Skip to content

The Monitor Progressive news, views and ideas

Youth employment measures in #bdgt14 do little to fix a big problem

February 11, 2014

2-minute read

It’s not unreasonable to say that Canada has a youth employment crisis.

The employment rate for youth in January was at one of its lowest points since the start of the recession, at 50.6%[i]. That’s only 0.1% higher than it was two years ago and down by a tenth compared to pre-recession levels. The unemployment rate for youth is nearly 2-and-a-half times higher than non-youth[ii], and the “recovery” in youth unemployment can be attributed to the number of youth who have actually dropped out of the labour market because of the recession.

In January, there were 213,400 young people between 20-24 years old and 170,900 youth between 25-29 years old who were unemployed.

Flaherty is sympathetic to their situation and says he wants to help. In the budget speech, he said:

Canada has one of the best-educated workforces in the world. … Still, getting that first job after finishing college or university can be challenging.”

According to the budget document, “too many Canadians graduate and find themselves unemployed or underemployed…[iii]

In order to address this problem, the budget speech announced: “To help young people get the first, critical work experience they need, our Government will focus investment to support internships in high-demand fields and in small and medium-sized businesses[iv].”

It sounds like the federal government is going to try to help young people struggling to find employment. Unfortunately, when you look at the details proposed in the budget, it’s clear this is a measure for messaging, not a measures for result.

The government will be spending $70 million over the next two years to fund two internship programs, of which $30 million is a reallocation[v]. In essence, the government is committing to $20 million a year in new funding to this initiative. For comparison, the government has spent $473 million on Economic Action Plan ads[vi]:


Combined, these two new youth internship programs will benefit 4,000 young people. Effectively, these programs will help exactly 1.05% of the unemployed youth.

When you also consider the 100,000 to 300,000 estimated young people[vii] who are engaged in unpaid internships, it’s clear that this proposal addresses far less than 1% of the need.

For proposals that would go a long way in helping young workers, including banning unpaid internships to create more labour demand, creating wage subsidies for employers hiring youth and a stimulus program to boost the entire labour market, check out the Alternative Federal Budget.

Kayle Hatt is the Canadian Centre for Policy Alternatives’ 2013 Andrew Jackson Progressive Economics Intern. He attended the 2014 federal budget lock-up.

[i] CANSIM Table 282-0005, Employment rate for youth (15-24 years old), total of all catagories.
[ii] CANSIM Table 282-0002 Labour force survey estimates (LFS) by sex detailed age group
[iii] Page 73, Budget 2014.
[iv] Page 5-6, budget speech text pre-released in lock-up. May differ from the actual speech in the House of Commons.
[v] Page 73, Budget 2014.
[vi] Tim Harper, “Jim Flaherty’s risky ‘stay the course’ budget” Toronto Star, February 10th, 2014.
[vii] Sagan, Aleksandra (2013). “Unpaid Internships Exploit ‘Vulnerable Generation.’” CBC News. July 02, 2013. Online at:

Topics addressed in this article

Related Articles

Canada’s fight against inflation: Bank of Canada could induce a recession

History tells us that the Bank of Canada has a 0% success rate in fighting inflation by quickly raising interest rates. If a pilot told me that they’d only ever attempted a particular landing three times in the past 60 years with a 0% success rate, that’s not a plane I’d want to be on. Unfortunately, that looks likes the plane all Canadians are on now.

Non-viable businesses need an"off-ramp"

Throughout the pandemic, many small- and medium-sized businesses have weathered the storm, thanks to federal government help. In his deputation to Canada's federal Industry Committee, David Macdonald says it's time to give those businesses an "off-ramp".

Truth bomb: Corporate sector winning the economic recovery lottery; workers falling behind

This isn’t a workers’ wage-led recovery; in fact, inflation is eating into workers’ wages, diminishing their ability to recover from the pandemic recession. Corporate profits are capturing more economic growth than in any previous recession recovery period over the past 50 years.