The Future of Work and Learning Brief
Issue #54 | August 2025

Summer intern Julien Côté wrote this edition of The Future of Work and Learning Brief on youth unemployment. Julien is a Loran Scholar and has just completed his work term before he returns to the University of Waterloo for his second year studying mathematics.

The CWF team thanks Julien for joining us in Calgary for one of our most interesting summers yet, as the city supported hosting the G7 in Kananaskis. We would also like to thank the Canada Summer Jobs Program and the Loran Scholars Foundation for their continued support of our summer intern program.

Youth unemployment amid labour shortages

Canadian youth face a paradoxical workforce challenge: for those aged 15-24, unemployment is at its highest rate since the 1990s (14.2 per cent as of June 2025), yet employers across the country report labour and skill shortages. Summer job postings are down 22 per cent in Canada compared to last summer.

Youth unemployment is the “canary in the coal mine,” which foretells larger-scale workforce pressures. Summer jobs are the first rung of career development that builds the workforce companies desperately need. As for long-term career development, the disappearance of these entry-level jobs means the first level of experience for youth is eroding. Solving this paradox requires rebuilding Canada’s entry‑level experience pathways through modern apprenticeships and jobs that let youth earn and learn at the same time.

Snapshot

Youth unemployment has steadily ticked upward. In the last three years, while unemployment has increased by about two percentage points for 25–54-year-olds, unemployment for 15- to 24-year-olds has increased by four percentage points, from 10.3 per cent in July 2023 to 14.6 per cent in July 2025.

Source: Statistics Canada Table 14-10-0287-01

Youth also suffered a net employment loss of 28,000 jobs in April, with young women most affected. For returning students (those typically looking for summer/internship roles), unemployment is even higher at about 17.4 per cent in June 2025, up from 15.8 per cent in June 2024 and 10.2 per cent in June 2022.

In May, job listings for summer camp positions, “typically the largest single category of summer job ads,” were down 32 per cent. Other seasonal positions, such as lifeguards, painters, customer service and manual labour positions, are also in decline.

At the same time, 44 per cent of small- and medium-sized enterprises (SMEs) report that a shortage of skilled labour limits their ability to increase sales or production and 54 per cent struggle to attract applicants. Nearly half of SMEs (47 per cent) say they face a mismatch between applicants’ skills and the specific requirements of open roles. A majority of Canadian companies (77 per cent) report major challenges in finding qualified workers, an improvement from 2024, but still almost double the pre-pandemic rate. The Canadian Federation of Independent Business (CFIB) reports that 69 per cent of SMEs find the lack of applicants available in their sector a challenge in recruiting workers.

Digitalization & automation

Because digitalization, automation and AI are taking on routine tasks, entry-level roles now demand higher skills, raising baseline qualifications for many jobs. Workers will need to acquire new skills or deepen existing ones to keep up with the pace of technological change. Approximately 27 per cent of jobs in OECD countries are at high risk of automation.

This shift is particularly troubling for young Canadians: 42 per cent of tasks within roles commonly held by youth are at risk of automation in Canada. Traditional entry-level pathways such as retail and food service have become increasingly automated. The bar to workforce entry is rising, but training, apprenticeship and career guidance systems have not kept pace. Unless Canada expands access to skill-building programs in technical, digital and cognitive domains, youth risk being excluded from the future of the workforce before they even enter it.

Pandemic widened the experience gap

A critical factor in the growing disconnect between youth job seekers and entry-level roles is the erosion of pre-COVID experience pathways such as volunteering, community work, part-time roles and youth hiring programs that once provided essential skills, readiness and opportunities. Now, the same level of preparation or experience is expected by employers, but fewer young Canadians are meeting it.

For example, Canada-wide volunteering hours dropped 28 per cent between 2018 and 2023, with formal volunteering rates falling from 41 to 32 per cent. As a direct effect of this, 55 per cent of Canadian charities report they have fewer volunteers compared to pre-pandemic levels. Canada West Foundation surveys found youth in Alberta, Manitoba, Vancouver and Toronto are more disengaged and pessimistic about their ability to thrive.

Economic & retail contraction

The retail sector typically hires more workers during the summer for seasonal positions, which include a large number of students. Recent economic pressures, such as tariffs, have caused many retailers to scale back plans to hire more workers to stay financially viable. One notable Canadian example: Hudson’s Bay recently shuttered its doors, resulting in the loss of over 8,000 retail positions.

Sectors closely connected to imports/exports, such as retail, which provide nearly 29 per cent of student jobs, are most trade-exposed. As Santo Ligotti, VP at the Retail Council of Canada, observes: “Retailers, especially those that rely on imported goods — they face higher costs. Many could delay hiring plans amid that uncertainty.” As the number of retail positions contract, more experienced workers enter the job market, which can displace less-experienced youth and students and lead to long-term scarring effects.

Rethink apprenticeship

Countries with integrated Vocational Education and Training (VET) models — part-time classroom instructions combined with part-time paid workplace training or apprenticeship — such as Switzerland, Germany and the U.K., typically have more stable youth employment during economic shocks. In the aftermath of 2008’s Great Recession, experts identified apprenticeship as a method to prevent future instability in times of disruption for youth; it could “pay a double dividend” as youth are more readily able to make the transition from education to employment while lowering labour costs due to employer training commitments.

The United Kingdom adopted a VET model after the 2008-2009 recession with the passage of the Apprenticeships, Skills, Children and Learning Act 2009. The legislation required that by 2013, “an apprenticeship place [would be provided] to all qualified young people (aged 16-19) who did not have one and wanted one.” After the act came into effect, unemployment rates rapidly decreased.

