It’s an appealing theory. After all, Canada’s population is aging, deaths are expected to outnumber births within a few years, and millions of bedrooms sit underused in suburban neighbourhoods across the country.

But is a housing glut actually on the way?

In this episode, Cara Stern and Mike Moffatt unpack the assumptions behind the “just wait for the boomers” argument. They explore why similar predictions have failed before, how immigration changes the equation, why Canada isn’t building enough family-sized homes, and whether changing lifestyle preferences will really reduce demand for suburban housing. They also consider the scenarios where the theory could prove right, and what it would take for that to happen.

If you enjoy the show and would like to support our work, please consider subscribing to our YouTube channel. The pod is also available on various audio-only platforms, including:

Apple Podcasts

Spotify

Podbean

Below is an AI-generated transcript of the Missing Middle podcast, lightly edited.

Cara Stern: There’s a question I’ve gotten often from people who know that I advocate for building more homes, and it goes something like this. Boomers own a massive share of Canada’s single family homes. Boomers are aging. When they die, all those homes are going to flood the market, and our housing crisis will be solved through sheer demographics. And if we’re not careful, we could end up in a situation where we’ve built too many homes.

So don’t stress. Wait it out. The glut is coming. And it’s a nice idea for people who are doing well with the status quo. But the question we have today is, is it true? Will demographic change save us? So let’s start with what that theory gets right.

Mike Moffatt: Well, I don’t think they’re right. But the folks that think that there will be a glut of suburban family sized homes, they do actually get quite a bit right. Though, since the 1990s, they’ve been overestimating how quickly these things will happen. But here’s what I think they’re right about now. They’re absolutely right that the baby boomers won’t live forever because none of us will.

And they’re right that the Baby Boomers also owned a lot of suburban homes, like millions of them, in fact, across Canada, with roughly about 12 million empty bedrooms. They’re also right that the number of Canadians dying each year is set to rise. So back in the early 1990s, the era of Nirvana and Pearl Jam and Soundgarden, about 200,000 people died in Canada each year.

And that went up over time. And just before the pandemic, we hit about 300,000 people a year. And Statistics Canada projects that by about 2036 or so, we’re going to hit 400,000. And by the late 2050s, we’ll hit about 500,000 a year and then level off at that point. And they’re also right that births aren’t increasing that much, if at all.

But their story misses a lot.

Cara Stern: It makes me think back to when we looked back at the book Boom, Bust & Echo, and we were reading their predictions on housing, and they were basing it on demographics, too. So they were looking at the Baby Boomers, what their ages are, and what’s going to happen to the housing market.

They said it was going to collapse, that homes would no longer be something you can count on for an investment. It was now going to be somewhere to live in, and you’re not going to make money off of it. And that turned out to be very wrong. A lot of the books they got very right, but the housing part of it, it was missing something, which I suspect is some of the parts that we are missing now.

Mike Moffatt: Yeah, absolutely. So let’s start looking at what doesn’t work on this theory. So the first thing that doesn’t work is that they forgot about this thing called immigration. It is ultimately not births versus deaths that matter, but it’s population growth, particularly the growth of people in their 20s and 30s who start to buy and rent homes.

The population of those folks right now in Canada is absolutely massive because of high levels of immigration and non-permanent resident growth we’ve seen over the last decade, and they need housing. And Canada’s population is still set to grow by about 300,000 people a year or more starting in 2028. So although yes, births are going to be lower than deaths, our population is still going to grow by hundreds of thousands of people each year because of immigration.

Canada is not a closed nation.

Cara Stern: That’s what it’s been in the past for a very long time and it was supercharged in the earlier parts of this decade. But the thing I think about is how much of the countries that we bring people in from, they’re also dealing with below replacement rate fertility rates. So yes, we will see lots of population growth still for a while, I think.

But I don’t know. I’m starting to think that in the long run, it might not be easy to count on that people are going to be rushing to come here.

Mike Moffatt: Yeah. But as economists like to say, in the long run, we’re all dead. So by 2100 or so that may be true, but I don’t see that really being much of an effect over the next decade or two. We have got to keep in mind that Canada could probably bring in tens of millions of people each year if it wanted to.

