TORONTO — A weaker economy and rising costs are leaving little room for small businesses to hire and train inexperienced youth, a new report suggests.

While small businesses remain the “training ground” for many young people entering the workforce, a survey by the Canadian Federation of Independent Business says small businesses are facing challenges from weak demand and rising payroll costs.

That’s leaving many business owners with fewer resources to hire and train young workers.

“For many small businesses, taking a chance on someone with no experience, especially when training requires considerable time and effort, is simply not feasible in the current climate,” the report said.

As many small businesses prioritize survival over growth, young people are left with fewer possibilities to secure their first job, which is often crucial to gaining work experience and climbing the career ladder.

“These pressures are producing a generation with limited foundational work experience, potentially leading to future gaps in the small business workforce,” the report said.

Youth unemployment rose to 14.3 per cent in April, Statistics Canada said. That’s hovering close to 14.7 per cent in September 2025, the highest level of youth unemployment in 15 years outside the COVID-19 pandemic period.

The report also showed there’s a mismatch between job seekers and employers in their search behaviours and job expectations.

Hiring youth through personal connections and direct referrals remained the go-to way for 62 per cent of small businesses to find new hires — a relatively consistent trend over the years, the report said.

Forty-four per cent relied on online job boards to hire workers, followed by 30 per cent of those who found workers through social media.

CFIB ran an online poll for 1,540 small business owners across the country between Jan. 22 and Feb. 12. A probability sample with the same number of respondents would have a margin of error of +/- 2.50 per cent, 19 times out of 20.

Youth, meanwhile, are more likely to rely on online job boards than to leverage personal connections, the report showed.

An Angus Reid online survey found nearly three-quarters of youth surveyed were using online job boards, while about half looked to personal connections. Some job seekers also used school or post-secondary career services or co-op programs.

The Angus Reid Public Opinion Poll, commissioned by CFIB, polled 308 youth aged 18 to 24 between March 10 and 13. A probability sample of this size has an estimated margin of error of +/- 5.58 per cent, 19 times out of 20.

For young job seekers, wages were the most important aspect of a job. Eighty-three per cent of youth surveyed said their top priority was wages, while that number jumped to 92 per cent among university graduates.

“Young people who invest in post-secondary education expect their earnings to reflect that investment in human capital,” the report said.

Fifty-six per cent of small businesses said they offered competitive salaries and wages to attract young workers.

However, the report said there seems to be a mismatch between wage expectations among youth and the pay they’re being offered, “with many small businesses reporting that younger hires often expect starting salaries disproportionate to their experience.”

This report by The Canadian Press was first published May 20, 2026.

Ritika Dubey, The Canadian Press