Cheap foreign labour soars in Canada as young workers are left jobless

Youth unemployment rates in Canada have been climbing rapidly. Two years ago, the unemployment rate for individuals aged 15 to 24 was slightly over 9%. Today, it stands at 14.2%—the highest level in over a decade, excluding the COVID-19 pandemic.

The situation is even more severe for young immigrants who arrived in Canada within the past five years, with an unemployment rate of around 23%.

A Bloomberg News analysis of government data reveals that the number of temporary foreign workers in the food and retail sectors has surged dramatically in the last five years. Between 2019 and 2023, the number of temporary foreign workers approved to work in these industries increased by 211%.

This sharp rise is partly due to a growing demand for immigration following the lifting of pandemic travel restrictions. Many immigrants view these temporary roles as a pathway to permanent residency, while employers leaned on the program as the economy reopened.

Business groups have defended the temporary foreign worker program—initially created to address seasonal labor shortages in agriculture—as essential for filling vacant roles.

However, in cities like Toronto, the state of the labor market challenges this argument. Canada’s largest city has no shortage of young, available workers. In July, more than 120,000 unemployed people aged 15 to 24 were in the Toronto area, marking a 50% increase in just two years, according to Statistics Canada.

"We’ve seen more youth reaching out to us, partly due to the influx of new Canadians," said Timothy Lang, CEO of Youth Employment Services, an organization that helps young people in Toronto with job training and placement. "Unfortunately, some employers are choosing more experienced workers, which is pushing some young people out of the job market."

Seventeen-year-old Alexander Clarke shares this sentiment. He’s been applying to jobs at grocery stores, fast food outlets, and clothing shops for months but hasn’t received any responses from potential employers. "I think they’re looking for older workers now," Clarke said. "You see a lot more older people working in places where young people used to be."

In response to public criticism, Prime Minister Justin Trudeau’s government has begun rolling back some pandemic-era policies designed to ease labor shortages. For instance, the government has reinstated limits on the number of hours international students can work and is promising stricter oversight of businesses that misuse the temporary foreign worker program.

Nevertheless, current regulations still allow companies to hire foreign workers in regions with high and rising unemployment.

Last year, Canada permitted employers to hire approximately 240,000 workers through the temporary foreign worker program, nearly double the number in 2019. About 20% of those workers filled roles in restaurants and retail, including jobs like cooks, food counter attendants, and cashiers.