Experts Cite Population Growth, High Interest Rates, and Youth Unemployment
Toronto’s unemployment rate reached 8.1% in November, marking its highest level since January 2022, according to Statistics Canada. This rise comes as nearly 380,000 residents searched for jobs, placing Toronto among Ontario’s hardest-hit cities, second only to Windsor at 8.7%.
Interest Rates and Population Growth Impacting Job Market
Economists link the rising jobless rate to a combination of factors:
- High interest rates: Elevated borrowing costs have cooled hiring as businesses hesitate to expand.
- Rapid immigration: The city’s population growth, driven by both permanent and temporary newcomers, has outpaced job creation.
Jim Stanford, Economist at the Centre for Future Work, explains:
“The labour supply has been growing faster than the number of jobs available.”
While interest rates are beginning to decline and immigration policy is shifting, experts note these changes won’t have an immediate impact.
Youth Unemployment Surging
Youth unemployment remains a significant concern, with nearly half (46.3%) of unemployed individuals having not worked in the last year or ever. Statistics Canada reported that the youth unemployment rate grew by 2.3 percentage points year-over-year, marking the sharpest increase among all age groups.
“There is a real shortage of job opportunities for those entering the workforce,” says Graham Dobbs, Senior Economist at The Dais at Toronto Metropolitan University.
A ‘Funny Combination’ of Job Growth and Rising Unemployment
Despite the rise in unemployment, Canada added 51,000 jobs in November, primarily in full-time work. This paradox of simultaneous job growth and unemployment is due to the surge in workers entering the job market.
Stanford explains:
“Employment continues to grow, but not fast enough to keep up with the population.”
Where is the Job Market Headed?
Experts predict gradual improvements as interest rates stabilize and immigration growth slows. However, Toronto’s labour market will remain competitive, particularly for newcomers and young job seekers.