Young Generation Hit A Wall? New Unemployment Crisis In Canada

While the economy created 8,200 new jobs in December 2025, the unemployment rate rose to 6.8%. These figures may seem contradictory, but in fact, this contradiction exposes the complex and changing reality of the Canadian labor market. This situation has become a cause for concern not only for policymakers but also for ordinary citizens, especially young people.
In the past three months, from September to November, the Canadian economy has shown an extraordinary performance, when a total of 181,000 new jobs were created. This was a development that created a ray of hope after months of economic stagnation. It should be remembered that in the first eight months of 2025, US tariffs, global trade uncertainty and inflationary pressures had almost stopped job creation. In such a situation, although the December figures look weak, it would be tantamount to turning a blind eye to reality.
The main reason for the increase in unemployment is being said to be that more people have started looking for work. According to Statistics Canada, labour force participation has increased, meaning that people who had previously given up looking for work are now returning to the market. According to economists, this can also be an encouraging sign, as it indicates that people are hopeful that employment opportunities will improve in the future. However, the problem is that the pace of job creation seems unable to meet this additional demand.
The nature of the jobs created in December is also worth considering. Full-time jobs increased by 50,200, which is undoubtedly a positive development, but at the same time, part-time jobs decreased by 42,000. This gives the impression that employers are moving towards more stable and permanent employees, but the situation has become more difficult for people who rely on part-time jobs, especially students and low-income groups.
At the sectoral level, 21,000 new jobs were created in the health and social services sector, a logical consequence of the growing population pressure and the increase in the number of elderly people. In contrast, 18,000 jobs were lost in the professional, scientific and technical services sector, the first significant decline since August. This decline may indicate that the private sector is still cautious in investment and recruitment due to uncertainty.
The most worrying aspect is youth unemployment. The unemployment rate among young people aged 15 to 24 rose to 13.3%, which, although lower than the 15-year high of 14.7% recorded in September, is still considered a dangerous level. The situation is also serious for young people because not finding a job after completing their education has a negative impact not only on their economic future but also on their mental health and social stability. In a country that calls itself the land of opportunity, it is sobering to see young people sending thousands of applications but not receiving a response.
There has also been a mixed trend on the wages front. Average wages rose 3.4 per cent on an annual basis in December, down from 3.6 per cent in November. The decline suggests that wage pressures are gradually easing, which could be positive news for the central bank in the face of inflation. However, for the average citizen, the increase still feels insufficient to meet the rising cost of living.
The data is of exceptional importance for the Bank of Canada, as it could influence future decisions on interest rates. Experts believe that the dovish December report will not force the central bank to make any immediate changes to interest rates. The policy rate is already on hold at 2.25 per cent, and the bank is likely to take a cautious approach and continue to assess the situation.
However, the real question is: is the Canadian economy really moving in the right direction or is this just a temporary stabilization? The coming months could be decisive for Canada in the context of US trade policies, global geopolitical tensions and domestic economic pressures. If job creation does not accelerate, further increases in unemployment could fuel public anxiety.
In the end, it is worth noting that the December figures are neither all good news nor all doom and gloom. They are a warning—to policymakers to take targeted measures for young people and vulnerable groups, and to the public that economic recovery is a long and patient process. Canada is at a juncture where the right decisions can put it on a path to stability, and the wrong ones can trigger a new economic crisis. The question is not whether jobs will grow or unemployment will rise; the real question is whether this economy is really working for ordinary Canadians.