Globe & Mail: Financially secure homeowners have a patriotic duty to help Canada meet this moment

Originally published in The Globe & Mail on February 1, 2025

The economy is hurting almost everyone. That’s the main message Canadians have heard about inflation.

This message is dangerous. If everyone is hurting, nobody can be expected to help.

This interpretation frightens me at a time when solutions to challenges we face will require many of us to step up. We must deal with demands from U.S. President Donald Trump, overcome housing challenges, care for an aging population, fight climate change, manage artificial intelligence and reduce international conflict, along with threats to democracy.

The false claim that everyone is hurting shelters those with greater security from the expectation to recognize their relative privilege – and consider what obligations this privilege implies. Busting the myth that most of us suffer amid scarcity is essential to Canada meeting this difficult moment, and to achieving our national potential.

By privilege, I don’t just mean the top 1 per cent targeted by many on the left-of-centre. I mean the top 40 per cent, especially securely housed homeowners like me. Research shows that our wealth and savings are up. Ironically, we have inflation to thank.

Statistics Canada recently published new data from the Survey of Financial Security showing that the net worth of the typical Canadian household increased by a third during the pandemic. In 2019, the median household had $381,100 of net wealth. By 2023, this had jumped to $519,700.

Inflation of housing values drove most of these gains, especially for the country’s top 40 per cent of earners. We accounted for 60 per cent of the appreciation in financial assets since 2019, according to Royal Bank of Canada.

This insight sharpens our focus on who is really hurting. It is primarily lower- and middle-income renters who bear the brunt of rising home values that drive up rental costs and erode opportunities to save.

The interaction of age and home ownership in Statscan data makes this clear.

Unsurprisingly, older homeowners have more wealth than others, in part because they have benefited most from decades of rising home prices.

But home ownership has also been a boon for some younger Canadians. In 2019, 36 per cent of Canadians younger than 35 owned their principal residence. By 2023, 44 per cent did. Their median net worth is now $457,000. For their renting peers, it is just $44,000.

The jump in home ownership partly reflects the double-edged sword of low interest rates. They enabled young people to borrow more, but also fuelled bidding wars that drove up average prices.

This trend also reflects the “bank of mom and dad.” My analysis suggests 18 per cent of homeowners under 35 now have no mortgage – more than at almost any time since 1977.

Young adults are more likely to be mortgage-free when older homeowners use some of their housing wealth to help their kids. While such intergenerational solidarity within families is lovely, the trend is trouble for society. We don’t want housing security to be out of reach for Canadians who lack strong ties to current homeowners.

Resisting this risk requires changing the way we talk about inflation. We must be honest that inflation of the most commonly held asset in Canada – principal residences – has made many households wealthier, including some young people.

Since housing wealth windfalls more than offset higher prices at the grocery store and gas pump, it’s time to acknowledge that inflation cuts both ways: helping and harming large groups of Canadians.

As governments respond to risks facing Canada today, they must keep this nuance in mind.

It won’t be reasonable to expect more of lower- and middle-income renters, for whom the burden of housing, grocery and energy inflation is heaviest. Nor is it reasonable to continue leaving large deficits for younger and future generations to pay.

It will be reasonable to expect more from the 40 per cent whose assets have appreciated, especially financially secure homeowners.

We must ready ourselves to protect Canada in these challenging times by recognizing the relative privilege that owning a home provides to our personal finances, and acknowledging that this privilege implies obligations.

The obligation may be to expect less, or pay more. Less, for example, from Old Age Security, so that government can repurpose revenue without raising taxes to address international pressures or subsidize deeply affordable housing for those struggling with inflation. Or perhaps we should expect more fees and taxes, to fight climate change, pay for long-term care for the aging population and meet North Atlantic Treaty Organization expectations.

Either way, the 40 per cent of us benefiting most from inflation should anticipate that the need to shore up Canada’s strength in this time of upheaval will soon be affecting our personal finances.

Dr. Paul Kershaw is Founder, Lead Researcher & Executive Chair of Generation Squeeze. He is a policy professor in the UBC School of Population and Public Health, and Director of the UBC Masters of Public Health program.