Why student unemployment is rising and what it could signal about a looming recession

17 hours ago

The unemployment rate for students looking for summer jobs is the highest it's been in a non-pandemic year since 2009, when Canada was going through a recession — and some economists worry that the latest numbers could signal another one is just around the corner.
'That's really concerning to me,' said Viet Vu, economic researcher at Toronto Metropolitan University. 'Oftentimes, youth unemployment is a leading indicator to what could be a recession.'
Statistics Canada's latest Labour Force Survey showed June's data for 'returning students,' which it defines as full-time students in March who intend to return to school full time in the fall, was 17.4 per cent. That's up from 15.8 per cent in June of last year.
The agency defines 'returning students' as those aged 15 to 24.
While the first year of the pandemic saw a 33.1 per cent 'returning student' jobless rate, last month's figure marks the highest since June 2009, when the rate was also 17.4 per cent.
'The reason why this is bad is when you look at how an economy is doing, you look at how many people are getting fired and how many people are getting hired -- and oftentimes, when companies squeeze their budget ... the first positions to go tend to be the most junior,' added Vu.
'Which tells you that these companies aren't doing well because they can't afford to hire a summer student.'
Meanwhile, Statistics Canada's unemployment rate for the broader 'youth' category — which includes all 15- to 24-year-olds, not just students — stood at 14.2 per cent in June. That's up 0.7 percentage points from last year, and well above the pre-pandemic average of 10.8 per cent between 2017 and 2019.
'This has been a brutal summer for students to look for a job... the openings are just not there,' said Jim Stanford, director and economists at the Centre for Future Work in a Zoom interview with CTV News Saturday.
Trade war to blame, economists say
Economists say the U.S. trade war is playing a significant role in the growing student unemployment rate. Many companies are choosing not to take on new hires because of the amount of uncertainty that comes with constantly changing U.S. tariffs on Canadian exports to America.
'I think the blame for the high student unemployment rate rests solely at Donald Trump's doorstep,' said Stanford. 'In the last few months, companies have had no idea where the economy is going. The last thing they're going to want to do is take on a few extra heads for the summer.
The border city of Windsor, Ont., saw the highest unemployment rate among all demographics in June with 11.2 per cent, indicating the tariffs have had a major impact on Canadian industries.
Stanford isn't ready to say a recession is guaranteed to happen just yet.
'We've all been watching for signs that the toll of the Trump tariffs could push Canada into a recession — and if he goes ahead with the 35 per cent tariffs, we could have a recession. Not yet, though," he said.
Brendon Bernard, senior economist at job search site Indeed, said there is a silver lining: the year-over-year increase in the student unemployment rate has narrowed compared to previous years. The rate jumped from 11.9 per cent in 2023 to 15.8 per cent in 2024, but climbed more modestly this year to 17.4 per cent.
'There's been some caution that employers have undertaken because the situation could go in multiple directions,' Bernard said.

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Anand says Indo-Pacific strategy will have economic focus but maintain values

