Gen Z Canadians Hit by Job Losses — Why Recovery Is Likely

Statistics Canada recently published new employment insurance (EI) figures that paint a difficult picture for Canadian workers, especially younger people. Over the year ending November 2025, the number of EI recipients climbed by 16.1%. Among Canadians aged 15 to 24—the cohort that largely corresponds with Gen Z—the increase was 12.4%, leaving more than 50,000 young Canadians having lost jobs during that period. These headline numbers understate the broader challenge: many gig workers, contractors and part-time employees do not qualify for EI, so actual job instability for young people is likely higher.

Young Canadians face the same economic pressures as older adults—rising costs, unstable employment and mounting bills—plus added hurdles like limited work experience and fewer professional connections. That said, Gen Z has a significant advantage: time. With more years ahead to save, invest and recover from setbacks, early financial habits can have a compound effect on future wealth. For young Canadians navigating a fragile economy, starting to save and invest now can make a substantial difference.

Economic outlook for Gen Z Canadians

Gen Z generally refers to people born between 1997 and 2012, aligning closely with Statistics Canada’s 15–24 age bracket. Below is an overview of the financial pressures and opportunities affecting this generation.

High cost of living

Inflation, rising rents and more expensive groceries have pushed household budgets to the limit. These cost pressures hit young people hard because many are at the early stages of their careers and may not have built financial cushions like emergency savings or home equity.

Unemployment

More than 50,000 young Canadians applied for EI in a single year, yet that statistic omits many who work in the gig economy, on short-term contracts, or in irregular part-time roles that do not qualify for EI. As a result, unemployment and underemployment among Gen Z are likely underreported by official EI statistics.

Employment and income

Even when they are employed, many young people must piece together multiple part-time jobs to cover living costs. A recent survey found Gen Z’s average monthly income to be roughly $1,083. Nearly half of respondents expected to take on additional work in the coming year, and about 70% reported feeling financially unstable or only somewhat stable. That combination of low income and unstable hours makes it hard to save, plan or invest consistently.

Debt

On average, younger Canadians carry less debt than older groups, but the typical debt level remains significant—around $8,500 per person—and climbed year over year by nearly 4%. That debt can limit the ability to save and can make unexpected expenses more damaging.

Savings and investments

With tight budgets, many young Canadians finish the month with very little left over. Average end-of-month balances in one survey ranged from about $9 to $16. Still, there are encouraging signs: savings among Gen Z rose by roughly 23% year over year, indicating an effort to prioritize saving despite limited resources. Building even modest savings habits now can create momentum for longer-term investing.

Gen Z’s long time horizon

For young investors, the period their money remains invested—the time horizon—is a powerful advantage. The longer funds stay invested, the more opportunity there is for returns to compound and for short-term market fluctuations to smooth out.

The magic of compound interest

Compound interest means you earn returns on both the original amount you invested and the interest that amount has already generated. Over time, this effect accelerates growth. For example, if you invest $100 with a consistent return of about 2% per period, the balance grows each period as interest is added to the principal:

	Starting amount	Interest earned	Ending amount
Month 1	$100	$2	$102
Month 2	$102	$2.04	$104.04
Month 3	$104.04	$2.08	$106.12
Month 4	$106.12	$2.12	$108.24
Month 5	$108.24	$2.16	$110.40

Savings accounts and guaranteed investment certificates (GICs) are examples of vehicles where compound interest can help balances grow safely over time.

Stock market fluctuations

Stocks behave differently because their prices rise and fall over time. While stocks carry higher short-term risk, they also historically offer stronger long-term returns than cash-equivalent accounts. A long investment horizon helps give stocks time to recover after downturns, which can be particularly beneficial for young investors.

Practical tools for young Canadian savers and investors

Most people benefit from using a mix of account types tailored to different goals—emergency savings, medium-term purchases, homeownership, and retirement. Below are common options well-suited to Gen Z Canadians.

Unregistered accounts: HISAs and GICs

Unregistered accounts have no contribution limits and are useful for emergency funds or short-term goals. A high-interest savings account (HISA) offers easy access to cash and is ideal for emergency savings. Guaranteed investment certificates (GICs) lock money away for a set term and generally provide higher rates than basic savings while protecting the principal. These options are low risk, but they typically produce lower returns than market-based investments.

Registered accounts: RRSPs, TFSAs, and FHSAs

Registered accounts provide tax advantages that can accelerate saving and investing progress.

• If you are over 18 or 19 in your province, you can open a registered retirement savings plan (RRSP). RRSP contributions reduce taxable income in the year they are made and are taxed only when withdrawn, usually in retirement.
• A tax-free savings account (TFSA) allows investment income and withdrawals to be tax-free. TFSAs can hold cash, GICs, mutual funds or stocks, and while you may have multiple TFSAs, the total contribution room across all accounts remains limited by annual and lifetime rules.
• For prospective homebuyers, the first home savings account (FHSA) combines tax-deductible contributions with tax-free growth for qualifying first-home purchases.

Each registered account has eligibility rules, contribution limits and potential tax implications—consult your bank or a financial advisor to choose the right combination for your goals.

Gen Z Canadians face real economic pressure—from job losses and rising living costs to modest incomes and growing debt. Yet time is a powerful ally. Starting to save and invest early, even in small amounts, can leverage compound growth and a long time horizon to improve financial security. Choosing the right mix of accounts and consistently contributing, however small, can help lay the foundation for lasting financial stability.