Carney's housing fix needs a dividend for millennials and Gen Z

Globe and Mail

09-05-2025

The 2025 federal election revealed a powerful common thread across generations: a deep desire for protection in an era of increasing precarity
For older Canadians – who enjoy the lowest poverty levels, and highest levels of wealth and home ownership – this desire centred on the disruptive threat posed by Donald Trump's second presidency. Millennials and Gen Z face that threat atop their continuing struggle with how housing unaffordability strains every other part of their budget, including groceries, student debt and child care.
Pundits speculated that these divergent interests might signal a generational shift in voter preferences, with younger Canadians, especially men, drifting toward the Conservatives, while older voters, especially women, leaning Liberal. The final polls suggest such age differences may have been overstated, though we must await the breakdown of actual votes.
Whether or not the final results reflect these trend lines, no party seriously engaged with how millennials and Gen Z experience intergenerational economic tensions – leaving other factors to shape their votes. Prime Minister Mark Carney must confront this shortcoming if he hopes to reduce the risk of anti-incumbent sentiment re-emerging before the next election.
The promise to double home construction – which dominated parties' housing pledges – will not materialize for years, if ever. The proposed GST rebate applies to only one in five purchases, so most buyers won't benefit. And despite a 25-per-cent increase in housing starts over the past five years, affordability remained more of a hope than a reality for many millennials and Gen Zers – raising doubts about how much more building alone can help.
With young people facing heavy rents and oversized mortgages for the foreseeable future, compensation is overdue. Millennials and Gen Z deserve a greater share of the $1.5-trillion windfall generated by rising home values since boomers were young adults.
A $1,000 annual payment to every adult aged 18 to 39 would be a start. The simplest way to deliver this compensation would be through a refundable tax credit, claimed when young people file their annual returns. Governments seeking more visible credit might directly deposit $250 every three months into young people's bank accounts, clearly labelled as a housing wealth dividend.
I know $1,000 doesn't stretch far in today's housing market. It may only cover a few weeks of rent or mortgage payments. But over 21 years, that same annual payment adds up to real money that can help with costs.
Going much bigger will be difficult. The $1,000 housing wealth dividend would cost $14-billion annually. I chose this value, because it is equal to the planned increase for Old Age Security by 2028, to which all major parties agreed in their platforms. The price tag could be reduced by clawing back the dividend for young households earning over $100,000, or those that already hold substantial housing wealth.
Alternatively, the same funding could be used to accelerate subsidies for tuition, rent, and childcare – scaling up the Ottawa's planned increases by 200 to 300 per cent to help when these costs hit hardest.
Both options offer a meaningful response to the long-standing political choice to prioritize retirees' concerns about savings and home values. For decades, politicians have worked to preserve housing wealth for older Canadians, even as that choice imposed growing sacrifices on younger people now burdened by record rents, crushing mortgages, and dashed dreams of home ownership.
Until Mr. Carney publicly acknowledges this intergenerational bargain, his housing plan will suffer the same blind spot as his predecessor's — paying lip service to the challenges facing younger Canadians while glossing over the housing wealth windfalls that older owners have enjoyed at their expense.
Any serious plan to repair this bargain must be backed by meaningful fiscal choices to fund the housing wealth dividend.
Options include eliminating outdated Age and Pension Income tax shelters, which could pay for half the cost. The other half could come from beginning the Old Age Security clawback at $100,000 of household income, rather than continuing to provide the full $18,000 subsidy to retired couples with $180,000 in income.
Some financially secure retirees already call for these reforms – offering a powerful gesture of solidarity with younger generations.
We should take inspiration from their leadership to strengthen the intergenerational bonds Canada now needs to withstand growing threats to our sovereignty and national unity amid Prairie populist resentment.
They offer Mr. Carney a vital opportunity: to confront any intergenerational resentment exposed in the election before it hardens into the kind of instability he was elected to guard against.
Dr. Paul Kershaw is a policy professor at UBC and founder of Generation Squeeze, Canada's leading voice for generational fairness. You can follow Gen Squeeze on Twitter, Facebook, Instagram, and LinkedIn, and subscribe to Paul's Hard Truths podcast.