Once a haven for job seekers, Canada has now one of the worst job markets for graduates; what went wrong, and it could get worse?

Time of India

05-05-2025

C
anada's New Graduates: Why 2025 Is the Hardest Time to Start a Career -
The story of Canada's new graduates in 2025 is not the usual tale of excitement and opportunity. For thousands of young Canadians finishing school, this year's job market has become a harsh wake-up call. With unemployment for recent grads under 25 reaching
11.2%
in the first quarter of 2025, many are entering what's now being called the toughest graduate job market in over two decades—excluding the pandemic.
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These numbers come from a
Statistics Canada
analysis shared by Brendon Bernard, a senior economist at
Indeed Canada
. And behind those numbers is a deeper problem: the combination of slow economic growth, interest rate effects, and now a
U.S.-led trade war
is creating a storm few graduates were prepared for.
Why is Canada's job market so tough for young graduates right now?
Over the past three years, Canada's economy has been under pressure. Much of this stems from the Bank of Canada's efforts to fight inflation by raising interest rates. While that helped cool inflation, it also slowed down hiring. The result? Fewer opportunities across the board, but especially for new grads.
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'Youth have borne the brunt of Canada's weaker labour market in recent years,' said
Brendon Bernard
in an email. According to him, it's not just about fewer jobs—it's also about more young people entering the workforce. The population of Canadians aged 15 to 24 has grown significantly, meaning the job pool is more crowded than ever.
Now, just as economists hoped for a rebound with interest rates beginning to fall, a new obstacle has appeared: trade tensions with the U.S. This
trade war
has made businesses hesitant to invest or hire, especially for entry-level roles that require more training and time. That's a major blow for young people just stepping into the job world.
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How does unemployment hit recent grads differently?
Unemployment isn't just a number—it has long-term consequences, especially for those just starting out. Recent grads often rely on their first full-time roles to gain real-world experience, build connections, and launch their careers. Without that first step, it becomes harder to grow professionally and personally.
Bernard highlights a worrying trend: 'This rapid deterioration is concerning, both for how the initial time just out of school is a high-stakes period for people's careers, and the fact that the uncertain economic outlook could further hit conditions as new cohorts of grads join the labour market.'
Put simply, this moment matters. If young people are unable to find work soon after graduating, they risk falling behind permanently—missing out on income, experience, and confidence.
Can things get worse before they get better?
Sadly, the outlook remains uncertain. Even with interest rates now easing, the expected job market rebound hasn't materialized. Instead, the
U.S.-driven trade war
has brought new risks that could delay recovery. Businesses remain cautious. Many are either freezing hiring plans or cutting back investment altogether.
This means that for the class of 2025—and possibly for those graduating in the next few years—the job hunt might stay tough. That's a difficult reality to face, but one that many grads are now forced to navigate.
What can young Canadians do in the meantime?
Despite the challenges, there are still ways for grads to move forward. It might take longer and involve more uncertainty, but here are some practical steps:
Focus on building skills
: Short online courses in digital tools, writing, analytics, or project management can help make your resume stronger.
Network more than ever
: Reach out to former professors, classmates, and professionals on platforms like LinkedIn. Most job leads still come through personal connections.
Be open to temporary roles
: Contract work, internships, or even part-time jobs can be stepping stones. The goal is to keep building experience, even if it's not your dream job.
And perhaps most importantly—don't take the silence personally. If you've been applying and hearing nothing back, you're not alone. This isn't about your worth. It's about the system. The market is tough, but your efforts still matter.
Why we need to pay attention to the story of new grads
The story of Canada's new graduates in 2025 is more than just another economic headline. It reflects a generation stuck in limbo, ready to work but with fewer doors open. Ignoring this issue now could have long-term effects on our country's economy and workforce.
As the months go on, employers, educators, and policymakers need to ask: what can we do to help these young people get a fair start? Because the longer this hiring freeze lasts, the more talent and potential we risk leaving behind.
FAQs:
Q1: Why are new graduates in Canada struggling to find jobs in 2025?
Because of rising youth unemployment, fewer hiring opportunities, and economic uncertainty.
Q2: What can Canadian grads do to improve their job chances?
Learn new skills, network actively, and stay open to entry-level or short-term roles.