Source: The Conversation – Canada – By David J Finch, Professor, Innovation and Marketing, Mount Royal University; University of Calgary
Canada has a paradox at the heart of its labour market. The country leads the G7 for the most educated workforce and is producing more graduates than ever before. Yet for millions of young Canadians, the path from school to stable work has never been harder.
Between 2022 and 2025, vacancies for jobs requiring a bachelor’s degree and fewer than three years of experience fell by more than half.
About 40 per cent of Canadian graduates are underemployed, and youth unemployment reached 15 per cent in September 2025, more than double the adult rate and the highest in 15 years outside the pandemic.
The familiar diagnosis of a skills gap is not wrong, but it focuses on the wrong problem. The problem isn’t just skills; it’s that the system that converts learning into recognized workplace performance is broken.
Our new report, Entry-Level Employment: The Canary in Canada’s Labour Market Coal Mine, argues that the collapse of entry-level opportunities should not be viewed narrowly as an isolated challenge unique to a generation of young people.
It’s an early warning of broader challenges facing Canada’s labour market. To build a more productive economy, we must start by rebuilding the system that converts learning into recognized performance.
Eroding conversion infrastructure
Entry-level jobs were never just jobs. They were part of a larger system that converted learning into labour-market value. This system delivered four functions: skills were developed and refined under supervision, professional identities were formed, networks were built and capability became visible to employers.
For much of the 20th century, this risk was shared among government, individuals and employers. Governments and individuals funded education, and employers converted this education into workplace value. Employers were prepared to invest in employee development because the return on this investment was measured over decades of employee contribution.
Over the past 30 years, this conversion system deteriorated. The “hire and develop” model of the 20th century has given way to short-term, contract and gig work, which now represents up to one-quarter of Canada’s workforce.
Early research also suggests that the rapid expansion of remote and hybrid work during the COVID-19 pandemic is further diluting this conversion function.
The result is a shift of this conversion role from employers to individuals. As evidence, OECD countries, including Canada, now devote just 0.1 per cent of GDP to workforce training, the lowest level recorded.
Concurrently, over this period, post-secondary attainment in Canada has skyrocketed. However, expanding this educational supply, without scaling the corresponding conversion system, has only accelerated the widening of the conversation gap.
Employers aren’t irrational when they require “entry level” candidates with several years of experience. They are adapting to an absence of mechanisms that once allowed them to observe and develop emerging talent directly.
In the vacuum left by a weakening conversion system, they are left to rely on weak proxies of performance, such as academic credentials, school reputation or references. Each of these proxies reinforces systemic advantage, which locks many qualified new workers out of the very experiences that would let them demonstrate performance.
This is the distinction that matters: a skills gap points to missing qualifications; a conversion gap reflects a loss of system-wide ability to turn those qualifications into proven performance.
The canary in the coal mine
Just as the canary warned miners of invisible danger, the accelerating breakdown of the conversion system signals a risk not just for young people, but for the broader labour market.
Working lives now stretch across four or five decades and multiple employers, sectors and technologies. The World Economic Forum estimates that 39 per cent of current skill sets will be outdated within five years.
Converting learning into recognized performance is no longer limited to entry-level employment but is now an ongoing requirement across every job transition, technological shift or re-entry into work.
Yet the infrastructure supporting this conversion was built for an era of stable firms and linear careers. It no longer fits today’s increasingly dynamic labour market.
What needs to change
To rebuild our conversion capacity, our report identifies four priorities:
1. Rebuild structured entry-level pathways.
Structured conversion pathways must be expanded. Apprenticeships, graduate training programs and residencies must move beyond the trades and health care into all occupations. This restores employers as active partners in the conversion function rather than passive consumers of skills.
2. Embed continuous, work-integrated learning.
Continuous work-integrated learning must be expanded across career stages, with flexible opportunities designed to develop skills, generate observable performance, form professional relationships and appropriately share risk. The conversion gap is not a problem confined to the start of a career; it recurs at every transition, displacement and re-entry.
3. Rebalance risk and responsibility.
The legacy conversion system worked because the risk was shared by employers, government and individuals. The collapse of this system forces people to look for alternative conversion pathways to demonstrate performance, including unpaid internships or pursuing additional education.
These alternatives are not based on merit; they’re often rooted in financial capacity, which is a form of systemic privilege. The new conversion system must be designed to unlock the skills of all Canadians from the outset.
4. Build an open-recognition system.
We must develop open-recognition infrastructure. Open recognition establishes a harmonized system for verifying skills that are recognized across the full labour force, regardless of where or how they were developed. Without this, expanding the first three reforms becomes impossible.
The question is not whether Canadians have the education and skills to succeed. They do. The breakdown is converting this education and skills into recognized workplace performance.
Rebuilding the conversion system is how Canada renews productivity, widens opportunity and builds a workforce capable of meeting the demands of the decades ahead.
David Finch receives funding from the Alberta Centre for Labour Market Research. He is also the Director of The Productivity Project, a collaboration of Mount Royal University, the University of Calgary’s School of Public Policy, the Alberta Centre for Labour Market Research, and the LearningCITY Collective.
– ref. Canada is producing more graduates than ever — so why is it harder to find a job? – https://theconversation.com/canada-is-producing-more-graduates-than-ever-so-why-is-it-harder-to-find-a-job-279178