Young Canadians face rising unemployment as an influx of temporary foreign workers fills key job sectors
Young Canadians are finding it increasingly difficult to secure jobs, a challenge that may be exacerbated by an influx of temporary foreign workers in the restaurant and retail sectors, according to BNN Bloomberg.
Michelle Eze, a 22-year-old public-policy graduate, began her job search in Toronto in October, just as Canada’s youth unemployment rate started to rise. Despite her efforts, which included searching for teaching and restaurant service jobs, Eze has yet to find employment.
Eze’s struggle reflects a growing disconnect in Canada’s labour market. Entry-level jobs for students and recent graduates have become more scarce as the economy weakens.
At the same time, the country has imported hundreds of thousands of temporary foreign workers for jobs, many in the food and retail sectors.
This trend has contributed to a significant increase in youth unemployment. Two years ago, the jobless rate for individuals aged 15 to 24 was slightly above 9 percent; it has since risen to 14.2 percent, marking the highest level in over a decade outside the Covid-19 pandemic.
For young immigrants who arrived in Canada within the last five years, the unemployment rate is around 23 percent.
Bloomberg News analyzed government data and found that the number of temporary foreign workers approved to work in food and retail increased by 211 percent between 2019 and 2023.
The surge was partly driven by increased demand for immigration to Canada after pandemic travel restrictions eased, with many newcomers seeing these temporary jobs as a pathway to permanent residency.
Business lobby groups have defended the temporary foreign worker program, originally intended to help farmers with seasonal labour needs, as essential for filling vacant positions. However, the labour market situation in cities like Toronto, where youth unemployment has spiked, challenges this view.
The Toronto area had more than 120,000 unemployed individuals aged 15 to 24 as of July, an increase of 50 percent in just two years, according to Statistics Canada data.
Timothy Lang, CEO of Youth Employment Services, noted that more youths are seeking assistance due in part to the influx of new Canadians. He observed that some employers prefer to hire more experienced workers, disadvantaging younger job seekers.
Alexander Clarke, a 17-year-old who has been applying for jobs at grocery stores, fast-food outlets, and clothing shops, has had no success in securing employment. Clarke believes that employers are increasingly favouring older workers over youth.
In response to public concerns, Prime Minister Justin Trudeau’s government has rolled back some pandemic-era measures designed to address labour shortages.
For instance, the government has limited the number of hours international students can work and promised stricter enforcement against businesses that exploit the temporary foreign worker program.
Despite these changes, current regulations still allow companies to hire foreign workers even in regions with high and rising unemployment. Last year, Canada permitted employers to bring in approximately 240,000 workers under the temporary foreign worker program, nearly double the number in 2019.
About 20 percent of these jobs were in positions common in restaurants and retail stores, such as cooks, food counter attendants, and cashiers.
The share of such jobs filled by foreign workers has grown since the pandemic, while the proportion of agricultural work done by temporary foreign workers declined to 41 percent last year, down from 54 percent in 2019.
Major restaurant and retail chains are the largest users of the program, though the extent of their reliance is difficult to determine due to the frequent use of numbered companies in government data.
In Ontario alone, Tim Hortons hired at least 714 temporary foreign workers last year, up from 58 in 2019, with 92 percent of those positions in 2023 listed under holding companies that did not carry the franchise name.
The increased use of the temporary foreign worker program may be not only making it harder for young Canadians to find jobs but also keeping wages low for entry-level positions where they compete with foreign workers.
Christopher Worswick, chair of the economics department at Carleton University in Ottawa, who co-authored a report on the issue, argues that wages should rise to match labour demand, but companies’ profitability often prevents this from happening.
