 20 to 24 has also risen from nine to 11 per cent but it’s teenagers who are bearing the brunt of this crisis. And while it’s true that youth unemployment has always been higher than the rate for older workers, the gap is widening at an alarming pace.
This should worry us all. Historically, every major surge in youth unemployment has coincided with a recession. This time, though, Canada isn’t technically in one. That makes today’s numbers even more unsettling because it suggests structural problems in our labour market, not just a short-term economic dip.
Part of the problem is demographics. Canada’s population of young, temporary residents has grown rapidly since the pandemic, which has added pressure to an already tight job market for teens. But that’s not the whole story. Retail long the backbone of youth employment is shrinking as a share of total jobs. In 2022, retail accounted for about 30 per cent of youth employment; by mid-2025, it was under 25 per cent. Add to that the rise of the gig economy where most platforms exclude under-18s and it’s clear many teens are being left out entirely.
Worse still, the jobs that are available are increasingly precarious. Contract work, part-time positions, and gig jobs dominate the youth labour market. More than 40 per cent of self-employed youth are gig workers, compared with just 26 per cent of older workers. That’s not a recipe for stability, career growth, or long-term prosperity.
The danger here isn’t just a few lost paycheques. Youth unemployment has ripple effects. A weak start in the labour market often means lower lifetime earnings, delayed independence, and greater reliance on social safety nets. In other words, this isn’t just a “teen problem.” It’s an economic problem.
Policymakers and employers need to treat this as a warning signal. If we fail to create meaningful entry points for young people into the workforce, we risk building a two-tier labour market: one where older workers can still find stable jobs, and another where younger Canadians are shut out or stuck in endless gig work.
Canada prides itself on resilience, but the numbers tell us that resilience isn’t being shared equally. If we ignore this youth unemployment crisis, we’ll be paying the price for decades.
