Lost In Transition: Gaps in Career Paths Costing Canada's Economy C$146 Billion Annually
TORONTO, July 23, 2025 /CNW/ -- New research from Pearson (FTSE: PSON.L), the world's lifelong learning company, reveals gaps at career and learning transition points is costing Canada an estimated C$146 billion dollars in lost earnings.
Pearson's "Lost in Transition: Canada's Economic Opportunity from Closing Gaps in Learning Paths" details the economic and personal impact of learning gaps during major career transitions - from formal education to work, moving from one job to another, and disruptions caused by AI automation.
Paying the price for broken career pathways
Key findings from the report include:
- The total cost – career transition inefficiencies and skills mismatches cost the Canadian economy C$146 billion dollars in earnings annually, or nearly 5% of national output. That figure is broken down as follows:
- Automation disruption - as parts of jobs become automated, individuals needing to find new roles accounts for C$111 billion dollars in lost earnings.
- Education to work – the delays in moving between formal education and full-time employment accounts for C$9 billion dollars in lost earnings.
- Changing jobs – C$26 billion dollars is lost in the transition from one job to another as a result of involuntary job separations, such as redundancies.
- Generation at risk - In 2023 11 percent of Canadian young people aged 18 to 24 were not in employment, education, or training. More than 25 percent of young Canadians aged 15-24 that were not in employment, education or training, never held a job.
Five actions to build a resilient workforce and drive economic growth
Recognizing that responsibility for education and training sits largely with provinces and territories, while key labour-market tools reside federally, Pearson has identified five key areas where additional support and programming can further strengthen the efforts already being made by governments. These recommendations aim to enhance ongoing initiatives to mitigate economic losses and build a more resilient workforce. They include:
- Supporting educators with a future-facing curriculum that continues to build foundational knowledge and skills while adapting to technological, societal, and economic shifts.
- Use AI and technology to personalize learning and reduce administrative tasks for educators, giving them more time to focus on teaching students how to learn, nurturing curiosity, critical thinking, and a love of learning.
- Use AI-driven technology to understand workforce trends and needs, which can help inform education policy, develop flexible skilling pathways, and allow for targeted interventions that mitigate workforce shortages.
- Incentivize organizations to invest in skills development through tax incentives, levy reforms, and public-private partnerships.
- Government, businesses, and educators must collaborate to champion policies and initiatives that instill a culture of continuous learning throughout workplaces, communities, and daily lives.
Jessica Biga Wadstein, Pearson, Canada Country Head said "Canada is facing a widening skills gap that is threatening our economic future. We have an immense opportunity to enhance education and skills development at the local, regional, and federal level. It's crucial that Canada strengthen its commitment to harnessing the power of AI to build a more adaptable, resilient workforce that will power sustainable economic growth and long-term prosperity."
This report is part of Pearson's "Lost in Transition: Fixing the Skills Gap" research series that warns of a potential global "skills chasm" between employer needs and employee capabilities and urgently calls for a fundamental shift in approaches to learning and skills development.
About Pearson
At Pearson, our purpose is simple: to help people realize the life they imagine through learning. We believe that every learning opportunity is a chance for a personal breakthrough. That's why our c. 18,000 Pearson employees are committed to creating vibrant and enriching learning experiences designed for real-life impact. We are the world's lifelong learning company, serving customers in nearly 200 countries with digital content, assessments, qualifications, and data. For us, learning isn't just what we do. It's who we are. Visit us at pearsonplc.com.
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