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Young people are about to get screwed by the budget — again

Finance Minister Chrystia Freeland will deliver her budget today. Young people hoping for some goodies in it shouldn't hold their breath, writes columnist Max Fawcett. File photo by Alex Tétreault

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The days leading up to a federal budget are a feeding frenzy of op-eds, public statements and other interventions aimed at convincing the government of the day to support the policy preferences of dozens of different groups and organizations.

This year has been no different, with everyone from oil and gas companies and clean energy advocates to labour and business groups stepping up to make their respective pitches. But there’s one group that doesn’t get nearly as much attention as it should: young people.

They are, after all, getting hosed on any number of fronts right now. That begins with housing, where massively overpriced markets in big cities like Toronto and Vancouver have recently been joined by increasingly unaffordable rental options across the country. And while rising interest rates have taken a bit of froth out of house prices, they’ve also made it far more difficult for new buyers to afford them in the first place.

This has any number of negative knock-on effects, from smaller family sizes and delayed saving for retirement to people being forced to leave places like Toronto and Vancouver for more affordable markets. As the recent net migration data shows, that’s already happening. And while there’s nothing wrong with living somewhere like Edmonton or Regina, there’s a certain unfairness in Canada’s biggest cities effectively pricing out an entire generation.

Then, of course, there’s climate change, where the federal government has simultaneously done more than any before it and not nearly enough for the governments that will come after. As the IPCC’s recent report showed, we’re not moving nearly fast enough to head off the worst potential outcomes from a rapidly warming planet that will be visited almost exclusively on young people and their children. Their anger over our collective indifference to the threat of climate change is both inevitable and understandable, and it’s only going to build with the passage of time.

The federal government's latest budget includes a litany of new spending and priorities. Young people, once again, are going to get the short end of the stick. @maxfawcett writes for @NatObserver

Seniors, on the other hand — and yes, that means you now, baby boomers — continue to get help they probably don’t need. Old Age Security benefits are generous to a fault, with the full amount available to those with incomes as high as $81,000 and partial payouts still made to people making $130,000 a year. In the last budget, the federal government threw in a one-time $500 bonus for anyone over 75 who’s eligible for OAS because … well, why not?

Unlike the Canada Pension Plan, which is funded by both past and present contributions, Old Age Security is paid for by today’s taxpayers. “That means today’s retirees, when they were working, supported a much lower level of elderly benefits compared with today’s workers,” the Globe and Mail’s editorial board wrote in a recent op-ed. “And today’s retirees enjoyed much lower costs for education and housing compared with today’s younger people.”

In a recent video, Generation Squeeze founder Paul Kershaw put it even more directly. "Older Canadians are getting wealthier and have more financial security, but they're not paying fully for the services that they want to use, which leaves less leftover for those who follow, like their kids or grandchildren."

So why do young people continue to get the short end of the budgetary stick, while politicians bend over backwards to accommodate older voters? Because for all the strengths of our democratic system, and there are many, it does an incredibly poor job of rewarding long-term decision-making and the people it would benefit most.

That’s because any policy that takes more than four years to show results is a leap of political faith on the part of the government implementing it — one they’re rarely rewarded for taking. As a result, for all the good talk we hear about taking care of the future and the generations to come, our elected officials almost never govern in ways that actually do that.

This hypocrisy extends across the political spectrum. Conservatives will happily invoke the interests of future generations when it comes to deficit and debt reduction, while progressives tend to focus more on the environmental and social debts we might be saddling them with. But when faced with a choice between near-term political interests and the long-term prosperity of their kids and grandkids, both conservatives and progressives tend to implement policies almost always privilege the former.

There’s no better demonstration of this than the impotent response to Canada’s ever-rising housing prices. Politicians of almost all stripes, be they progressive or conservative, are utterly petrified to do anything that would meaningfully reduce housing prices, whether that’s eliminating the capital gains exemption on primary residences or restricting access to mortgage insurance and other demand-side measures. The political math, after all, is simple — frustrated young renters might vote against them, but pissed-off homeowners absolutely will. And given the relative size advantage that homeowners have, making them angry is a guaranteed form of political suicide.

Instead, today’s budget will focus more on near-term priorities and policies that can help the government get re-elected. Many of them will be laudable, and most will help Canadians in some form or another. But when it comes to the longer-term interests of today's young people, and especially tomorrow's, nobody should be getting their hopes up. If nothing else, they should be used to that by now.

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