AI on the Horizon: The Kids are Alright?

Canada’s latest AI news on the economy, society, and policy. We’re back, the calendar’s flipped, and once again there’s one topic no tech conversation seems to be able to avoid: How AI’s been affecting employment opportunities. Youth unemployment remains elevated in Canada—but is AI the root cause?

It’s true that Canadian youth have continued to find it difficult landing their dream job. And while there has been substantial coverage around the challenges for new graduates, AI never seems to be left out as the primary suspect under investigation. Recently, US labour market research has found substantial declines in early-career employment, especially in roles with high exposure to AI capabilities. Even our own research has found employers are more likely to reduce junior roles due to AI adoption.

What does the data say?

Statistics Canada released a report in late January 2026 showing that employment among young Canadians (aged 15–29) has increased over the past decade, regardless of AI exposure. At the same time, hiring data shows that over the same period, businesses are hiring less overall since the release of consumer LLMs, regardless of AI exposure. So, while AI may be impacting hiring decisions, layoffs from AI are largely non-existent in Canada today.

There’s also other economic factors at play here—like trade disputes and lower than average consumer sentiment in the second half of 2025. And Statistics Canada finds almost 90 per cent of firms who adopted AI report no change in employment levels. TD reports that AI adoption has not had a significant impact on productivity or employment over the last 3 years, and more AI-exposed roles in sectors with higher adoption fared better than comparable US workers and industries. Another important factor to consider is that despite over 90 per cent of Canadian firms adopting AI in some form, only 2 per cent report seeing returns today. For now, we’re still in the human-in-the-loop era.

Debugging the labour market impact of AI

There is one area that’s of concern. The same Statistics Canada report shows coding-intensive roles have seen a large decline in hiring in Canada since late 2022, particularly among positions requiring less than three years of experience. That said, context matters. Coding employment surged during the pandemic, and what we’re seeing now looks more like a correction than a collapse. Generationally speaking, it seems that only millennials and late Gen-X’ers (aged 30-49, and likely mid-to-late career professionals), are relatively unscathed and continuing to see steady employment growth post-pandemic.

On the Horizon

What we know is current hiring is a slog to navigate, and being the new kid on the (code) block has never been more difficult. The good news is that Canadian businesses don’t appear to be picking tech over talent just yet, but we should know more in early spring based on how many internship gratitude posts we see in our socials feed.

To learn more about an applied example of Canada’s AI productivity potential, check out our research on Modernizing Canadian Manufacturing with AI. To find out more about Canada’s automation productivity potential, check out our research on The Productivity Potential of Automation Technologies.