There’s that level of demand out there. The constraints that we have on immigration are our targets, our requirements, things like the level of education you have and so on, and just basically our desire to bring in folks. So, one example, you mentioned different countries. There are still 26 million births a year in India.

That’s not at an all-time high, but it’s pretty close to it. And they’re not going to be in their 20s and 30s until 20 or 30 years from now. There might not be the kind of supply of people wanting to immigrate here at some point, but that point is probably 2070, 2080, 2100.

It’s not going to be the kind of thing that’s going to be an issue, say, 5 to 15 years from now.

Cara Stern: I’m thinking it could happen sooner because we know that we need population growth to sustain our economy. And pretty much all developed countries are dealing with a problem of too few babies being born in their country. And so the solution for most of them is bringing people in from other parts of the world to supplement the population that isn’t being born there.

And so when we have so many problems, like a housing crisis, good luck convincing people to move here when the whole developed world is fighting for them. Like right now you have a lot of people wanting to come here. The political winds have shifted, and there’s a lot of people here who don’t want to see so much immigration right now until housing catches up, until our healthcare capacity catches up.

And that can change. I mean, in 20 years from now, who knows what the sentiment will be. I think it depends a lot on whether we build enough homes for people, but when we have to fight for immigrants to come here—and I think we will one day—I don’t know that it’s a given that they’re going to choose Canada.

Mike Moffatt: Well, I think there may be issues around competing for talent, competing for certain skills and so on. But, keep in mind we take about 1% of the people who want to move here. So yeah, I think if it becomes more competitive, we might only take 3%. We might only have a pool of 10 million people or 8 million people or 6 million people to choose from.

And I also don’t think it’s a given that other countries are going to be fighting for newcomers. The United States sure isn’t.

Cara Stern: Not right now.

Mike Moffatt: That’s for sure. I mean, if we went to President Trump and said, “Hey, we will take 12 million undocumented folks living in America and we’ll bring them up here,” we might be able to get a trade deal signed with the U.S.

I have problems with this theory on both sides of it, that I don’t think that supply of potential newcomers is going to shrink, or at least quickly. But I also don’t see that huge demand from other countries. I think the limitations are just whatever we put on them. I don’t ever foresee a scenario, at least in the next 30 to 50 years where we set an immigration target and we’re actually unable to meet it.

Cara Stern: Let’s assume that’s right and that immigration is going to continue at whatever rate we want it to be. And I expect it’s going to be fairly high still because of our whole economic structure relying on population growth. So if that’s the case, let’s go to the next thing that the theory misses in your mind.

And that’s not to suggest we don’t need condos and purpose-built rentals. We do need them. But there’s been this one-to-one trade-off. And it would be one thing if we were building fewer family size homes because of the lack of demand—if it was just like, nobody wants these things and we’re not going to build them.

But that’s not what’s going on. It’s rather that they have become prohibitively expensive to build due to land regulations, building codes, taxes, and things like that. So we’re not only seeing a big glut of population, but we’re also building fewer family-sized homes just because they’ve gotten prohibitively expensive to create.

Mike Moffatt: Yeah, absolutely. So yeah, we have in some markets, Lower Mainland B.C., southern Ontario, we have seen prices go down. But still, for a family-sized home, we’re looking at home values that are 6 to 8 times median family income; in the GTA they are closer to 12 to 15x. So it is not the case like 20 or 25 years ago when I bought my first home, when you could get it for two, maybe two and a half times income. So yes, prices have fallen. Yes, we have affordability, but we have a long way to go before the middle class can afford these homes.

There’s a lot of tropes out there that millennials are too lazy to mow the lawn and they don’t know how to drive a car, so all they want to do is live somewhere that they can take a subway or Uber, and they only want housing types where someone else does the maintenance. And I exaggerate, but only a little.

Like it’s absolutely true that there is a cohort of people who want to live in a walkable neighbourhood close to downtown. I’m one of them. But the challenge is there’s not enough of those to go around. It’s why those homes go for $2 to $4 million. And I don’t see that changing. That simply there’s not going to be that level of affordability and those many units to allow people to basically not live in the suburbs.

