What’s a Minister for Middle Class Prosperity? Many Canadians might ask this question now that Prime Minister Justin Trudeau assigned this new role to Mona Fortier.
Will Ms. Fortier focus on the nurses, teachers and bus drivers who bought houses decades ago and are now worth more than $1-million because of skyrocketing home prices in our cities? Or does the millionaire status of these homeowners make them rich, out of her purview?
Will Ms. Fortier be focused on the young city lawyer who can’t find a rental unit with enough bedrooms for her two children? Or does the lawyer’s salary push them out of the middle class?
The typical 25- to 34-year-old working full-time earns around $50,000, and this person is likely to be a renter. The typical Canadian 65 and older reports total income of $30,000. They are likely to be a home owner, and retired. Which person is middle class?
These questions should signal Ms. Fortier to not define “middle classness” strictly in terms of income. Middle class ambitions sit at the intersection of people’s earnings in relation to their major cost of living – housing – along with the wealth that housing has generated for many “regular” people.
Escalating housing prices have hollowed out the middle class in two directions. Some rode rising prices to the status of wealthy – without necessarily admitting it.
Others are obstructed from entering the middle class despite decent earnings, because local rents are now beyond reach for many middle incomers, while home ownership dreams are dashed.
As a result, large numbers of younger Canadians struggle without the security of tenure we used to associate with middle classness – including the security to know your child can attend the same child care or school for years, because you are not at risk of eviction. Many younger middle earners reside in rental homes that can be flipped whenever their small-scale landlord decides she wants the capital gain, or “demovicted” whenever larger landlords decide to renovate to add new rental homes on the same property.
Improving the National Housing Strategy must therefore be at the centre of Ms. Fortier’s mandate. She will need to ask herself: Is housing a place to call home, or a way to get rich? While many older Canadians had both, they now recognize their children’s and grandchildren’s prospects for making a home have been compromised.
The earnings-housing gap is one of three intergenerational tensions disrupting the middle class, with which Ms. Fortier will need to grapple. A second is government budgeting, for which she has co-responsibility as Associate Minister of Finance.
Liberal party election documents project a $21-billion deficit in 2023-24, driven by plans to increase spending on Old Age Security by $20-billion. By contrast, the Liberal platform proposes less than $8-billion for younger Canadians on promises related to child care, the Canada child benefit, better parental leave, post-secondary and housing affordability.
It’s not just the Liberal party. The Conservative and NDP platforms also featured large age gaps in spending that drive deficits. None of these parties promised to increase spending on younger Canadians at even half the investment they promised to retirees.
Such age gaps are not adequate if federal parties are serious that younger Canadians should be able to afford a good home either as renters or owners, or afford enough time at home and work when they start their families – goals traditionally held by Canada’s middle class.
Climate change is a third tension. Enriched by their housing wealth, many retirees prioritize travel at rates unfathomed by their own parents. They do so on planes, cruises and RVs that contribute significantly to climate change, and model this behaviour for other generations to repeat. We do so while the World Health Organization warns that climate change jeopardizes the conditions that younger and future generations require for health – regardless of their class status.
These tensions reveal a “metaphorical intergenerational villain” who looms amid the systems that shape our economy, politics and climate. This villain is disrupting the middle class in fundamental ways, making some wealthy, and others much less secure.
Vanquishing this intergenerational villain should be a top priority for our new Minister of Middle Class Prosperity as she pursues a Canada that works for all generations.
This piece was also published in the Globe and Mail on November 22 2019.