Prime Minister Justin Trudeau is seen at an announcement at the Boys and Girls Club East Scarborough, in Toronto, to launch a National School Food Program, on April 1.Chris Young/The Canadian Press
Before the last federal election, Prime Minister Justin Trudeau’s government spent billions to hand out a $500 precampaign bonus cheque to Old Age Security recipients and increased payments to those over 75.
That money is gone, but now the Liberals are finding their political problem is a completely different age group: the under-40s, who have abandoned the party in droves. Now Mr. Trudeau’s government is racing to offer them measures that will give them a little disposable income.
If only there was a way to roll out Young Age Security cheques, Mr. Trudeau’s team might be itching to do it. But there just isn’t as much room to spend as there was in 2021. There will have to be cheaper ways.
That’s what renters’ credit scores, children’s food programs or perhaps longer amortization periods for mortgages have in common. They are all ways for the Liberals to tell younger voters they are pumping some financial breathing room into the stressed lives of Gen Z and millennials.
Those are the kinds of things that will be packed into the federal budget that Finance Minister Chrystia Freeland delivers on April 16. But Mr. Trudeau and Ms. Freeland are already selling them in a cavalcade of near-daily announcements, promising “fairness for all generations.”
On Monday, it was $200-million-a-year in funding for lunch programs for kids. Last week, it was amending the non-binding Canadian Mortgage Charter to encourage banks to give renters credit for years of payments.
That will almost certainly be followed by efforts to lower mortgage payments for first-time home-buyers, possibly by easing mortgage-insurance rules or extending the maximum insured amortization period to 30 years. Those measures could actually fuel higher housing prices – but the Liberals are keen to offer younger adults immediate hope they will be able to buy a home.
It’s no secret why that’s a priority. All Canadians have lost buying power to inflation and high interest rates, but younger generations have more debt and face a steeper challenge from high home prices. Older Canadians have equity in homes, but younger adults can’t afford to buy their first.
The angst of young families is palpable. And they are giving Mr. Trudeau’s Liberals the cold shoulder.
Last week, Nanos Research’s four-week rolling poll had the Liberals garnering the support of only 14 per cent of Canadians aged 30 to 39. Liberal support is under 20 per cent in every age group under 50. That’s a political disaster.
The Liberals have lost a couple of generations – and once they’re gone, it’s not easy to win them back. Mr. Trudeau doesn’t have that much time to turn that tide.
The big issue, everyone knows, is housing. The Liberals have stepped up measures to encourage home-building since last fall and will do more.
Tyler Meredith, a former senior adviser to Mr. Trudeau and Ms. Freeland, noted that the government has used low-cost loans to encourage home-building in a way that has only a small impact on the federal deficit. He expects that to be a mechanism of choice for a government that wants to leverage tens of billions of dollars in building with a minimal effect on the books.
But the mantra Ms. Freeland used last fall to describe the government’s housing approach – “supply, supply, supply” – doesn’t offer the kind of fast-acting relief that the Liberals need to deliver now.
Ms. Freeland has long resisted calls to extend mortgage amortizations because it can lead to more demand and more risk of defaults. But her party will be tempted to offer ways to lower payments now.
The Liberals have discovered the sense of urgency belatedly, and only after support for their party among voters in their 20s and 30s collapsed.
Mr. Trudeau’s party promised measures to ease mortgage-insurance requirements in the 2021 Liberal election platform, but once re-elected, it didn’t deliver. They are just the kind of thing Ms. Freeland will be rushing to serve up to young families now.
But in 2024, Ottawa doesn’t have the billions that Ms. Freeland was throwing around in her 2021 budget. The pre-election hikes in Old Age Security she announced that year were budgeted at $12-billion over five years. Younger Canadians are being promised generational fairness now, but for their generations, it will be on a tighter budget.