As Canada's young people continue to grapple with a challenging job market, the federal government has laid out its plans to address a crisis that has led to one of the highest youth unemployment rates in more than a decade.
The plan aims to promote employment and summer jobs for students, and increase investment in job training programs that the federal government says it expects to make it easier for young people to find jobs, including in trade and climate-related sectors.
“Young people, this budget was created for you,” Finance Minister Francois-Philippe Champagne said during a speech on Tuesday before introducing the budget in the House of Commons.
Young people tend to be hit first and hardest when economic conditions are weak. In the years since the pandemic, inflation has risen sharply, driving up the cost of living. Population growth has also increased sharply, especially among the student age group, outpacing the number of jobs available in recent years. although growth has stabilized this year.
“There's a big shift in expectations about what someone's life is going to look like, and that's a huge problem for young people,” said Rob Gilleso, an assistant professor of economic analysis and policy at the University of Toronto.
The country now teeters on the brink of recession as a brutal trade war with the United States leads to layoffs and reduced hiring and investment. And that doesn't bode well for the younger generation, Gilleso added.
“Most recessions are relatively short-lived in duration, but if this recession is caused by Americans essentially pursuing completely wild economic policies that seem intent on hurting our country, the economic damage could be much more lasting,” he said.
“This will have a disproportionate impact on young people.”
Summer vacancies, trade programs for youth
“Overall, when I look at it in this budget, I think they're trying to send a signal that they recognize that young people are being impacted the most right now,” said Rebekah Young, vice-president of Scotiabank Economics.
However, “when we think about this transformation that the Carney government is trying to bring about… I think they're going to have to go deeper in terms of how [are] education and university systems enable young Canadians to enter and stay in the workforce.”
As part of its Student Employment Program, the federal government plans to provide $635.2 million over three years starting in 2026-27 for 55,000 “work-integrated learning opportunities”—mostly job training and short-term placements—for post-secondary students.
He is also proposing $594.7 million over two years for the Canada Summer Jobs program, an initiative he began exploring several years ago and which he says will provide 100,000 jobs for youth next summer.
Among the most targeted proposals is the Youth Climate Corps, a paid skills training program for young people that would “train them to respond quickly to climate emergencies, support recovery, and build resilience in communities across the country.”
However, the program allocates $40 million over two years to Employment and Social Development Canada. It is unclear how many young people will benefit.
The government says it will also commit $307.9 million over two years to a youth employment and skills strategy. The funding will go towards employment, training and other support starting in 2026-27, including mentoring, transition and mental health counselling.
The initiative gives money to various government departments, which then distribute it to programs for young people who face “barriers to employment,” which can include groups such as women and racialized people.
The budget also includes a previously announced plan to pump money into skills training, which is not necessarily aimed at young people but could benefit them.
The portion allocates $75 million over three years to expand union training for the Red Seal trades, a list of designated trades that includes occupations such as carpenters, heavy equipment operators, machinists, machinists and plumbers.
“I think they’ll have to go deeper.”
While the programs could address some of the challenges young people face right now (such as providing a clearer path to entry-level jobs, which some experts fear could be replaced by artificial intelligence), the best thing the federal government can do for young people right now is avoid a recession, Young said.
“We're in a trade war, there's widespread uncertainty. Fortunately, there's no mass layoffs happening, but there's no hiring happening either. So especially young people who are trying to integrate into the labor markets are having a really tough time,” Young said.
“They've just gone through some tough years, including a period where we had explosive population growth that made it very difficult to measure employment. So I think I'm taking this as a signal [that] They’re trying to react.”
Budget provisions aimed at combating youth unemployment make “small promises,” said Paul Kershaw, a professor at the University of British Columbia and executive director of Generation Squeeze, which he said “reinforces” a lack of concern for the problems facing young people.
“I would certainly like to see future budgets try to find a better balance between new dollars later in life and new dollars for young people at this critical time when they are trying to start their careers, start families and make our economy more productive,” he said.
Gen Z graduates ages 15 to 24 are facing the highest unemployment rates the country has seen in decades, not counting the pandemic. CBC's Paula Duhacek looks at what's behind the surge and what it could mean for a generation of Canadians.
The government is sharply cutting back on the hiring of temporary workers, which some economists say has contributed to a youth labor market in which more people compete for fewer jobs. But the uncertainty of the trade war has added another layer of complications.
“In theory this will certainly help, but we also see that jobs are not growing right now because of this uncertainty,” Young said. “So in theory this will remove some of the competition for these jobs, but I would also say the government needs to think: how do we attract young people into other jobs?
“I believe that this [Youth Employment and Skills Strategy] And [the Student Work Placement Program] it could have a more meaningful impact on youth by creating some sort of long-term vision.”
