New research from Pearson, the world’s lifelong learning company, reveals gaps at career and learning transition points is costing Canada an estimated C$146 billion 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.
Jessica Biga Wadstein
“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,” said Jessica Biga Wadstein, Pearson, Canada Country Head.
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 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 in lost earnings.
- Education to work – the delays in moving between formal education and full-time employment accounts for C$9 billion in lost earnings.
- Changing jobs – C$26 billion 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%t of Canadian young people aged 18 to 24 were not in employment, education, or training. More than 25% 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, said Pearson.
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.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Entrepreneur. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024 and 2025.
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