Canada’s failure to tackle youth unemployment could result in an $18.5-billion loss in GDP by 2034, according to a new report from The King’s Trust.
The report, titled Failure to Launch and prepared by Deloitte Canada, highlights that youth unemployment reached 14.5 per cent in August — the highest rate since 2012, excluding the pandemic years. The study warns that inaction will not only impact the economy but also lead to social issues requiring greater investment in health care, social assistance, and the criminal justice system.
Addressing the youth unemployment crisis could yield significant economic gains, the report states, including the creation of 228,000 jobs and an increase of $5.3 billion in government revenue through higher tax income from increased employment. It also projects an increase of $9.2 billion in wages and salaries and a boost to Canada’s annual GDP growth rate from 1.98 per cent to 2.04 per cent over the next 10 years.
“The numbers speak volumes: Canada is in a crisis when it comes to un/underemployment of our young people who feel that our systems and institutions have let them down,” said Farah Mohamed, CEO of The King’s Trust. “Governments, corporate Canada and the charitable sector must do more for young people as the economic and social costs are far too high to ignore.”
Trevin Stratton, Americas Economics Advisory Leader at Deloitte Canada, said unemployment early in a career can have lasting effects.
“Unemployment in the early stages of a career can have long-lasting effects, delaying the development of productive skills and a professional network,” he said. “When youth are unable to find suitable employment, they are unable to fully contribute to the economy and society. Ultimately, the exclusion of young people from the world of work comes at a steep cost.”
Mark Fell, chair of the board of directors of The King’s Trust, called for immediate action.
“The King’s Trust Canada report allows us the benefit of foresight and the opportunity to act on a crisis with significant and compounding costs,” he said. “Ensuring the well-being of young Canadians is an economic and social imperative that we must not ignore.”
The report underscores the need for collaborative efforts among governments, businesses, and the charitable sector to address youth unemployment and its broader implications for Canada’s economic and social future.
Founded by King Charles III, The King’s Trust Canada is a national charity that creates pathways to employment for young people facing barriers by providing free skills training, work experience, and networking opportunities.