Speech at CIRANO by External Deputy Governor of the Bank of Canada, Nicolas Vincent, on changes in the Canadian labor market

On May 26, CIRANO hosted Nicolas Vincent, External Deputy Governor of the Bank of Canada, for a speech on recent changes in the Canadian labor market.

Introduced by Nathalie de Marcellis-Warin, his speech highlighted several trends observed in the Canadian economy.

In his remarks, Nicolas Vincent, CIRANO Researcher and Fellow as well as Principal Researcher for the Business cycles and Financial Markets theme, highlighted the sharp slowdown in the labor market since the beginning of 2025, with job creation remaining well below last year’s levels and the unemployment rate continuing to rise since the end of 2022.

In particular, he identified three interrelated trends: low labour turnover, characterized by a simultaneous decline in hiring and layoffs; a rise in long-term unemployment; and a more pronounced deterioration in the situation of young workers.

Those aged 15 to 24 now account for nearly one-third of new unemployed workers, including among the long-term unemployed—a historically high proportion. According to Nicolas Vincent, this situation could have lasting effects on young people’s entry into the workforce and on the economy’s overall productivity, particularly by hindering the reallocation of labor toward the most dynamic sectors.

The Deputy Governor also noted that it remains difficult to distinguish precisely between cyclical factors—such as geopolitical tensions and trade uncertainty—and deeper structural shifts, such as the rise of artificial intelligence, demographic aging, and the restructuring of global trade.
In light of these changes, Nicolas Vincent emphasized the importance of strengthening initial and continuing education programs to better support career transitions and help workers adapt to a more volatile economic environment.

The session concluded with a Q&A session with the audience, moderated by Nathalie de Marcellis-Warin.

The full speech and video recording are available on the Bank of Canada’s website.