Canadian Unemployment Surges For Young Adults & Recent Immigrants – Better Dwelling

Canada rapidly scaled its generous immigration policy to fill a surge of vacant jobs. Those vacancies proved to be temporary, but the immigration policies remain largely unchanged. According to Bank of Canada (BoC) data, this is producing higher unemployment and more competition for the remaining jobs. As a result, 1 in 8 recently arrived immmigrants are now considered unemployed. However, the damage doesn’t stop there—Canada’s youth unemployment rate is even higher, as young adults compete for the same entry level roles. 

Canada’s Job Market Is Tightening, Unfilled Jobs See A Sharp Decline

Canada’s job vacancy rate, the share of jobs that are unfilled, surged post pandemic. The job vacancy rate peaked at 5.7% around March 2022, and has since fallen to 3.4% as of May 2024. That’s a decline of 2.3 points, meaning the days where Canada was scrambling to fill jobs is a thing of the past.  

This tightening job market impacts most people, but the central bank notes two demographics are disproportionately impacted—immigrants and young adults. 

Welcome To Canada. There’s A 1 In 8 Chance You’ll Be Unemployed

Recent immigrants, defined as permanent and non-permanent residents that arrived within the last 5-years, have a much harder time finding a job these days. The unemployment rate for this segment climbed 11.7% in May 2024, about 2.3 points higher than it was before the pandemic kicked off in February 2020. That means 1 in 8 people that arrived within the past 5 years are currently unemployed. Recent immigrants are twice as likely to be unemployed than the rest of the population. 

Canada’s Youth Unemployment Surges As Immigrants Out Compete

Think that’s bad? The tightening job market means the odds of employment are even worse for Canada’s young adults. The youth unemployment rate climbed to 12.7% in May, rising 2.4 points above February 2020’s pre-pandemic rate. It’s worth noting the rate is now above the unemployment rate of recent immigrants. This is because young adults and recent immigrants tend to compete for similar entry-level and early career roles.  

Canada’s aggressive immigration policy is designed to address a coming demographic collapse. The population growth rate is so high it’s unable to be absorbed by the economy in a timely manner, producing the opposite effect. Not only is productivity falling, its existing labor supply is now finding it difficult to find employment in a market where labor is piling up and housing costs are soaring. 

Think of it like working out. After a long period of inactivity, it’s a good idea to add a little activity. However, going from the couch to a marathon will almost certainly result in injury, putting one even further behind. That’s exactly how Canada is addressing its low productivity, and things are looking strained. It can try to keep going until it collapses, but the longer it continues with this plan, the longer the recovery time is going to be. 

You Might Also Like