A new study from the Fraser Institute reveals that Canada's youth unemployment rate has surged to 13.8% in 2025, marking the largest three-year increase on record outside of a recession. This comes despite the federal government's spring mini-budget touting economic resilience.
Record Increase in Youth Joblessness
The study, authored by Philip Cross, found that the youth unemployment rate climbed from 10% in 2022 to 13.8% in 2025. In 2025, approximately 437,000 young Canadians aged 15 to 24 were actively seeking work but unable to find employment, a 57% increase from 290,000 in 2022.
Unprecedented Duration of Unemployment
Unemployed youth also experienced the longest average duration of joblessness since data collection began in 1976. Cross described the situation as a crisis, warning of serious long-term consequences for those unable to secure work early in their careers.
Widening Gap Between Youth and Adult Unemployment
The gap between youth unemployment (13.8%) and adult unemployment (5.7%) reached 8.1 percentage points, the second-highest on record—only surpassed by the 9.6-point gap during the 1982 recession. For teenagers aged 15 to 19, the unemployment rate hit 19.5%, near record highs outside the COVID-19 pandemic.
Comparison with the United States
Canada's youth unemployment rate has consistently exceeded that of the United States since 2015. In 2025, Canada's rate of 13.8% was 3.8 percentage points higher than the U.S. rate of 10%, marking the largest gap outside of the pandemic and the 1990s.
Affected Sectors
Job losses were concentrated in retail trade, accommodation, and food services, which account for 70% of youth employment. These sectors have been particularly hard hit by economic shifts.
Policy Factors Behind the Rise
The study attributes the dramatic increase in youth unemployment to federal and provincial policies, including the previous government's decision to significantly boost immigration, increasing the supply of young workers, and simultaneous minimum wage hikes in most provinces, which reduced demand for labor.
Cross emphasized that the surge is a homegrown problem, urging policymakers in Ottawa and provincial legislatures to review policies exacerbating the issue. Statistics Canada data for March 2025 confirms the youth unemployment rate at 13.8%.