CBC

an hour ago

Anand says Indo-Pacific strategy will have economic focus but maintain values

Foreign Affairs Minister Anita Anand says the economy is becoming the primary focus of Canada's relationships in the Indo-Pacific — a shift that appears linked to Canada's recent moves to overcome its security dispute with India. Anand was in Japan and Malaysia this week for her first trip to the region since taking over as foreign minister in May. Her message coming out of that trip was that Canada's foreign policy is shifting — though not abandoning — the priorities set by the previous Liberal government of former prime minister Justin Trudeau. "It is important for us to revisit our policy — not only in the Indo-Pacific but generally speaking — to ensure that we are focusing not only on the values that we have historically adhered to," Anand said Thursday in a teleconference from Malaysia. "Foreign policy is an extension of domestic interest and particularly domestic economic interests. This is a time when the global economy is under stress." The Trudeau government put language on environmental protection, labour standards and gender equality in its trade agreements. Goldy Hyder, head of the Business Council of Canada, said that made Canada appear "a bit preachy" to other countries. He said Canada has to be respectful in the way it stands up for democratic values. A focus on the economy is quickly becoming a defining trait of the government of Prime Minister Mark Carney, a former central banker who is intent on building up Canada's domestic capacity and reshaping its trade and security plans to rely less on the United States. Carney has been mostly focused on Europe so far; he has visited the continent three times since March. Anand's visit this week "sets the stage" for Carney's planned visits this fall to the Association of Southeast Asian Nations leaders' summit in Malaysia and the APEC forum in South Korea, said Vina Nadjibulla, research vice-president for the Asia Pacific Foundation. Anand visited Tokyo to sign an information-sharing agreement that could lead to defence procurement deals, before heading to Malaysia for a meeting of the Association of Southeast Asian Nations, or ASEAN. Canada trying to restore India ties Her visit also comes as Canada tries to restore ties with India after two years of diplomatic chill following the 2023 shooting death of Sikh activist Hardeep Singh Nijjar near Vancouver — a crime Ottawa linked to agents of the Indian government. The RCMP said last year it had evidence of New Delhi playing a role in acts of homicide, coercion and extortion targeting multiple Sikh Canadians. Canada subsequently expelled six senior Indian diplomats; New Delhi expelled six Canadian diplomats in response. India says Canada is enabling a separatist movement that calls for a Sikh homeland — Khalistan — to be carved out of India, and calls that a violation of its sovereignty. Carney began to thaw the relationship in June. He invited Indian Prime Minister Narendra Modi to the G7 summit in Alberta and the two leaders agreed to reinstate their high commissioners. The two countries are also starting security talks. As the world's most populous country, India is seen as a critical partner as Carney pushes to disentangle Canada from its heavy reliance on trade with the U.S. The two countries have engaged in on-and-off negotiations on a trade deal since 2010, with frequent pauses — including Ottawa's suspension of talks after the Nijjar killing. Hyder said India's corporate sector has been urging Canadian corporations to continue expanding trade in spite of the tensions between Ottawa and New Delhi. "One day this is all going to be resolved, and we don't want to have lost all that time." WATCH | Public safety minister on threats from India: Anandasangaree: 'Difficult conversations' with India will continue, no decision on Bishnoi gang 25 days ago Duration 2:59 Public Safety Minister Gary Anandasangaree responded to questions Wednesday about a CSIS report listing India as a top country for foreign interference in Canada. Anandasangaree also said proper security processes need to be followed if India's Lawrence Bishnoi gang is to be designated a terrorist entity. He said the reduced number of Canadian diplomats has made it more challenging for members of his council to engage in India because there are fewer trade commissioners in India to help Canadians connect companies with contacts and opportunities on the ground. Hyder, who spoke just before leaving for a fact-finding mission to India, said the appointment of high commissioners will set the tone for eventual trade talks. He said a trade deal would be helpful but is not "a precondition" for boosting trade, and suggested Ottawa should focus on scaling up the roads and ports needed to meet Asia's demand for Canadian commodities. Vijay Sappani, a fellow with the Macdonald-Laurier Institute, said an India trade deal could come quite soon. "If we put in the right efforts on our end, I feel like we could probably get a free-trade agreement done before the end of this year, if not [the first quarter] of next year," said Sappani. "There is no Indo-Pacific without India, and if we want to play in the global markets, where we've been kind of shunned … then we need to step up to the plate." Sappani said Ottawa should seek assurances from India that it will never play a role in violence in Canada. In turn, he said, Ottawa could commit to not having politicians show up at any event where there are displays commemorating those who took part in violence in support of the Khalistan movement. "That is the biggest thing that we Canadians can do to stop some level of irritants within the Indian side, and trade definitely will come on back on the table," he said. Anand would not say how soon Canada and India could appoint top envoys or start trade talks.