We Shouldn’t Need Drake To “Take Care” Of Our Problems
From “God’s Plan” to Lasting Change
Before getting into this week's story, we just wanted to say that we are so thankful that you decided to subscribe to our Substack, which we hope to grow into a place where passionate Gen Squeeze supporters can connect, share ideas, and help us fix Canada’s broken generational system. By sharing our work and contributing to discussion, you are helping our cause. We’re eager to get to know you better, so we hope that you’re able to attend our community call on November 16. You can find all of the details here.
Read on and check out our newest video for a sneak preview of some past policy chickens we’ll be discussing during this event and how a federal Generational Fairness Task Force can clean up their mess:
Having grown up with Drake’s music, it was exciting to have the opportunity to see him perform in Toronto last month.
His love for Toronto was on full display during the concert. He performed a spoken word poem about Toronto. He advocated for “more community centers, better leadership, less guns.” The crowd really went wild when he offered to pay for the tuition and medical care of a few lucky fans.
This got me thinking…
We Canadians are nice people, we want the best for others. We love to see grand displays of generosity like Drake’s. Our kindness doesn’t stop there; we will go to any length to ensure our family and friends have whatever they need. So why don’t we put the same energy into building a society that makes it easier for everyone to succeed?
Generosity and individual effort can only compensate so much for a broken system. We live in a world where hard work doesn’t pay off the way it did for previous generations. As Generation Squeeze founder Paul Kershaw mentioned on CBC Radio’s The Current (he comes on around minute 35), it used to take 5 years for an average-earning Canadian to save up a 20% downpayment for an average-priced home. Now it takes 17 years. No amount of hard work can make up for this.
As Jagmeet Singh mentioned on our podcast, we didn’t end up in the mess we are in today by accident. Short-sighted government decisions made decades ago are causing many of the problems we’re dealing with today.
As I’ve written previously, this means that there is reason for hope: “Public policies are within our control, so it’s our collective decisions that got us into this mess. And since we created the mess, we also have the power to clean it up.”
Drake’s actions are kind, yes, but we shouldn’t need celebrities to pay off student debt or medical bills. Creating the country we want shouldn’t be left up to random acts of celebrity heroism. This is a job for public policy.
There is deep cynicism about the potential for our governing institutions to fix our problems. We get it – and we’re right there with those of you fed up with the slow pace of change. But the reality is that to create lasting change, we need to fix our broken systems, rather than individually hacking them in order to cope.
Not everyone seems to understand this.
Outdated policies are harming our housing market, public finances, and environment. Paul put together the five specific examples below to illustrate how past policy decisions are negatively affecting us today, and how we could change them for the better.
Last century, Statistics Canada designed a measure of housing inflation that downplays the cost pressures facing younger Canadians aspiring for ownership – like how much of a down payment they need to save, and how large a mortgage they need to borrow. By under-reporting housing inflation, Statistics Canada influenced the Bank of Canada's monetary policy decisions to keep interest rates lower. While cheap credit has perks, it also has a dark side, enabling many (including investors) to borrow ever larger mortgages used to bid up home prices. This fueled the surge in home values that now lock out many younger residents and newcomers of any age. Better measurement of housing inflation is necessary to reduce the harm caused by this darker side of cheap credit.
In 1972, the federal government created a tax shelter for housing that treats housing wealth differently from all other assets. The homeownership tax shelter fuels a cultural addiction to rising home prices because housing can deliver near-tax-free returns on investment. We can disrupt this addiction by inviting households fortunate enough to own the most valuable 10% of homes to contribute more in annual property taxation so governments can cut income taxes for middle and lower-earners, and raise funds to invest in deeply affordable rental and co-op housing.
In 1994, the federal government withdrew from decades of housing investment. This dramatically reduced the number of affordable, non-profit homes and limited federal influence on municipal zoning bylaws to encourage density. The National Housing Strategy launched in 2017 was a partial remedy. The next step is to align the mandates of the Canada Infrastructure Bank and the Canada Mortgage & Housing Corporation to scale up investment in deeply affordable and green housing. See section 5 of this report to learn more.
Last century, governments let citizens and industry off the hook for paying enough for their pollution, leaving younger people and future generations to inherit a legacy of extreme weather and growing climate risks. Canada’s 2019 pollution pricing legislation is fundamental for remedying this decades-long failure because Nobel-prizing winning research shows that people and businesses pollute more when it’s free or cheap to pollute. Studies already show that climate change will cost our economy billions in damage and lost opportunities, while the World Health Organization identifies climate change as the greatest threat to human health in the 21st century. Even amidst affordability challenges, we must pay for our pollution, because we can’t solve our wallet problems by neglecting our ecological problems.
When federal governments designed our Old Age Security (OAS) and medical care systems in the 1950s and 60s, they failed to account for the size of the Baby Boom. Back then, there were seven working-age adults for every retiree – today, there are only three. Yet retired boomers expect the same (or better) services, even though there are far fewer working-age Canadians paying taxes to cover these costs. The consequences for our public finances – and for the wellbeing of younger people – are enormous. Growing bills for retirees leave little revenue to invest in boomers’ children and grandchildren, while also saddling younger and future generations with more and more public debt as governments kick unpaid bills for retiree medical and income support down the road. We must restore revenue resiliency for OAS and medical care to protect healthy retirements for our aging population. But we must do this in a way that safeguards enough public funding to improve the fiscal, housing, and climate legacy that today’s aging population is leaving for their children and grandkids.
Lastly, for any Albertans out there, Gen Squeeze founder Paul Kershaw will be speaking at the Parkland Institute’s 27th Annual Fall Conference, which runs from November 17-19. You can attend either virtually, or in person at the University of Alberta campus.
That’s all for this time, thanks for reading.