Cara Stern: I wonder, though, like you say that is something that planners get wrong. Which planners are you talking about? Are these city planners? Are they private urban planners? Who’s actually saying that about millennials?

Mike Moffatt: I think a lot of it is municipal planning. If you go through municipal plans, there’s a lot of underlying assumptions. And to be fair, to make a plan, you have to make assumptions. It doesn’t matter if you’re a municipal planner or an economist. You’re building a model, you’re building a plan, there’s going to be underlying assumptions.

And we’re not seeing that so far. Now, that may be true someday, but it hasn’t happened yet.

Cara Stern: It seems to be a bit of a mismatch, because I think that there is demand for that kind of living, maybe like in your 20s especially, before you’re raising a family. But the prices are so high that most people cannot afford a condo in a good, transit-oriented, walkable community at that time in their life when they actually might be most likely to consider it.

Mike Moffatt: Yeah, that is true, that we haven’t built enough of them, and I don’t see us building enough of them anytime soon. But I think a lot of this also ignores immigration, that I say that like 90% of all bad planning and housing discourse has the unstated assumption that the only people who need homes are like seventh-generation Canadians with Scottish last names, who are all urbanists.

That’s the attraction for many newcomers, and that’s the kind of property that they’re going to want.

Cara Stern: Yeah, I think a lot of people want that. I just keep wondering, like it all comes down to this constrained optimization. There’s so many factors at play here. If you’re going to be working in a city and congestion is brutal because population growth is high and there’s not good transit, people might make the choice to live in one of these more walkable areas, even if it’s smaller — like maybe it’s a unit in a multiplex.

I keep thinking, I don’t know that we have the data to know what people are going to choose, because right now you’re not really giving them the choices that we are advocating for and missing middle homes. It’s often you’re choosing between an apartment and condo or moving to the suburbs because we don’t have the option otherwise.

Mike Moffatt: Absolutely. I think the point here is that we’re not going to be building enough of those because you would have to basically flood the market with them and have them become so popular that these suburban homes become passé. So there’s a layer of assumption on top of assumption on top of assumption that would lead you to the place to say, “Nobody’s going to want these suburban homes.” And I just don’t see that as particularly likely.

We at the Missing Middle absolutely want to get more gentle density. We want to get more missing middle homes. But I’m also realistic about the level of success we’re going to have. I would love it if you and I and the team absolutely nailed it and like everybody did exactly what we said, but I’m just not that optimistic.

Our view is that families should have choice. We want to be able to create as much choice as possible. And I just don’t see us ever getting to a point where we’ve created so much choice that people are going to go, “yeah, I don’t want to buy that four-bedroom home in Mississauga.”

It just strikes me as incredibly unlikely.

Cara Stern: I think it’s unlikely, although I do think it depends on cost, because we know that suburbs are so much more expensive to run because you have a high level of services, and you don’t have the density to support it. So we end up with basically everyone else subsidizing it to make it the cheap option, and that makes it very attractive.

But if people actually have to pay the full cost of living in the suburb, it would be a very luxurious choice. And that is something that a lot of people would like. But I think right now we think of it as that’s the cheap option and maybe it really shouldn’t be. It all depends on policy of whether that will continue to be the case, because I think that you’re right that most people do want to have their own home, ideally. It’s just that we don’t live in an ideal world. So when you have other factors at play here, they might make other choices.

Mike Moffatt: My point is we don’t live in an ideal world, so they are going to choose the suburbs. Because I think that’s ultimately it. And keep in mind the infrastructure for those homes is already built. Because we’re talking about the demand for the homes that the Boomers already live in, so we’re not building a lot of greenfield infrastructure for them.

Yeah, there’s maintenance. And yeah, a lower density neighbourhood costs more to snowplow. Yeah, those things are absolutely true. But I put it this way. It’s like, you can live in Cabbagetown and have a $3 million home or you can live in, I don’t know, Brantford and have a $700,000 home.

$2.3 million pays for a lot of snow plowing. So yes, some of these neighbourhoods are more expensive to service for municipalities. But I’m skeptical of this idea that if we could somehow internalize those costs, that people will go, “Yeah, I’m going to save 500 bucks a year on my property taxes by buying a home that’s $2.3 million more expensive.”

