Globe & Mail: No party can fix housing without compensating millennials and Gen Z

Originally published in The Globe & Mail on March 28, 2025

As federal leaders jockey to show who can best stand up to U.S. President Donald Trump, domestic issues that topped the national agenda months ago now receive shallower treatment. Among them: the housing unaffordability challenges facing younger Canadians, and what we’re prepared to do to address them.

Conservative Leader Pierre Poilievre captured the stakes well last summer when he said, “We had a deal in this country … You get a job. You get a house by your 20s. That deal is broken.”

When his video surfaced, I hoped the next federal election would spark serious dialogue about why this deal started to break down at the outset of the new millennium.

We still need this conversation, because too many gloss over the political bargain that ended the deal. Canada’s politicians decided to protect the housing wealth being gained by older homeowners at the expense of obliging millennials and Gen Z to suffer higher housing costs.

I say political bargain, because housing affordability isn’t just about personal finances. It’s a structural problem shaped by policy decisions.

Consider this. Using Statistics Canada data, I calculated the net value of Canadian principal residences – the total combined dollar figure for all of those homes minus the mortgages people owe. That amount grew by $5-trillion since 1977 (after adjusting for inflation). While 70 per cent of the increase can be explained by population growth, the remaining $1.5-trillion resulted from rising prices. Canadians over age 55 reaped 60 per cent of this windfall, which didn’t happen by accident.

Across multiple levels of government, and over time, Canada chose to protect housing equity for existing homeowners, even when that protection meant higher costs for renters and aspiring owners.

In 2015, then-B.C. Premier Christy Clark insisted any housing action must help “first-time homebuyers get into the market while protecting the equity of existing homeowners.” A decade later, Prime Minister Justin Trudeau echoed that: “Housing needs to retain its value. It’s a huge part of people’s potential for retirement and future nest egg.”

Such political judgments compel younger Canadians to absorb higher costs to uphold a housing system that disproportionately rewards older homeowners like me.

Millennials and Gen Z have offered a profound expression of intergenerational solidarity. They pay higher rents, take on larger mortgages, delay or abandon homeownership and start families later – not because they want to, but because our political choices leave them no alternative.

Since younger Canadians are already doing their part, the question now is whether political leaders are ready to do theirs by making compensation part of the election conversation.

Compensation needn’t mean taxing the housing wealth owners have gained, although adding progressivity to property taxation merits consideration. What compensation should absolutely include is revisiting government spending priorities and tax expenditures.

Programs such as Old Age Security, the Age Credit, the Pension Income Credit and retirement income splitting provide billions annually to retirees, many of whom also benefit from large housing-wealth gains.

Rather than asking younger generations to keep funding these benefits through deficits and a growing share of their taxes, Ottawa should shift eligibility for higher-income retirees who don’t need government subsidies, and use the savings to reduce costs for millennials and Gen Z.

Unfortunately, that’s not what we are hearing yet in this election campaign. Instead, Conservative and Liberal leaders promise billions in income tax cuts for everyone. These make it harder to balance the budget and ignore how many older homeowners like me have gained housing wealth that is already tax-sheltered.

Or they make grand promises to “build more homes,” which we should do. But more supply alone won’t fix the generational imbalance.

Years ago, CMHC estimated that Canada needed 3.5 million additional homes by 2030 to restore affordability to early-2000s levels. That would have required construction of 437,000 homes a year. Actual construction only increased to around 250,000.

When leaders imply that new GST rebates alone will jump-start enough new affordable construction to close this gap, we’re being duped. Steve Pomeroy shows there are roughly 550,000 resales of existing homes each year, compared with 150,000 newly constructed homes. So, most real estate transactions would not be affected by the proposed changes to GST.

There is no fixing Canada’s housing woes until parties acknowledge the harm many young Canadians endure to protect $1.5-trillion in housing wealth windfalls, and offer a plan to compensate them.

Let this be the election when political leaders and older homeowners stop taking for granted the protection provided by millennials and Gen Z, and instead recognize it for what it is – a remarkable show of intergenerational solidarity they offer at their own expense.

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.