Younger Canadians are struggling to afford housing and raise families while worrying about growing public debt and the planet’s future livability. As countries around the world come together to mark the first international Intergenerational Fairness Day on 16 November 2023, it’s clear that Canada is not alone in experiencing these harmful trends, writes Andrea Long of Generation Squeeze
Generation Squeeze is championing generational fairness to preserve what Canadians hold sacred – a healthy childhood, home and planet – so we all leave a proud legacy. Generational fairness means young and old alike have the chance to thrive, while being good ancestors to those who follow in their footsteps. Within families, generations care for one another and strive to create a better future for their kids and grandkids. We want the same intergenerational solidarity and long-term stewardship from our governments.
Today in Canada, hard work no longer pays off the way it did for previous generations. The reasons for this have little to do with decisions made by younger people. Economic precarity isn’t the result of drinking too many lattes, eating too much avocado toast, or failing to create an adequate financial plan. Rather, past policies enacted by older generations are eroding the value of younger people’s hard work.
For several decades, governments have let the present down with short-sighted, harmful decisions that are diminishing Canada’s promise to younger and future generations. This harm wasn’t intentional, yet we failed to change course once the risks became clear and predictable. Now, these harmful past policy chickens have come home to roost.
Housing, the epicentre of generational tensions in Canada
Canada’s housing system is shaped by a decades-old decision to shelter housing wealth from taxation in a way that no other asset is sheltered. The legacy of this policy is that many (especially older) home owners have extracted enormous wealth from the housing system, as rising prices increased the value of their homes.
The same rising prices have left many younger people, renters of any age, and newcomers to Canada facing crushing unaffordability. This is forcing many to make big adaptations to where and how they live and work, and their plans to start families – while also eroding mental health and wellbeing.
It’s no surprise then that Canada ranks at the bottom of the G7 on housing affordability. Windfall housing wealth has upended traditional class boundaries, shifting many home owners with regular incomes into the wealthiest percentiles – while growing financial precarity for those struggling with rising rents.
Canada’s growing public debt is another harmful intergenerational policy legacy
Most of the funds Canadian governments draw from current economic growth are extracted by retirees to pay for their income supports and medical care. Predictably, these costs are increasing as the large baby boom generation ages, especially given that Canadians expect to live 7-10 longer compared to when these programs were first designed. Fertility rates have simultaneously declined – a trend recent data links to younger people’s affordability concerns and lack of access to suitable housing. This means there are fewer working age adults contributing the tax dollars needed to pay for retiree (and other) important benefits.
The result is that today’s retirees expect the same (or better) services when there are only 3 tax-paying working age residents per retiree as they did when there were 7 workers for every retiree. Canadian governments have failed to adapt their revenue plans to these changing demographics, choosing instead to crowd out spending on younger and future generations to make room for retiree spending – and then financing cost overruns by ramping up debt. This pattern leaves massive unpaid bills to those following in our footsteps.
What these (and other) examples have in common is the failure of contemporary policies to live up to the intergenerational golden rule: to treat other generations the way you’d want your own to be treated. To defend this principle, Gen Squeeze is calling on Canada’s federal government to create a Generational Fairness Task Force. This Task Force will be charged with cleaning up the messes left by Canada’s past policy chickens – and stopping more bad eggs from hatching.
The Task Force will enshrine responsibility for generational fairness more explicitly in the functions of government. This is important, because there’s no ‘silver bullet’ to resolve intergenerational tensions at the heart of housing unaffordability, growing public debt, climate change, or other pressing policy crises. Coordinated action across a range of policy levers is needed – and that requires bringing a generational lens to Cabinet and Treasury tables where key decisions are made. This structural change is what a Generational Fairness Task Force will offer, shifting the way in which governments set priorities and allocate budgets writ large.
On Intergenerational Fairness Day, Gen Squeeze will be urging all elected representatives to support a Generational Fairness Task Force as the right tool to identify and fix the intergenerational tensions that are a root cause of many pressing policy challenges. By shining a light on readily available solutions – and holding Canadians and their governments accountable for implementing them – the Task Force will help governments to restore Canada’s fading promise for younger and future generations.