Young Canadians can be forgiven for being a little confused by the latest federal budget. For the first time in their lives, they are looking at a budget that explicitly attempts to address their needs and interests, and listening to politicians fighting for their votes. If their growing political power wasn’t evident to them before, it should be now.
As the generation tightens pointed out in his analysis, “Never before has the Government of Canada formally recognized that hard work is not paying off for today’s youngest Canadians as it did for previous generations. Budget 2024 labels this sad reality as the starting point of a new economic framework to achieve ‘Equity for every generation’.” At long last, young Canadians are having their moment in the political sun.
But while the Liberal budget does more than any other in Canadian history to address intergenerational inequality among younger people, it still doesn’t do enough. According to Generation Squeeze, Budget 2024 increases spending on old-age security by $31 billion and sends an additional $17 billion to health care, which is disproportionately used by those over 65. But it only allocates $2 billion for housing, with an additional $8 billion for measures to build a clean economy. In other words, the intergenerational balance is still very skewed.
It is also possible that it will get worse. As more boomers leave the workforce and the ratio of working-age residents to retirees continues to decline from a high of seven to one in the 1970s to just three to one today, the pressure on today’s taxpayers It will only continue to grow. . Young Canadians are paying the price for the failure of previous generations to adequately plan for this demographic inevitability, and it’s something the Conservative Party of Canada seems determined to ignore. As the Generation Squeeze analysis concluded, “Any party that promises to easily balance the budget without raising taxes or reducing retiree spending ignores this hard truth.”
To their credit, the Liberals did propose a modest capital gains tax increase that will affect only a small portion of the population. That portion is heavily marked by wealthy investors, tech entrepreneurs and others who don’t fight to get their message heard. To no one’s surprise, they have said that the increase – which returns the so-called “inclusion rate” of capital gains to where it was in the 1980s and 1990s – will scare away investment, kill entrepreneurship and force the so-called “ job creators.” create their jobs elsewhere.
Derek Holt, vice president and head of capital markets at Scotiabank, went even further. “[Justin] Trudeau and [Chrystia] “Freeland is ripping off Canadian youth, who will be the ones who will have to foot the bill for many years to come,” he said. he wrote in a recent column in it Globe and mail, one of many who have written lately attacking the government. “It is an insult to present a budget like this as something that benefits young Canadians who have fled the Liberals en masse.”
The biggest insult, however, is that older Canadians use the supposed long-term well-being of young people as a hobbyhorse for their own short-term interests. Conservatives have been doing this for decades, of course, talking about the risks associated with deficits and debt while studiously ignoring the ever-increasing price tag associated with climate change.
Holt shows his hand here by suggesting that the federal government is quietly laying the groundwork for a capital gains tax on people’s primary residences, and that this is somehow a bad thing. “Would this government, for example, tax gains on the equity in the homes of relatively wealthy people? “I wouldn’t trust them.”
As it happens, I don’t think they have the courage to do this. But taxing a portion of the capital gains (say, anything worth more than $500,000) that many boomers have accumulated in their own homes without any real effort would be exactly the kind of bold, brave move that would show serious commitment to the issues. of intergenerational equity and justice.
Young voters are very angry and they are not going to take it anymore. Those who try to please them (or worse, use them as stalking horses for their own priorities) would do well to remember that.
What really bothers Holt, both when it comes to the treatment of capital gains and whether they can be applied to people’s homes, is simply that the federal government is asking Canada’s wealthiest citizens to pay a little more than they have paid in the past. And that’s fine: if people don’t want to pay more taxes, they have the decency to just say so. A reasonable argument can also be made about the importance of encouraging entrepreneurship and risk-taking, and how this budget potentially stands in the way of both. But if you want to make that argument, well, do it. Let’s stop using young people and their future (our future) as political support.
Young voters could well throw the Trudeau Liberals out of office for failing to take the housing affordability crisis seriously and allowing an economic fire to spread into a veritable existential inferno. They may also decide that Pierre Poilievre’s complete indifference to climate change and his clear preference for cutting rather than building is not the solution to his problems. But whatever the outcome of the next election, at least the decision will finally be yours.