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Young Canadians looking for a summer job this year suffered through one of the worst employment markets in decades as the country’s sluggish economy takes its toll.

Canadians aged 15-24 are experiencing the highest unemployment rate since 2010, excluding the first years of the Covid-19 pandemic, according to Statistics Canada, the official data agency.

On Friday, Statistics Canada said the youth unemployment “remained high” at 14.5 per cent in August, just 0.1 percentage point below the rate recorded in July, which was the highest since September 2010, excluding 2020 and 2021.

Overall unemployment in August rose slightly but remains steady at about 7. 1 per cent.

Rachel Battaglia, economist at the Royal Bank of Canada, said structural reasons behind the struggling jobs market, such as low productivity and growth, had been exacerbated by the impact of the US upending global trade.

On an annualised basis the Canadian economy shrank 1.6 per cent in the second quarter, Statistics Canada said last month.

“Young workers do tend to bear the brunt of labour market slowdowns,” Battaglia said.

“[They] also tend to be concentrated among a few industries — like retail trade, food, and accommodation . . . This leaves them particularly vulnerable to shocks which disproportionately impact these industries,” she added.

High levels of inflation after the Covid-19 pandemic in mid-2021 led to Canadian consumers cutting spending and the Bank of Canada launching a series of interest rate hikes, forcing businesses to slow hiring as economic confidence deteriorated.

This year, President Donald Trump’s tariffs have hit exports to the US, Canada’s biggest trading partner, and have weakened Canada’s economy and slowed investment.

These employment levels were “typically only seen during recessionary periods and has come in contrast to a surprisingly resilient labour market for other age groups”, said Andrew Grantham, an economist for CIBC.

Economists describe the “scarring effect” on young people who begin their career during an economic downturn. 

Surranna Sandy, chief executive of Skills for Change, a Toronto-based non-profit helping vulnerable groups find work, said young people are struggling with mental health issues, the cost of living crisis and housing affordability pressures.

“We posted an ad for the first 20 of 60 places for a job training programme. We had over 1,100 applicants over four days, they were applying for a job training programme, not even a job,” she said.

Sandy said the sluggish youth jobs market had particularly hit young people who had few qualifications or limited experience, with unemployment levels far higher for young women and marginalised groups. “Black youth, indigenous youth, newcomers, racialised youths, they have real challenges,” she said.

Conservative party leader Pierre Poilievre has blamed the Liberal government’s immigration policy as a key reason for young Canadians struggling to find jobs.

Four in five job losses in July were young workers, according to Desjardin economists, who added “temporary residents since the pandemic has also played a role”, in a report released on Thursday.

Prime Minister Mark Carney on Wednesday told reporters the government’s immigration levels would decline from roughly 7 per cent of the population to about 5 per cent over several years.

“It’s clear that we can improve overall immigration policies. We’re working on that, and we’re setting clear goals to adjust,” he said.

The country’s non-permanent resident population, which includes overseas students and temporary foreign workers, has doubled to just under 3mn from 1.3mn in the second half of 2021, according to a report from Statistics Canada.

The surge in numbers was a result of the previous government’s plan to bring in more labour from overseas to help kick start the economy after the pandemic.

RBC’s Battaglia said the data did not show that foreign workers were taking jobs away from young people and the government had clamped down on issuing new visas since the end of last year.

She added that concerns about technology, automation and the impact of Artificial Intelligence taking graduate or low-skilled jobs were not borne out by the data.

Battaglia said with interest rates expected to come down and US trade set to normalise, youth unemployment may peak by the end of the year and ease in 2026.

“There is light at the end of the tunnel [for young people],” she said. “They just have to hang tight for a little while.”