'We’ve never seen their labour market situation deteriorate so rapidly,' says expert
A new study published by the Fraser Institute links Canadian government policies to a sharp rise in youth unemployment, warning the situation could have lasting consequences for an entire generation of workers.
The commentary, written by Fraser Institute senior fellow Philip Cross, found that 437,000 Canadians aged 15 to 24 were unemployed in 2025 – a 57% increase from 290,000 in 2022.
The youth unemployment rate climbed from 10.0% to 13.8% over the same period.
Cross noted that the 2022 rate had been the lowest on record since Statistics Canada’s modern Labour Force Survey was introduced in 1976, marking a reversal of a decades-long downward trend. He added that for teenagers, the increase since 2022 has surpassed those recorded during the recessions of 1981, 1990, and 2008.
“We’ve never seen their labour market situation deteriorate so rapidly and diverge so markedly from what adults are experiencing,” Cross wrote, describing the conditions as a “crisis” that could leave lasting scars on young workers.
Jobless spells lengthen for young workers
The study also found that unemployment spells among young Canadians are lasting longer, even as the average duration of adult joblessness has remained largely unchanged. By 2025, young people accounted for more than one-quarter of all unemployed Canadians – nearly double their share of the working-age population.
Cross pointed to two government policy areas as primary drivers of the problem. The first was immigration. After 2020, Ottawa raised immigration quotas, particularly for non-permanent residents, and loosened restrictions on the work week of foreign students, increasing labour supply and putting downward pressure on wages.
The second was minimum wage legislation. Cross argued that when provinces raised minimum wages, the normal market adjustment of falling wages stimulating labour demand was blocked. Governments have more than doubled the minimum wage on average over the past two decades.
“Because young workers typically have lower productivity than workers who have been on the job longer, higher minimum wages disproportionately reduce their job opportunities,” Cross wrote.
The effect, the study noted, has been most visible in retail trade and accommodation and food services – the two largest employers of young people and the heaviest users of minimum-wage workers. Both industries continued to hire more adults during the same period.
Cross noted regional contrasts as well. In Alberta, where the minimum wage of $15/hr is the lowest in Canada, youth employment rose faster than adult employment between 2022 and 2025, including a 15.6% increase among teenagers.
The federal government has acknowledged the problem. In fall 2025, Employment and Social Development Canada launched an online engagement titled “Building Canada Strong: Youth in the Labour Market,” in which young Canadians identified a lack of entry-level jobs as the top barrier to finding work. As of April, the government announced it would create 175,000 jobs and skills-building opportunities for youth through 2026.
