Amid all the tragedies unfolding in the world right now, the plight of young people in Canada probably doesn’t rise very far up anyone’s list. But make no mistake: for all the talk coming out of Alberta right now about that province getting ripped off by the Canada Pension Plan, it’s actually Canadians under 45 who consistently get the shortest end of the political stick. As some of us mark the first-ever “Intergenerational Fairness Day,” I think that’s worth reflecting on at length.
We can start with the Canada Pension Plan, where Alberta’s latest temper tantrum is obscuring a genuine element of institutionalized unfairness that’s built into the program’s bones. It’s one that millions of young Canadians have become almost subconsciously aware of: intergenerational borrowing. As University of Alberta economist Trevor Tombe noted in a recent Twitter thread, while the effective rate of return on the CPP contributions of anyone born after 1980 is 2.3 per cent (after inflation), previous generations have seen rates as high as 23.1 per cent. The baby boomers, for example, enjoyed an average return between 4.2 and 6.1 per cent.
This is, to be clear, a perfectly acceptable form of intergenerational support. The Canada Pension Plan was in danger of becoming unsustainable, and younger people had to pay in more in order to shore up the system for both their parents and grandparents as well as future generations.
(You’re welcome, by the way.)
But this is hardly the only loan that’s been taken out on their — on our — behalf. Housing policy and local planning decisions in Canada have long been biased towards protecting the equity of existing homeowners, much of which was accumulated through no work or wisdom of their own, rather than affordability issues faced by younger people. That some politicians have recently gotten serious about this issue doesn’t excuse their many, many years of paying it almost no heed — especially as interest rates continue to bite.
Climate policy is another area where a debt is clearly being incurred. The more we punt the work of reducing greenhouse gas emissions down the road, the more onerous that work becomes. The costs associated with climate change for both local governments and the national economy will continue to grow, and our refusal to make any meaningful down payments on them right now only adds to the environmental mortgage we’re expecting future generations to pay off.
Of course, that debt is the biggest in Alberta. The collective bill on the province’s unreclaimed wells and unremediated tailings ponds just keeps growing, all while oil and gas companies remain free to shower their shareholders with record profits and growing dividend payments. In time, the refusal of the provincial government to direct more of those profits towards paying off the combined environmental debts of these companies, which could be as high as $120 billion (and growing!), will be seen as a major failure. But here, once again, future generations will be left to pay the bill.
This intergenerational inequity is not going completely unnoticed by older Canadians. Goldy Hyder, the CEO of the Business Council of Canada, called it out in a recent op-ed for the Globe and Mail. “It is long past time for us to look far beyond the next earnings call and the next election,” he wrote. “We need to make tough decisions about our future, and that might mean some form of short-term pain for long-term gain. We owe future generations far more than just apologies. We owe them action.”
He’s right, but I won’t be holding my breath waiting for it to happen. The odds of older voters suddenly embracing higher taxes and more stringent climate policies in the name of protecting the collective well-being of future generations are only slightly better than the odds of Danielle Smith crossing the floor again in the Alberta legislature.
Whether it's the high cost of housing or the low level of our climate ambitions, young Canadians are getting a raw deal right now. Why that's showing up in the Liberal government's dreadful poll numbers, and how they could go about changing them.
If anything, it’s younger voters who are shaking things up. The recent polls that put the Liberals well behind the Conservatives among younger voters for the first time in eons show they’re willing to try almost anything to change the status quo. Young people are mad as hell, in other words, and they’re not going to take this anymore.
Pierre Poilievre, to his credit, clearly understands this. No, his ideas won’t actually do much to address intergenerational inequities, and sweeping the current government out of office might do more harm than good to the longer-term priorities of younger Canadians. But Poilievre’s willingness to feel their pain and echo their concerns clearly counts for something.
The Liberal government can still learn from that, if it wants to. A good place to start would be forming the Task Force on Generational Fairness that Generation Squeeze has called for, one that would shed more light on the challenges younger people are facing. The Liberals could also try more forcefully calling out complaints about the unfairness of equalization, the Canada Pension Plan, or some other aspect of our federal system. Let everyone know there are other forms of unfairness in this country, and they deserve to be taken far more seriously than Alberta’s constant carping about Confederation. That alone might improve their poll numbers, if nothing else.