Pearson urges action as delayed transitions and job exits cost Canada $146.2 billion in lost income
Disruption from automation now accounts for $111bn in lost earnings annually in Canada.
It is the largest contributor to the estimated $146.2bn cost of career transition inefficiencies, according to Pearson’s latest report Lost in Transition: Canada’s Economic Opportunity from Closing Gaps in Learning Paths.
The report highlights that career transitions—whether from education to work, between jobs, or due to automation—are failing to support workforce stability, eroding nearly 5 percent of national GDP.
It estimates that involuntary job separations contribute $26bn in losses, while the gap between formal education and employment delays adds $9bn.
Pearson’s breakdown points to how misalignment across these transition points can restrict earnings potential and create strain on both labour supply and long-term productivity.
The average duration of unemployment following a job loss stands at 21.9 weeks.
Meanwhile, in Ontario, 24 percent of postsecondary graduates had not found a job in their field within three years of graduation.
AI-driven automation is already transforming job requirements, accelerating the pace at which skills become obsolete.
Since 2019, the number of Canadian jobs exposed to AI has surged 108 percent, with roles highly exposed to AI experiencing 78 percent more skill change than low-exposure roles.
The impact is especially acute at the entry-level, where positions such as junior developers, research assistants, and marketing analysts are increasingly bypassed altogether.
In 2023, 11.3 percent of Canadians aged 18 to 24 were not in employment, education, or training. More than one in four youth in this NEET category had never held a job.
The report also notes that 9 percent of Grade 10 students had not graduated within two years, and that early school leavers and international graduates face significantly lower employment outcomes, contributing to long-term inefficiencies.
Pearson proposes five policy areas to improve the transition from learning to employment.
These include “updating curricula to reflect future skill needs” and using AI to personalise learning and ease administrative tasks.
The report also recommends applying workforce analytics to identify shortages, incentivising employer investment in training, and embedding lifelong learning across communities and workplaces.
Jessica Biga Wadstein, Canada Country head at Pearson, said Canada is facing a widening skills gap.
She noted the need to improve education and skills development across all levels of government and stressed the importance of using AI to support workforce adaptability and resilience.
This research is part of Pearson’s Lost in Transition: Fixing the Skills Gap series, which warns of a potential global “skills chasm” emerging between employer needs and workforce capabilities.
