With eight days to go before the 2021 Federal Election, the three major parties are promising all sorts of incentives to secure the votes of Canadians.
However, when it comes to the futures of millennials and generation Z, some financial experts say the Liberals, Conservatives and NDP could be doing more for these demographics.
Millennials represent the largest generation of Canadians and make up 27 per cent of the population, said Christopher Dewdney, a certified financial planner and principal at Dewdney&Co in Toronto. Despite their size, he said, millennials remain overlooked when it comes to the current election.
“The focus of all the major party platforms is toward their parents, not them,” he said.
While parties will need to consider the budget and ever-increasing debt levels, Dewdney added, younger Canadians should still be a priority.
“This generation is dealing with higher student debt as well as substantially higher cost of living than the [generations] before. All parties should acknowledge this and move towards doing more,” he said.
One area in particular that could be improved upon is student debt reduction, deferral or forgiveness, he said.
The NDP is the only party to make student debt forgiveness part of its platform. While the party has promised to forgive up to $20,000, Dewdney suggested moving that number up to $30,000 would be more effective.
“I believe that, by [the NDP's] own admission, the average amount of debt is closer to that $30,000 number. It doesn’t seem like much but it is material, especially for someone struggling to build up savings towards a down payment.”
Jason Pereira, partner at Toronto-based Woodgate Financial and president of the Financial Planning Association of Canada, said housing is a key issue for young Canadians right now, but no politician wants to do what’s necessary, which is drop housing prices.
“There is a fundamental difference between the concept of affordability and accessibility. Affordability means its easier to afford a home and that means, on average, that people are making more money or things cost less. Accessibility is about putting programs in place to try to make it easier to get a home without changing anything else,” he said.
“One of the problems with Canadian housing is the fact that no one has been willing to do anything that is going to negatively impact prices. But, you can’t fix the housing crisis without a negative impact on the pricing. So, we’ve seen instead a bunch of initiatives announced by all of them that would actually make the housing crisis worse,” he said.
For instance, he explained that the Liberals want to create an investment savings account, called a First Home Savings Account, that would allow people under 40 to save $40,000 toward the purchase of a new home, with deposits and withdrawals tax-free.
“The problem is we already have the ability to save $115,000 roughly with the RRSP and TFSA. An individual saving $40,000 in a city like Toronto is not the problem. All they’re basically doing is making it easier to save more, to then, in turn, take on more debt and put yourself into greater financial difficulty,” Pereira said.
Further, while all three major platforms aim to increase housing supply with low-income housing availability, it’s actually up to the provinces to roll it out. “The issue is that they will have to deal with the red tape at the provincial and municipal level and this will impede the ability to roll it out quickly,” Pereira said.
“There is nothing that any of them of are promising that will actually do anything but make the situation worse. They’re all throwing money at the problem. And, when you throw money at the problem, you basically have more buyers, which only pushes prices higher because demand has shifted without a corresponding increase in supply to offset it.”
Proposals for the rental market aren’t looking promising either, according to Pereira. For instance, the NDP is offering $5,000 in annual rent subsidies but that money is likely to flow directly to landlords, and could lead to a push for higher rent.
“The problem is how many votes is someone going to get by standing up and saying we need to lower everybody’s housing price by 20 per cent?” he said. “No politician would do that. There’s no votes to be garnered there.”
When it comes to child care, another popular topic for younger Canadians, Pereira said the Liberals and the NDP are doing the right thing for this demographic by offering child care for $10 per day.
Pereira also noted that climate change will be a hot-button issue for young Canadians in this upcoming election. “We live in a global marketplace and different countries will be affected at different degrees. Everything from the frequency of humanitarian crises to the stability of trade will be impacted,” he said.
Whereas the Liberals and NDP have taken a stance on climate change, the Conservatives, despite including climate change policies in their platform, failed to pass a vote at their national convention to acknowledge that climate change even exists, Pereira added.
Shannon Lee Simmons, financial planner and founder of the New School of Finance, said many of her younger clients are asking about climate change and the future of the economy with the rise of artificial intelligence.
“It’s hard to make long term financial plans in the face of such uncertainty. While most parties are addressing climate change in some way, the future of the job market far beyond the next four years is something that many gen Z clients are asking about,” she said.
“I suspect that any party that has creative solutions to replace income in order to accommodate major potential shifts in future job markets would be of interest to Gen Z.”
This report by The Canadian Press was first published Sept. 14, 2021.
Leah Golob, The Canadian Press