Canada’s economy: Looks great on paper, but how does it feel to you?

For this week’s top story, we’re looking at why economic headlines look positive, but Canadians are feeling the pinch.

By Jared Lindzon

The latest figures for January show a 16-month low in the unemployment rate, which dipped to 6.5%,, but Canadian job seekers—and some of the numbers behind the rate—are telling a different story. And for Jenna Turino, the good news offers a glimmer of hope before being extinguished by her current reality. Turino has been looking for a job since she graduated with a degree in marketing from Toronto Metropolitan University over a year ago.

“It’s mixed emotions,” says Turino, who currently works multiple part-time jobs and lives at home with her parents. “It excites me at first because it makes it sound like there are opportunities for me and for lots of other people in my position.” But, she adds, “it’s also a little upsetting after you try so hard applying.”

Turino says she assumed that earning the credential would open doors to her early career. “I’ve applied to countless, hundreds and hundreds, of jobs. Either I hear a ‘no,’ or I don’t hear back, or it just doesn’t work out for various reasons,” she says. “So, it’s definitely really hard to find a job right now.”

It’s not just those struggling in this slow job market that feel our current measures of economic opportunity are misaligned with their experiences. Now prominent economists think the employment data as well as other major economic indicators need a refresh to better connect with the reality Canadians face.

Why the headlines about the economy don’t always tell the whole story

On paper, the economic picture doesn’t look all that bad, especially given the initial expectations for 2026. Though hovering near zero, GDP (gross domestic product) remains in positive territory, while the 6.5% unemployment rate is lower than many economists expected.

Those headline statistics, however, don’t tell the real story of how Canadians are faring financially; especially those who are looking to enter the job market, like newcomers and recent graduates. January’s lower unemployment rate, for example, isn’t the result of exceptional job growth; it’s actually a reflection of fewer people actively looking for work.

“When we see numbers like headline inflation sitting close to what the Bank of Canada likes to see, that’s not capturing the type of price pressure that Canadians are feeling at the grocery store checkout, or on the cost of shelter,” says Shannon Terrell, a certified educator in personal finance (CEPF) and NerdWallet spokesperson. “These are non-negotiable expenses that Canadians simply cannot opt-out of.”

More telling of Canadians’ economic reality, says Terrell, are Canada’s household debt levels, which are the highest among the G7, record levels of food bank reliance and low levels of consumer and business confidence.

“In particular, younger Canadians are facing an incredibly difficult job market,” she says. “Youth unemployment is still sitting at double the national rate, and that creates a domino effect for Canadian youth who are trying to enter the job market for the first time.”

In practice, that means many young people are living at home longer or working low- or minimum-wage jobs, sometimes despite having earned university degrees.

“Achieving financial independence, being able to move out of our parents’ home, is becoming tricky,” says Ritika Saraswat, founder and CEO of Redefined, a non-profit that offers career resources to young Canadians and newcomers. “When you don’t have a full-time job, you might have to work different part-time jobs, and that money is not enough to pay your rent, especially in big cities like Toronto.”

Raising the poverty line

In his now-viral Substack post published in November, American portfolio manager Michael Green suggested that his country’s measure of poverty—which is used both to tell the country’s economic story and distribute financial assistance—is out of step with reality.

In it, he argues that tying the poverty line to the consumer price index (CPI)—which it has been since the measure was introduced in 1963—misses the point, as it weighs price inflation for household staples and luxury items the same.

“From 2003 until about 2015, the inflation rate averaged about 1.9%, which is very low,” he tells The Get. “An academic study found that the poor were actually experiencing an inflation rate of about 2.5%, while the wealthy were experiencing inflation of about 1.3%, and you can do the math on what that means over 10 years.”

The U.S. poverty line in 2025 was $15,650 for individuals, and $32,150 for a family of four.

Instead, Green went back to the original parameters that defined the metric in 1963, which assumed food costs made up one-third of household budgets, determined by multiplying the USDA’s minimum food budget per person by three.

“If I do that same calculation… it would suggest that the poverty line should actually be closer to about $100,000, which is exactly the math that emerged when I use things like the MIT Living Wage Calculator,” he says. “In New York City, it’s about $180,000; in San Francisco it’s $170,000—all of which are so incredibly far removed from the official metric.”

The same is true of Canada’s cities, where average earnings for young people leaves them as much as $1,500 shy of average monthly living costs, according to a recent study by RBC.

Young people are feeling disillusioned about money

That gap isn’t just financial; it’s also having psychological repercussions, changing how the country’s youth feel about finances overall.

According to a recent study on Young People and Money by Canadian research consultancy Faster Horses, young Canadians are losing faith in the financial system, which has failed to deliver the same economic opportunities it did for generations’ past. “They’re being told that things are great, they’ve grown up with specific view of what success looks like, and more and more that is completely unattainable for a variety of reasons, and that creates this emotional dissonance that people have to navigate,” explains David Akermanis, the founder of Faster Horses.

Many young people are on the wrong end of what has been widely described as a K-shaped economy, he explains. That’s where those who are doing well are seeing their wealth grow while those who are struggling fall further behind.

Some young Canadians are losing faith in the traditional pathway to economic stability, namely through higher education, a well-paying job and a gradual climb up the corporate ladder. And Akermanis fears some are reacting by adopting riskier financial behaviours, like speculative investing.

Canadians are investing at a younger age, but not always in a healthy way

According to the Faster Horses study, Canada’s youth are investing earlier than any prior generation, as 74% of Canadians aged 18 to 25 own at least one investment, compared with 56% of American youth, and 25% of Gen Z (both Canadian and American) say they began investing before their 18th birthday.

“Not everyone is investing in an ETF (exchange-traded fund) or and something that’s built for the long term; there’s a lot of very speculative behaviour,” Akermanis says. “Young people who are engaged in options trading or single-stock investing are doing it not with a long-term investment strategy in mind. They’re investing, but not for their future.”

In other words, young people aren’t entering the market to build a nest egg. Instead, many are trying to hit a quick jackpot with meme stocks, crypto currencies and other speculative assets, which are often touted on social media as the best way to “beat the system” that many feel is stacked against them.

That, Akermanis says, has resulted in what cultural theorist Lauren Berlant labelled “cruel optimism,” where the things that one clings to for hope is the same thing that keeps them stuck. Playing the market helps them feel in control, even if they’re doing so in ways that are more likely to exacerbate the problem, he says. Over time, those negative interactions with the traditional financial system make them feel even worse, highlighting the need for more financial education.

Where Canadians are learning about money

In the absence of reliable financial education, Akermanis says many look to social media, which tends to be rife with bad advice.

“Young people are looking for tools and products and services from financial services organizations that are reflective of the digital world that they live in,” he says, adding that banks’ digital apps seem to be coming up short. “I think what they’re ultimately looking for are tools that give them a sense of agency.”

Akermanis, Terrell and Saraswat all agree that young Canadians are lacking access to robust and reliable financial education, which is making them feel even worse about an economic system many see as failing to deliver on its promise.

“It’s important to start learning earlier, which can help us plan things better and really know what’s right versus what’s not,” Saraswat says. “Even something simple like banking or investing, what the rules and regulations around those things are, I feel like that’s not something we get educated on as much as we should.”

With files from Lisa Hannam.

Jared Lindzon is a Toronto-based freelance journalist and author writing for publications like The Toronto Star, The Globe & Mail, Fast Company, TIME Magazine, and others. His first book, Do More in Four: Why It’s Time for a Shorter Workweek, was published by Harvard Business Review Press on January 13.

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