A senior Bank of Canada official is warning that young Canadians are facing one of the toughest job markets in decades, with immigration levels contributing to growing competition for entry-level work.Nicolas Vincent, the Bank of Canada’s external deputy governor, said youth unemployment has climbed sharply in recent years and warned the long-term consequences could leave a generation struggling to gain experience and financial stability.Blacklock's Reporter said speaking at an event in Montréal, Vincent said young Canadians are increasingly dominating the ranks of the unemployed and long-term jobless.“Not only are young people over-represented in the ranks of the unemployed, they also make up almost a quarter of the long-term unemployed,” Vincent said, adding the figure has more than doubled since 2022.He said the current situation is worse than what Canada experienced during the early 1990s recession and the 2008 global financial crisis.Bank of Canada data shows 25% of unemployed Canadians have been out of work for six months or longer, up from 15% in 2001.Vincent warned prolonged unemployment can permanently damage future earnings and career prospects.“Loss of skills and experiences from prolonged unemployment can widen the gap between workers’ skills and market needs and hurt future job prospects and earnings,” he said.While Vincent noted young workers are often concentrated in economically sensitive industries such as retail, culture and recreation, he said immigration has intensified competition for lower-skilled jobs.“One possible factor is demographics,” he said. “Between 2022 and 2024 there was a large influx of young people from abroad. This intensified competition in Canada for lower skill and entry level jobs.”.According to Vincent, hiring rates for workers under 24 have fallen 5.5% since 2022, while hiring has increased among Canadians over 55.He said Canada is now trapped in what he described as a “low hire, low fire” labour market where businesses are laying off relatively few workers but are also hiring far less frequently.Canada’s unemployment rate has climbed from about 5% in early 2023 to 6.9% last month despite stable layoff rates.“The answer is linked to hiring,” Vincent said. “Since 2022 unemployed workers have found it much harder to find a job, and today that ability is close to its lowest point in 30 years.”Federal immigration levels also came under scrutiny in a new Commons human resources committee report tabled Tuesday.The report, titled Youth Employment In Canada, stated several witnesses linked rising youth unemployment to overall immigration levels.The committee found unemployment among Canadians under 24 reached as high as 16% in Alberta, Ontario, and Newfoundland and Labrador last year. New Brunswick followed at 15%, British Columbia and Nova Scotia at 13%, Manitoba at 12%, Saskatchewan at 11%, and Québec and Prince Edward Island at 10%.The report recommended Ottawa ensure immigration targets better reflect labour market conditions, particularly for younger workers seeking entry-level jobs.Canada currently has an estimated 2,069,477 foreign nationals in the country on temporary permits, including international students and migrant workers. That number peaked at more than three million in 2025, including roughly 129,000 people estimated to be in Canada illegally after permits expired.Vincent warned persistently high youth unemployment risks discouraging young Canadians from participating in the labour force altogether.“It can reduce future earnings, delay the accumulation of experience and knowledge and lead some young people to give up on joining the labour market,” he said.
