Why Canada’s University Graduates Are Struggling to Find Work

Young adults graduating with a bachelor’s degree or higher are facing an increasingly bleak job market in Canada, even more so than many other demographics.

There were 493,000 unemployed individuals holding a bachelor’s degree or higher in the third quarter of 2025 but only 80,600 estimated job vacancies to demand such qualifications, according to Statistics Canada.

What are the reasons for this disparity and what actions can be taken to better the prospects for post-secondary degree holders in Canada?

Experts interviewed by The Epoch Times say the difficulty faced by credentialed young adults is primarily due to a mismatch between the kinds of degrees being obtained and the jobs being created, as well as the rise of artificial intelligence (AI) and overall economic decline.

‘Growing Gap’

University of Toronto’s Rotman School of Management professor Richard Florida says the economy isn’t creating enough “high-quality, innovation-driven jobs” to employ many credentialed young adults.

“Canada is seeing a growing gap between the skills of its young graduates and the kinds of jobs the economy is creating,” the economic analysis professor told The Epoch Times.

“We’ve expanded higher education and attracted talent, but we haven’t generated enough high-quality, innovation-driven jobs to match. The result is that many recent graduates feel over-credentialed and under-employed.”

Conference Board of Canada senior research associate Boxi Yang says several factors are driving the decline in jobs for those with university degrees and that the “degree advantage” no longer holds sway.

In fact, Yang said that since 2023, those who have college certificates and diplomas have done better in Canada’s job market than those holding a bachelor’s degree.

“College diploma and certificate holders are actually having a lower unemployment rate than bachelor degree holders,” she said in a Dec. 17 phone interview with The Epoch Times. “You don’t see that very often.”

The statistics support this. StatCan data indicated that the September unemployment rate for those aged 20 to 29 with a bachelor’s degree or higher was 8.1 percent, whereas those in the same age group holding a college diploma or trade certificates experienced an unemployment rate of 6.4 percent.

The statistics also show that 16.4 percent of “core-aged” workers between 25 and 54  are overqualified for their current positions. This suggests that the challenge of educated individuals struggling to secure employment that aligns with their qualifications persists into their later career stages.

Degree Versus Demand

Yang said it’s typical for younger workers to be the first to suffer when demand softens in the job market because employers cut entry-level roles and reduce funding for training, especially in fields like retail and hospitality.

The unemployment rate for Canadians between 20 to 24 hit 11.3 percent in September 2025, up from 10.4 percent in September 2024 and 8.7 percent in September 2023. Overall youth unemployment for those between 15 and 24 reached 14.7 percent in September, the highest rate since 2010, excluding the pandemic.

However the struggles faced by Canadians with a degree are more than just a reflection of a struggling economy, according to Yang, who said there is a significant “mismatch” between the kinds of degrees being obtained and the kinds of jobs that are available.

“Now you have this mismatch where I think there are a lot of areas and sectors like health care, a lot of STEM [Science, Technology, Engineering, and Mathematics] occupations—technical, math, engineering occupations,” Yang said. “But at the same time, you have your arts and humanities and social sciences, [and] these fields have an oversupply of graduates.”

Yang said one of the primary reasons for this is that provincial post-secondary funding is given out based on enrolment numbers, meaning universities are incentivized to scale up cheaper lecture-based arts and social sciences programs instead of higher-cost science and technical programs that require labs and specialized equipment.

“The incentive is misaligned here,” Yang said. “So this, to a degree, leads to why we see so much expansion of social science and humanities courses and these programs for the last 10 years in higher education.”

Yang also acknowledged that many students choose fields they find personally more interesting or accessible, but he advised prospective students to examine the job market before settling on a final decision.

“Of course your personal interest matters a lot, but reality also matters when it comes to your future work,” she said. “We’re definitely facing a lot of undersupply of health-care workers and STEM workers and trades.”

Changing Nature of Work

In addition to many young Canadians being credentialed in fields that aren’t in demand, Yang said the impact of generative AI has also been significant in reducing the need for routine and entry-level work.

