Change is in the air
The turning of the seasons means change – I find changes that coincide with springtime to be particularly inspiring. A sense of new beginnings comes with the flowers and leaves emerging from what was so recently an inhospitable landscape. As the days get longer it feels like life itself has more potential. Watching the natural world transform around us is a welcome reminder that change is possible, especially during these precarious times.
This spring has brought with it a wave of interest in our work, making it even more inspiring than usual for us at Gen Squeeze.
In the lead-up to the release of the federal budget, The Editorial Board of the Globe & Mail published a story called “The growing generation gap between what Ottawa spends on older and younger Canadians.” The Board of one of Canada’s most widely read national newspapers agrees with Gen Squeeze’s concerns about Canada’s longstanding pattern of growing spending on income supports for retirees while leaving too little to remedy the declining well-being of younger people.
The BC Real Estate Association released a new report detailing the pressures of immigration on housing. Brendon Ogmundson, BCREA Chief Economist said that “lowering price growth so that income growth can catch up to prices is integral to improving housing affordability in BC”. It’s great to see other organizations recognizing that for housing to become affordable we need home prices to stall so that earnings can catch up. Our 2022 report “Celebrating Stalling Prices for Canadian Homes” sparked renewed interest in this idea, one that Gen Squeeze has been promoting for years. The main conclusion of that report was that “our primary goal should be that home prices stall for many years ahead – or even continue to fall moderately”.
Conversations relating to generational fairness and the squeeze on young Canadians have also made their way into the House of Commons. Here are some recent remarks from Jagmeet Singh in Question Period:
“Mr. Speaker, millennials in Canada are feeling the squeeze of inflation more than the rest of Canadians. As a CBC article reports, the trustee in insolvency has concluded that Canadian millennials have been dealt a bad hand, and it is true. If we look at it, they have student debt, bad credit card debt, and post-pandemic tax debt from collecting CERB. In fact, it means that more and more millennials are filing for bankruptcy. In the interest of generational fairness, will the Prime Minister confirm today that there will be measures in the budget to give young Canadians a break?”
With a national party leader advocating for generational fairness on one of our country’s biggest political stages, we hope that it’s only a matter of time before other elected officials get on board with our cause. Check out our generational fairness champions pledge page for other elected representatives from across Canada who support these ideas.
Even our work on issues less likely to raise one’s heart rate – like interest rates and CPI – is gaining some traction. In the past, we’ve found it hard to drum up support for important policy proposals on these topics. Now that the interest rate driven housing market slowdown has made clear that monetary policy is an economic lever that wields influence, people are taking notice. A recent article in The Coast included some of my comments on the weaknesses of our inflation measurement system, while CTV Vancouver did a detailed piece describing how these same issues helped make Canadian housing so unaffordable.
In the wake of all of these exciting developments, we’ve been asking ourselves: why now? I came across a quote from Franklin D. Roosevelt in “Goliath: The 100-Year War Between Monopoly Power and Democracy” by Matt Stroller that I think provides the answer:
“Not since the dark days [of the Civil War] have the people faced problems as grave, situations as difficult, suffering as severe...The public has burned its fingers in the flame of wild speculation and has learned to fear the fire. While it still fears the fire is the time for us to act”.
FDR made these remarks back in the 30s, during The Great Depression. Following the spectacular growth of the Roaring Twenties, the stock market fell nearly 90% and the unemployment rate spiked to over 25%. The downturn had everyone paying attention to politics, and FDR seized that opportunity to rally people behind the New Deal, changing the course of history for the better.
We find ourselves in a similar, albeit less extreme, situation today. For over a decade, ultra-low interest rates fueled a run-up in the price of all assets including stocks, bonds, and even houses. During this period it was hard to convince most people that our country was on the wrong track. Can you blame them? A majority of Canadians own their home, which means they were getting richer every day. Now, without rising asset prices to cover up our problems, it’s become clear how far things have gone astray.
The good news is that we have control of how things play out from here. Ours isn’t the first economic downturn or cost of living crisis, and it won’t be the last. But with sound policy decisions we can turn things around, just like FDR did. Let’s take advantage of this moment, where people are paying attention, to create our modern-day New Deal.
Kareem Kudus is a Director and Research Analyst for Generation Squeeze.