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The winter weather is moderating in Canada, which can only mean one thing: Federal budget season is coming. The April 16 release coincides with multiple challenges for this minority government.

Polls consistently show that more Canadians are open to a Pierre Poilievre government, including a new Leger survey that reports 48 per cent of respondents say they are living paycheque-to-paycheque — especially people under 55.

Will this be a budget to address millennial and gen-X angst?

We sometimes forget that budgets aren’t economic documents, they are fundamentally political ones. At this point, affordability is the central concern for Canadians — and that’s having political repercussions for Justin Trudeau’s Liberal government.

One specific cost — housing — continues to skyrocket, almost entirely due to the Bank of Canada hiking interest rates in its attempt to tame inflation.

Mortgage interest costs are up 55 per cent since the Bank of Canada started increasing rates and rents are up 12 per cent. Landlords have mortgages, too, and pass extra interest costs onto tenants through rent hikes. Meanwhile, tenants can’t afford to buy a house because costs are too high, so they’re staying in rentals for longer.

In the past year, the rate of increased inflation may be lowering, but the prices themselves are now permanently higher.

These crushing increases in housing costs are not borne equally. Millennials are especially hard hit.

Canadians under 45 who are lucky enough to own a home are now strapped with big mortgages and big mortgage interest payments. Millennials used to pay seven per cent of their income in interest. Two years later, it's almost 12 per cent.

A federal budget that addresses young Canadians’ affordability challenges will likely have to focus on additional pocketbook issues, such as transit and post-secondary education, writes @DavidMacCdn @ccpa #cdnpoli @cafreeland #Budget2024

Comparatively, baby boomers have smaller mortgages (if any), making them more resilient as interest rates soared. Plus, boomers have seen historic appreciation in home values, with surprisingly little decline due to interest rate hikes.

Since the 1950s, homeownership has been a symbol of middle-class prosperity in Canada, but that ship seems to be sailing for younger generations. A federal government seeking re-election needs to substantially address millennials’ affordability crisis.

What’s probably frustrating for the federal government is that many of its other major initiatives will have big benefits for millennials. The federal implementation of a $10-a-day childcare program, for instance, benefits young families — many of whom were spending the size of a monthly mortgage payment on childcare fees.

But the federal government will need to work with the provinces to expand the number of childcare spaces in order to meet demand. It will also need to ensure decent work conditions for early childhood educators to staff these expanded spaces.

Younger generations will probably benefit from the new federal dental care plan because they don't have dental benefits covered by their workplaces. The only snag is that the current dental plan isn’t available to households that earn over $90,000. Two income earners making $45,000 each are not rolling in cash, especially if they’re raising children and are getting crushed by mortgage interest rates.

Younger women will benefit from the new pharmacare plan to make birth control free.

But all those savings for younger Canadians are being overwhelmed by housing costs.

What more could this government do for millennials and gen-X in this spring’s budget?

We should, first of all, acknowledge that the fastest way for housing costs to come down is for interest rates to come down — something the federal government cannot control; that’s on the Bank of Canada.

If you take mortgage interest and rent out of the Consumer Price Index (CPI), inflation has been within the Bank of Canada’s desired target range since May. So high interest rates are not only keeping house costs high, they are also keeping the CPI high.

The federal government is constrained in this way, too: Setting the conditions for building more housing through zoning changes is certainly happening, but interest rates are also crushing new home construction because developers face higher interest rates and are uncertain about moving new units.

Even if we were building more, it takes time to build supply. Housing costs are going to get worse before they get better.

And mortgage water bombs are about to drop: We’re still months away from half of mortgage holders in Canada renewing at higher rates.

So a federal budget that addresses young Canadians’ affordability challenges will likely have to focus on other things. Childcare, dental care and pharmacare are certainly a step in the right direction. In fact, any improvements in accessibility of public services — transit, post-secondary education, and more — are pocketbook issues for young people.

The government could also look at student loan forgiveness programs like the Biden administration has done in the U.S.

The bottom line is this: The ability of this budget (and the next) to speak to millennials and gen-X in a meaningful way — their wallets and their quality of life — may be the deciding factor in the next election.

There are plenty of other key areas that need attention, but the government likely won’t deliver. Employment Insurance reform and a Canada Disability Benefit come immediately to mind, but there are no indications of movement on these files.

The budget will be released on April 16. There is only one sitting week in March, hemming in the federal government. This will be one of at most two budgets between now and a fall 2025 election.

There are no indications right now that this will be an election budget, but only time will tell. Whatever the case, it has to resonate with young voters or the writing will be on the wall for the Liberal government.

David Macdonald is a senior economist at the Canadian Centre for Policy Alternatives’ national office.