Jobs that used to serve as an on-ramp to get the experience necessary to move up in a field have become consolidated, with many entry-level positions eliminated, Yang noted.

“You still need a lot of middle management, where there’s a lot of human impact that has something to do with work experience and communication and so forth,” Yang said. “But [on] the lower end, a lot of these routine tasks have been getting replaced by AI.”

Yang said that because the “first rung” on the career ladder has space for fewer and fewer people, those with a bachelor’s degree or higher often face a catch-22; they need more experience to obtain gainful employment, but they need to obtain gainful employment before having necessary experience.

“It’s becoming this vicious cycle,” Yang said, adding that she advises those in post-secondary education to take advantage of any internships or training placements possible to get experience and make connections.

While well-paying careers in the trades, health care, and STEM have relatively high demand, Yang said degree holders in the humanities, social sciences, arts, and administration have led to competition for an increasingly smaller amount of entry-level positions.

The effects of this can become far-reaching for the whole economy, according to Yang.

“You get married later, you have families and children later. … So these individual outcomes can definitely accumulate,” Yang said, adding that weaker earnings growth can depress future consumption, decrease investment, result in fewer taxes being collected, and lead to overall macroeconomic decline.

Brain Drain

Professor Florida says the problem extends beyond those who hold out-of-demand degrees to a general decline in Canada’s creation of high-paying, high-level jobs for graduates in business and other fields.

He said he’s watched the majority of his own MBA students in Toronto shift from wanting to stay in Canada to wanting to leave to pursue better opportunities elsewhere.

“I see this directly with my own MBA students,” Florida said. “When I started teaching almost 20 years ago, about 95 percent wanted to stay in Toronto after graduation. Today, it’s closer to 40 percent.”

Florida said many of his students are going to large American cities like New York, Miami, Los Angeles, or Chicago, while others are heading for places like London, Dubai, and Singapore.

Florida said Canada needs to “invest more aggressively” to create and foster the kinds of jobs that will attract university graduates so that the country doesn’t lose them to foreign markets.

“Unless Canada invests more aggressively in innovation and builds stronger economic clusters that can absorb and develop young talent, this mismatch—and the desire of young Canadians to build their futures elsewhere—will only continue to grow,” Florida said.

Yang said there are many conditions that make forecasting the future difficult, including geopolitics, the pace of AI, government investment decisions, and overall economic growth.

However, she said one thing to consider is potentially changing the way provincial governments fund post-secondary institutions, and shifting away from primarily enrolment-based funding.

“The funding structure itself could be revisited or reconsidered if we want to address this mismatch and kind of the perverse incentives that it creates,” Yang said.

The opposition Conservatives say the federal government should create the economic conditions to generate more job opportunities for young Canadians.

“Youth unemployment in Canada is now at crisis levels,” Conservative MP and employment critic Garnett Genuis said in a recent statement.

Genuis said the government needs to repeal “anti-resource laws,” reduce taxes and red tape to attract investment, “fix immigration,” create more training opportunities, and facilitate the construction of more homes closer to where the jobs are.

Employment and Social Development Canada (ESDC) says it recognizes the “challenges” facing young graduates and is working to create more opportunities.

“Unprecedented global challenges, new and emerging technologies, a rise in gig work, and an aging workforce are changing how the jobs of the future will look,” an ESDC spokesperson wrote in an email to The Epoch Times. “This presents challenges as well as new opportunities for Canada’s youth.”

ESDC pointed to STEM careers, agriculture, and environmental science as sectors that have labour shortages, along with skilled trades, and said the effort to cut interprovincial trade barriers and expedite nation-building projects will lead to “countless opportunities for youth,” including those holding bachelor’s degrees.

It also referenced different government initiatives intended to help students gain more experience to enter the workforce, including the Youth Employment and Skills Strategy, which aims to help young people overcome barriers to employment, and the Canada Summer Jobs work-experience program for 15- to 30-year-olds, which it says will support roughly 100,000 summer jobs next year.