Youth unemployment crisis could cost Canada billions

Youth unemployment to cost the Canadian economy $18.5 billion by 2034 if not effectively addressed, according to a report by the company Deloitte

Youth unemployment in Canada has surged to 14.2 per cent, the highest it’s been in a decade, according to a recent report by Deloitte, commissioned by King’s Trust Canada. The report highlights that over 850,000 Canadians aged 15 to 29 are unemployed and lack post-secondary education or training, a gap that could cost the Canadian economy $18.5 billion in GDP by 2034 and over $5 billion in lost government revenue.

Beyond economic consequences, the report outlines significant social costs. Youth who experience long-term unemployment are more likely to face mental health challenges and reduced quality of life.

King’s Trust Canada, a charity founded by King Charles III, aims to tackle barriers to youth employment. The organization provides free skills training, networking opportunities and work experience to help young people prepare for the workforce. 

King's Trust CEO Farah Mohamed discussed the report's findings and potential implications for the future of Canada's youth and workforce.

"We can't afford to give up $18.5 billion to our GDP . . . we also have to look at the loss of government revenue. Over the next ten years, the government could be giving up $5 billion and just those two numbers alone combined with the fact that if you do nothing you're gonna lose 226,000 jobs . . . these are the data points that I think should wake people up," said Mohamed.  

Mohamed also emphasized the normalized disparity in youth unemployment. “Youth unemployment is twice that of adult unemployment. It’s always been that way, but it’s not acceptable,” said Mohamed.

The report attributes the rising youth unemployment rate to a shortage of job opportunities. Mohamed notes that many entry-level position now require applicants to have an undefined degree and several years of prior experience, further creating challenges for young people to enter the workforce.

Younger people, particularly those seeking their first jobs with little to no prior experience, are facing the greatest challenge. In October 2024, Statistics Canada reported that the unemployment rate for Canadians aged 18 to 24 in October stood at 12.8 per cent, more than double the 5.4 per cent for adults aged 25 and older.

Mohamed said the employment gap is also driven by a lack of skills development. “Employers don’t have time to teach skills like resiliency, teamwork, creativity and communication, but they expect young people to have them,” said Mohamed.

Additionally, the report states that vulnerable groups, including individuals with disabilities, Indigenous peoples and racialized communities, face even higher unemployment rates.

Mohamed said addressing youth unemployment requires collaboration between governments and corporations. She called on the government to incentivize employers to hire young workers, update employment laws to reflect today’s job market and apply a youth-focused lens to policy decisions.

"The King's trust can do its work. But the report calls for all of us to do things differently," said Mohamed.

Mohamed also called for corporations to be a part of the solution.

"There's a need for corporations to really try to remove all the barriers that they put up for young people that prevent them from gaining the experience they need to build their careers," she said.

Nimra Rizvi, a fourth-year political science student at McMaster, shared their perspective on the challenges of youth unemployment. "Minimum wage jobs that you could have gotten so easily in high school are so competitive now," said Rizvi.

Rizvi also pointed out the challenges of securing a job after graduating. "Growing up, you were told that a bachelor's degree would be enough to get you started in whatever field. But now you need a master's degree, you need more postgraduate education in order to get a job position," said Rizvi.

For students struggling to find current and future employment, the McMaster Student Success Centre provides support through career counselling. This service offers students the opportunity to work with career counsellors to develop effective job search strategies and create future plans, equipping them with the tools they need to thrive in their professional journey.

The Student Success Centre also offers workshops on financial literacy and hosts job fairs throughout the school year, providing students with opportunities to enhance their financial skills and connect with potential employers.

For more information on the report, visit the King's Trust Canada website.