Key Takeaways
- Youth unemployment in Canada rose to 14.6% in July 2025, the highest rate recorded since 2010 excluding pandemic periods.
- Youths accounted for 34,000 of the 41,000 total job losses in July 2025, highlighting their disproportionate vulnerability.
- Provincial disparities are stark: Alberta’s youth unemployment reached 20%, while Ontario faces an urban employment crisis.
- Sectors such as information, culture, recreation, and construction saw sharp declines, reducing traditional entry points for young workers.
- Investors are advised to monitor impacts on GDP growth and consumer demand, particularly in youth-dependent sectors.
Canada’s youth unemployment rate climbed to 14.6% in July 2025, marking its highest point since September 2010 outside of pandemic disruptions, according to data from Statistics Canada. This surge underscores deepening challenges in the labour market, particularly for those aged 15 to 24, and raises broader questions about economic resilience amid slowing growth and policy shifts.
The Escalating Challenge of Youth Joblessness
As of July 2025, employment in Canada contracted by 41,000 positions, a 0.2% decline, with the national unemployment rate holding steady at 6.9%. However, the burden fell disproportionately on younger workers, who accounted for 34,000 of those lost jobs. This pushed the youth unemployment rate to 14.6%, a level not seen in over a decade excluding the extraordinary circumstances of 2020. Historical trends from Statistics Canada indicate that youth unemployment has hovered between 10% and 12% in non-recessionary periods over the past two decades, making this uptick particularly alarming.
The implications extend beyond immediate job losses. High youth unemployment often signals structural issues in the economy, such as mismatches between skills and available roles, or broader slowdowns in sectors that traditionally absorb entry-level workers. In July, significant declines were reported in industries like information, culture, and recreation (down 29,000 jobs) and construction (down 22,000). These sectors are key employers of young Canadians, many of whom enter the workforce through seasonal or part-time positions. The data suggests a cooling labour market, where permanent roles are vanishing, and growth is confined to niche areas like transportation and warehousing.
Sectoral Breakdown and Regional Variations
A closer examination reveals uneven impacts across provinces. Alberta, for instance, recorded a youth unemployment rate of 20% in July 2025, the highest among Canadian provinces, as per Statistics Canada figures. This spike coincides with broader economic pressures in resource-dependent regions, where fluctuations in commodity prices exacerbate job instability. Ontario, meanwhile, faces what analysts describe as a “youth employment emergency,” with policy think tanks like the Canadian Centre for Policy Alternatives highlighting overlooked crises in urban job markets.
- Construction sector: Lost 22,000 jobs nationally, reflecting a slowdown in housing starts and infrastructure projects amid high interest rates.
- Information and recreation: A 29,000 job drop, potentially linked to reduced consumer spending on discretionary activities.
- Youth-specific trends: Among young men, unemployment rose to 16.0%, a 1.3 percentage point increase from June, signalling gender-specific vulnerabilities in manual and service-oriented roles.
These patterns are not isolated. Historical data from Trading Economics shows that Canada’s youth unemployment rate averaged around 12.5% from 1991 to 2025, with peaks during recessions in the early 1990s and 2008–2009. The current elevation to 14.6% echoes those downturns, prompting investors to monitor for signs of a broader contraction.
Economic Ramifications and Investor Considerations
From an investor’s perspective, elevated youth unemployment poses risks to consumption-driven growth. Young workers, often with lower savings and higher spending propensities, form a critical segment of domestic demand. A prolonged period of joblessness could suppress retail sales, real estate activity, and overall GDP expansion. Forecasts from analyst models, such as those by Bloomberg economists, suggest that if youth unemployment remains above 14% through the end of 2025, Canada’s GDP growth could be trimmed by 0.3 to 0.5 percentage points annually, based on historical correlations.
Moreover, this trend intersects with demographic shifts. Canada’s population grew by approximately 97,000 in August 2025, largely driven by immigration in the 15–24 age bracket, yet job creation lagged with only 22,100 net additions that month. This mismatch amplifies competition for entry-level positions, potentially leading to wage stagnation and reduced productivity. Investors in consumer-facing sectors, such as retail and hospitality, should brace for margin pressures if disposable incomes among young adults continue to erode.
Sentiment among economists, as reported by Reuters, leans towards caution, with many viewing the July data as evidence of a softening labour market rather than a full recession. However, the youth segment’s distress could accelerate calls for monetary policy easing. The Bank of Canada has already signalled potential rate cuts, but persistent inflation may delay relief. Analyst-led projections from firms like TD Economics anticipate the national unemployment rate could edge up to 7.2% by year-end if youth trends persist, influencing bond yields and equity valuations in rate-sensitive industries.
