The youth are facing the crisis of huge unemployment. Here’s how the Budget addresses this

As Canadian youth struggle with a challenging labor market, the federal government has outlined its plans to deal with a crisis that has led to the highest youth unemployment rate in more than a decade.

The plan focuses on workplace and summer job creation for students, and greater investment in skills training programs the federal government says it hopes will make it easier for young people to find work, including in the trades and climate-related sectors.

“For young people, this budget was made for you,” Finance Minister François-Philippe Champagne said during a speech Tuesday before presenting the budget in the House of Commons.

When the economic situation becomes weak, the youth are the first and most affected. In the years since the pandemic, inflation has surged, driving up the cost of living. Population growth has also increased rapidly – ​​particularly among the student-age group – in recent years outpacing the number of available jobs, Although the growth rate has slowed down this year,

“There’s been a huge change in expectations of what one’s life will be like, and that’s a big challenge for young people,” said Rob Gilzeau, an assistant professor of economic analysis and policy at the University of Toronto.

Now, the country is on the verge of recession as the fierce trade war with the US is leading to layoffs and a decline in hiring and investment. And that’s not a good sign for the younger generation, Gileseau said.

“Most recessions are relatively short-lived, but if this one is essentially being driven by Americans with a completely wild economic policy that is intended to harm our country, the economic damage could be long-lasting,” he said.

“This will have a disproportionate impact on young people.”

Summer Jobs, Business Programs for Youth

“Overall, when I look at this budget, I think what they’re trying to do is signal that they know young people are being hit hardest right now,” said Rebekah Young, vice-president of Scotiabank Economics.

However, “when we think about this change that the Carney government is trying to make… I think they have to take a deeper look at how the education and university systems enable young Canadians to enter and remain in the workforce.”

For its student work placement program, the federal government plans to set aside $635.2 million over three years, starting in 2026-27, to provide 55,000 “work-integrated learning opportunities” – basically, skills training and short-term job placement – ​​for post-secondary students.

It is also proposing $594.7 million over two years for the Canada Summer Jobs program, an initiative it began exploring a few years ago that it says will support 100,000 jobs for youth next summer.

Among the more targeted proposals is a “Youth Climate Corps” – a paid skills training program for young people in which they would be “trained to respond quickly to climate emergencies, support recovery, and strengthen 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 youth will benefit.

The government says it will also allocate $307.9 million over two years for a youth employment and skills strategy. The funding is earmarked for jobs, training and other supports, including mentorship, transition and mental health counselling, starting in 2026-27.

The initiative gives money to various government departments which distribute it to programs for young people facing “employment barriers”, which may include groups such as women and racialized people.

The budget also includes previously announced plans to put money into skills training for businesses, which is not necessarily directed at young people but could benefit them.

That part allocates $75 million over three years to expand union-based training in Red Seal trades, a list of specified trades that includes jobs such as carpentry, heavy equipment operations, ironworkers, machinists and plumbers.

‘I think they have to dig deeper’

While the programs could address some of the issues young people are facing right now — like providing a clear path to entry-level jobs, which some experts worry could be replaced by artificial intelligence — Young said, the best thing the federal government can do for young people right now is to avoid a recession.

“We’re in a trade war, there’s widespread uncertainty. Fortunately, there aren’t a lot of mass layoffs happening, but there also isn’t any hiring. So especially young people who are looking to integrate into labor markets are having a really tough time,” Young said.

“They’ve just come out of some tough years, including a time when we had explosive population growth, which made employment really hard to define. So I guess I read it as a sign (that) they’re trying to be responsive.”

Paul Kershaw, a professor at the University of British Columbia and executive director of Generation Squeeze, said the budget lines aimed at youth unemployment are “small promises”, which he said “reinforces” a lack of concern for the struggles of young people.

“I would certainly like to see a budget in the future that tries to find a better balance between new dollars versus new dollars over the life course for young people at this critical moment as they try to start their careers, start families and make our economy more productive,” he said.

The government has been dramatically cutting entry to temporary workers, which some economists argue has contributed to a youthful labor market that has seen more people compete for fewer jobs. But the uncertainty of the trade war has added another layer of complications.

“It would certainly help — theoretically — but we’re also seeing that jobs are not growing right now because of that uncertainty,” Young said. “So it would theoretically remove some of the competition for those jobs, but I would also argue that the government should think about – how can we get young people into other jobs?

“I think it’s the (youth employment and skills strategy) and (student work placement programme) that can have a more meaningful impact on young people, like a long-term vision.”