During the pandemic, youth employment in Switzerland and Germany held steady compared to other countries, primarily due to their extensive VET system. Unemployment among youth aged 15 to 24 in Canada tripled between February and May 2020, from 10.7 per cent to 30.3 per cent.

Source: ILO Modelled Estimates database (ILOEST) https://data.worldbank.org/indicator/SL.UEM.1524.ZS

Canada lacks a comparable system to these countries, which helps to explain why youth suffered more during these economic disruptions. Strengthening youth apprenticeships — especially outside of traditional trades — could offer a two-fold solution: helping young people transition from school to work while addressing labour shortages and youth unemployment.

Underutilization of immigrant talent

Temporary Foreign Worker (TFW) programs are designed to address acute labour shortages, especially in sectors struggling to find local workers. However, recent changes to the program have raised concerns that it fills gaps that could otherwise offer young Canadians entry-level experience. In 2022, the temporary foreign worker program raised the percentage of employees who can be low-wage TFWs from 10 to 30 per cent. Some economists have suggested that these changes could be a potential factor contributing to Canadian youth struggling to find jobs.

There were more TFW food service and retail positions — sectors that have traditionally employed youth — in 2022 than there were before the pandemic. With the curbing of these changes and more restrictions, there has been a modest rebalancing toward roles that typically attract fewer young workers, but food service and counter positions still maintain a high proportion of TFWs.

At the same time, increases in other permanent residence immigration streams, such as family reunification, asylum seekers and refugees, have contributed to a broader pool of newcomers entering the labour market. Many of these individuals may take on entry-level positions as “survival” jobs while they determine how best to integrate into the workforce or upgrade skills.

Source: S. Laverty calculations, IRCC Open Data

Source: S. Laverty calculations, IRCC Open Data

Canada’s prosperity has long relied on immigration. Similar to recommendations for youth, there are also better supports needed for economic integration across all immigration streams so that immigrant talent is not underutilized. Incorporating credential recognition, mentorship and career pathway supports could help newcomers transition more easily from survival to positions in which they can thrive.

What’s being done

Federal level

The federal government has primarily focused on short-term youth employment support, notably through the Canada Summer Jobs (CSJ) and Youth Employment and Skills Strategy (YESS) programs.

In the 2024 budget, the federal government pledged $351.2 million to support 90,000 youth work experiences and employment support opportunities in 2025-26. In June 2025, the federal government announced an additional $25 million invested to create up to 6,000 more spots in the Canada Summer Jobs program for young people. The release also said CSJ was on track to create 70,000 jobs for youths  in the summer of 2025.

Federal programs like these are known to have a tangible and positive impact on the workforce. Since 2019, Canada Summer Jobs has supported employers by funding more than 460,000 job opportunities for youth. In 2024, the program surpassed its 70,000 jobs target. Although these benefits are mostly short term, they do have long-lasting positive impacts on morale. In a survey of Canada Summer Jobs youth participants for 2024, 92 per cent of respondents reported having gained confidence in multiple skills needed for future employment. Additionally, 85 per cent of respondents said that they were optimistic about their future employment prospects.

While summer programs perform well, year-round youth employment remains unstable, especially for those not eligible or during off‑peak seasons. We need a better, long-term, holistic approach, which is where apprenticeships come in.

Provincial level

Apprenticeships are tightly linked to both education systems and regional labour markets, both areas of provincial responsibility. As a result, there is no national apprenticeship strategy and Ottawa’s role is often limited to indirect support or funding partnerships. This is where the provinces step in. Western Canadian provinces — British Columbia, Alberta, Saskatchewan and Manitoba — each have their own designated high school apprenticeship program for skilled trades. Alberta — which has asserted that expanding its apprenticeships is a key initiative — has begun funding apprenticeship-style learning beyond the skilled trades as well. The province invested $6.4 million in 2021 with the goal of supporting “the development and delivery of 13 pilot programs that tested application of apprenticeship-style learning in occupations beyond the skilled trades.”

In 2023, every province except Quebec saw an increase in apprenticeship registrations, marking a strong recovery from the lows recorded in 2020 at the height of the pandemic. Most provinces returned to or exceeded their 2019 pre-pandemic levels, proof that with targeted action, change is possible. Yet this recovery remains uneven, and Canada still lags in apprenticeship uptake and youth experience integration. What’s needed now is not just recovery, but redesign.

Recommendations

  • Expand apprenticeship to more closely resemble the Swiss and German VET models, which will improve the education-to-workforce transition.
  • Strengthen youth experience pathways.
    • Rebuild youth volunteering/internship programs, especially those integrated with high school and community organizations.
    • Reintroduce or strengthen mandatory volunteer hours in high schools.
    • Fund employer-student micro placements to help rebuild soft skills capacity.
    • Subsidize youth experience-block programs like Canada Summer Jobs to include training components, not just labour opportunities.
    • Expand co-op/internship funding, especially in sectors in need.
  • Broaden credential recognition, bridging programs and mentorship programs for newcomers to create more opportunities in careers and support quicker transition from survival jobs.
  • Increase targeted wage subsidies or hiring incentives for youth.
  • Create regional job creation programs tied to youth employment targets.
  • Encourage more public/private partnerships for entry-level skills training.
  • Re-evaluate entry-level jobs.
    • Assess and reform the structure of entry-level jobs to make them more accessible and enticing to youth by making sure they offer meaningful experience, fair wages and career pathways.

The Future of Work & Learning Brief is compiled by Jeff Griffiths and Stephany Laverty. Through this monthly brief, keep on top of developments in the workforce and how education and training are changing today to build the skills and competencies needed for the future.