In recent years, Canada has witnessed an unprecedented surge in youth unemployment for an economy not in recession. According to a new report by the Fraser Institute, authored by Philip Cross, the number of unemployed youth aged 15 to 24 soared to 437,000 in 2025, a 57% increase from 290,000 in 2022. The youth unemployment rate jumped from 10.0% in 2022 to 13.8% in 2025, reversing a long-term downward trend that began in the early 1990s.
Exceptional Nature of the Surge
The report highlights several exceptional aspects of this rise. First, the 10% youth unemployment rate in 2022 was the lowest on record since the Labour Force Survey began in 1976. The rapid increase since then is without precedent in a growing economy. For teenagers, the increase has exceeded those during the recessions of 1981, 1990, and 2008. Youth joblessness is now at levels typically associated with severe recessions, and the gap between youth and adult unemployment rates is near a record high.
Longer Unemployment Spells
Young people are also experiencing longer periods of unemployment, while the average duration for adults has remained relatively stable. In 2025, youth accounted for more than a quarter of all unemployed Canadians, nearly double their share of the working-age population.
Canada-Specific Issue
Unlike Canada, the U.S. youth unemployment rate remains near historic lows, suggesting that global factors like artificial intelligence or telework are not to blame. The report also dismisses the myth that young people lack necessary skills, noting that youth employment has grown robustly in regions with strong economies, such as Alberta, where youth employment rose faster than for adults between 2022 and 2025, with a 15.6% increase for teenagers. Alberta's minimum wage of $15 per hour, the lowest in Canada, is cited as a contributing factor.
Government Policies at Fault
The report attributes the surge in youth unemployment primarily to government policies that expanded labour supply while hindering market adjustments. Ottawa raised immigration quotas after 2020, particularly for non-permanent residents, and loosened restrictions on foreign students' work hours. This increased labour supply put downward pressure on wages. Normally, falling wages would stimulate demand and rebalance the market, but this adjustment was blocked by higher minimum wages across all provinces. On average, governments more than doubled the minimum wage over the past two decades. Since young workers typically have lower productivity, higher minimum wages disproportionately reduce their job opportunities.