Policy Responses and Long-Term Outlook
Government initiatives aimed at youth employment have gained urgency. Programs focusing on skills training and apprenticeships, as outlined in recent federal budgets, seek to address skill gaps exacerbated by rapid technological change. Yet, critics argue these measures fall short amid an influx of temporary foreign workers, which some analyses link to suppressed entry-level opportunities. A report from the Canadian Centre for Policy Alternatives in June 2025 warned of a “deepening youth employment emergency,” urging targeted interventions in high-unemployment provinces.
Looking ahead, model-based forecasts from MacroTrends project youth unemployment could stabilise around 13% by mid-2026 if economic conditions improve, assuming a rebound in construction and services. However, downside risks remain if global headwinds, such as trade tensions or energy price volatility, intensify. Investors might consider diversifying into resilient sectors like technology and healthcare, which have shown relative stability in absorbing younger talent.
Comparative Global Context
Canada’s youth unemployment woes are not unique but stand out in the G7 context. For comparison, the United States reported a youth unemployment rate of around 11.7% in July 2025, per U.S. Bureau of Labor Statistics, buoyed by stronger service sector recovery. In contrast, European nations like Germany maintain rates below 7% through robust vocational training systems. This disparity highlights potential policy lessons for Canada, where enhancing education-to-employment pipelines could mitigate long-term scarring effects on young workers’ earnings potential.
In summary, the 14.6% youth unemployment rate in July 2025 serves as a stark indicator of labour market fragility, with ripple effects on economic growth and investment strategies. While not yet signalling a recession, it demands vigilance from policymakers and investors alike, lest temporary setbacks evolve into entrenched challenges.
| Metric | July 2025 Value | Change from June | Historical Context |
|---|---|---|---|
| Youth Unemployment Rate | 14.6% | +0.4 percentage points | Highest since Sept 2010 (ex-pandemic) |
| National Unemployment Rate | 6.9% | Unchanged | Steady since June |
| Job Losses | 41,000 | N/A | Largest decline since Jan 2022 |
| Youth Job Losses | 34,000 | N/A | Concentrated in 15-24 age group |
References
- Statistics Canada. (2025, August 8). Labour Force Survey, July 2025. https://www150.statcan.gc.ca/n1/daily-quotidien/250808/dq250808a-eng.htm
- Statistics Canada. (2025, July 11). Labour Force Survey. https://www150.statcan.gc.ca/n1/daily-quotidien/250711/dq250711a-eng.htm
- Trading Economics. (2025). Canada Youth Unemployment Rate (1991–2025). https://tradingeconomics.com/canada/youth-unemployment-rate
- Trading Economics. (2025). Canada Unemployment Rate. https://tradingeconomics.com/canada/unemployment-rate
- MacroTrends. (2025). Canada Youth Unemployment Forecast. https://www.macrotrends.net/global-metrics/countries/CAN/canada/youth-unemployment-rate
- Canadian Centre for Policy Alternatives. (2025, June). Youth unemployment is approaching a boiling point in Ontario. https://www.policyalternatives.ca/news-research/youth-unemployment-is-approaching-a-boiling-point-in-ontario/
- Global News. (2025, August). Canada Jobs Report: July Unemployment Rate. https://globalnews.ca/news/11323751/canada-jobs-report-july-unemployment-rate/
- The Economic Times. (2025, August). Canada loses 41,000 jobs in July; youth unemployment hits 14-year high. https://economictimes.indiatimes.com/news/international/canada/canada-job-report-news-economist-pm-mark-carneys-big-shock-canada-loses-41000-jobs-in-july-as-youth-unemployment-hits-14-year-high/articleshow/123194611.cms
- CTV News Edmonton. (2025, August 8). Youth unemployment in Alberta hit 20% in July. https://www.ctvnews.ca/edmonton/video/2025/08/08/youth-unemployment-in-alberta-hit-20-in-july-stats-canada/
- Straits Times. (2025). Canada’s youth face deepening job crisis. https://straitstimes.com/world/just-being-ghosted-canadas-youth-face-deepening-job-crisis
- Agilus. (2025). July Labour Report: Slower Conditions and Strategic Choices for Employers. https://agilus.ca/clients/blogs-and-insights/july-labour-report-slower-conditions-and-strategic-choices-for-employers
- X (formerly Twitter) accounts: Unusual Whales, The Kobeissi Letter, Kirk Lubimov, Mr Stache, Greg McLean.
