Job Junction, an employment and career resource centre in Halifax. High youth unemployment can inflict serious generational damage, research shows.Maria Collins/The Globe and Mail
Claude Lavoie is a contributing columnist for The Globe and Mail. He was director-general of economic studies and policy analysis at the Department of Finance from 2008 to 2023.
Last Friday, labour-force statistics showed the unemployment rate held steady at 7.1 per cent in September and the youth jobless rate rose to 14.7 per cent. The difficulty young Canadians face in finding jobs drew considerable attention this summer. Commentators noted it was the worst youth unemployment rate in decades (outside the pandemic), blaming high temporary immigration levels, artificial intelligence and U.S. tariffs. Both Conservative Leader Pierre Poilievre and B.C. Premier David Eby said they want to scrap the temporary foreign worker program because it shuts young people out of jobs.
But Canada’s high youth unemployment is primarily a business-cycle phenomenon. It has little to do with a greater number of immigrants or older workers clinging to their jobs. Rather, it reflects how the school-to-work transition works – or doesn’t.
The youth unemployment rate has remained at between two and 2.5 times that of adults, consistent with historical patterns. Outside the pandemic, the last time the overall jobless rate was this high was almost a decade ago. This employment gap between young people and adults is seen well beyond Canada’s borders. In the United States and most European countries, youth unemployment rates similarly hover at more than double those of adults, reflecting the structural challenges young people face when transitioning from school to work.
In times of financial difficulty or layoffs, workers with less experience or who were hired last – most often young people – are the first to go. The youth unemployment rate remains higher than the adult rate even in times of economic prosperity because of normal turnover in the labour force. New jobs constantly open at some companies while disappearing in others. This has nothing to do with the type of occupation or industry: It’s the usual loop of needing experience to gain a stable job, but needing a stable job to get experience.
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High youth unemployment inflicts serious generational damage. Research shows that being unemployed at a young age negatively affects mental health, increases crime rates and leads to lower lifetime earnings. Persistent difficulties in finding work also delay young people’s ability to reach independence and can leave them disillusioned with society. Bringing youth unemployment closer to adult levels represents a worthwhile policy goal – and an achievable one.
Some countries have demonstrated success. Germany and Japan, for example, maintain much narrower gaps between youth and adult jobless rates because of better management of the school-to-work transition. They have stronger linkages between general and vocational training and workplace experience, personalized career guidance, and incentives encouraging collaboration among businesses, labour organizations and educational institutions.
The German dual vocational-training system, or Ausbildung, combines practical, on-the-job training at a company with theoretical instruction at a vocational school. Japan’s success lies in the Jisseki-Kankei system, designed to build a strong trust relationship between schools and companies.
Because of historical, cultural and institutional differences, Canada cannot directly import these systems but can draw inspiration from them. Federal and provincial governments have invested large sums in work-integrated learning, and many Canadian postsecondary institutions offer internships or co-op programs. But there are many challenges faced in developing these programs.
Educational institutions must devote considerable effort to establishing and maintaining good relationships with employers, which is challenging in a context where these institutions are increasingly financially strapped and where faculty members aren’t rewarded for doing so. Institutional constraints also hinder educational institutions from developing innovative programs.
Ratio of youth to adult unemployment rate
Selected countries, July, 2025
the globe and mail, Source: oecd
Ratio of youth to adult unemployment rate
Selected countries, July, 2025
the globe and mail, Source: oecd
Ratio of youth to adult unemployment rate
Selected countries, July, 2025
the globe and mail, Source: oecd
Providing good training opportunities for interns is costly to employers, who often lack the human resources to provide adequate supervision and training. Employers are also reluctant to invest time and money in someone who, after graduation, could work for a competitor. And if they pay less than other employment, students may not be able to afford taking part in these internship programs as they need to make enough money to pay for food, rent and tuition.
Some students (and parents) still see vocational training as a second-best option to a university degree. Some students also face important barriers in pursuing education and understanding all the various potential vocational and educational options.
Addressing these challenges and creating a more seamless and inclusive transition for Canadian youth into the work force won’t be easy. It will require stronger collaboration between the various social partners, more support for youth at risk, strengthening some existing government programs, creating new ones and changing some employer and educational-institution incentives. Easier said than done, but an investment in the future that will pay in spades.