Like, I just don’t see the math working there. But I think it’s also like a moot academic point, because I don’t see the nature of property taxes changing anytime soon.

Cara Stern: Okay, let’s go back to the argument that there’s going to be a glut of single family homes out there. We don’t need to build more, we just need to wait. So let’s look at that argument and figure out: Is there any way that they’re right?

Mike Moffatt: So when I taught a course at Ivey—I taught this course for over ten years on global investment and the strategies that firms use when making foreign direct investments. And we used a lot of tools to analyze these things. And one of the tools we used was called a pre-mortem analysis.

And the idea behind a pre-mortem analysis is that an organization—this is often done in the military—you come up with a plan and then you analyze that plan as if you did it, but the plan failed, and you work backwards and go, “Okay, what could have caused that plan to fail?” It’s a red team exercise. And if I was to red team this or do a pre-mortem analysis and go, “Okay, actually, you know what, my prediction is wrong. Why might they be wrong?”

The obvious answer is immigration, but a little bit different than what you suggest. I don’t think the immigration issue would be a supply issue. I think it would just be a demand issue. That Canada just decides, for whatever reason, to go, “Okay, we’re going to further lower immigration targets. We’re going to further reduce the number of nonpermanent residents and so on,” for whatever reason.

And we could debate the economics of it, but that could happen. We could get to a point where our population continuously starts to fall. At that point, you probably would get a glut of family size homes and suburban homes in the next 10 to 20 years. And in particular, I think it could be right in specific geographies.

So the other thing that we could see happen is, let’s say Western Canada grows more economically and say southern Ontario stagnates. Well, you might start to see, and we’ve already seen this, lots of families move from southern Ontario to Alberta or other parts of western Canada. So you could have that, the same way that we’ve seen Rust Belt cities in the U.S. hollow out and their suburban homes in places like Gary, Indiana, basically go to zero.

That could happen in specific pockets. So those are the things that I would be looking at. The glut of family home people could be right, either because immigration goes way, way down or they could be right at a specific geographic level, because economies go into decline and people move from one community to another.

So I guess those are the communities you’re thinking of. I’m thinking of Oshawa and I’m thinking of Tillsonburg and all these places that really, really, really shot up during the pandemic. And I believe they’ve all, maybe aren’t affordable, but come back down quite a lot.

Mike Moffatt: Yeah, though they’re still way higher than they used to be. So that could be part of it. But I was just thinking more about the economics of it. So, let’s suppose we have a 20 to 30 year run where oil and gas does really well, but manufacturing doesn’t. Then you’re going to see people move out of those manufacturing centres, like in Oshawa, but also like a Windsor, a London, and so on, and move out to the patch or vice versa.

We could have a 20 or 30-year period where oil and gas prices crater, there’s not a lot of demand out there, and you see folks move in the other direction. And we’ve seen this before in Canadian history. My dad’s family is from a community called Southey, Saskatchewan. And during the depression, Saskatchewan basically depopulated because of droughts. And you had this diaspora who moved out of Saskatchewan and moved to places like London, Ontario.

That could happen again. It doesn’t necessarily have to be a drought, but if you have some part of geography that doesn’t do well or some industry that goes into severe decline, you could absolutely see a level of outmigration that causes suburban homes to become quite available and cheap.

Cara Stern: I keep thinking about what you said about if we did close the taps on immigration. Like that definitely requires major structural changes to our economy, and I just don’t even know how Canada would deal with that. I guess that should be an episode, we should come back to that. But how do you restructure your economy if you can’t rely on population growth?

Cara Stern: Yeah. What I’m getting from this is we are not going to slow down on our advocacy to build more homes because, I guess worst-case scenario, if there are too many homes, I would probably choose a problem where homes are too affordable for people over one where homes are completely out of reach for the middle class.

Mike Moffatt: Absolutely. Put me on Team Abundance and Team Affordability.

Cara Stern: Thanks so much for watching and listening. Our producer is Meredith Martin and our editor is Sean Foreman.

Mike Moffatt: If you have any thoughts or questions about Southey, Saskatchewan, please send us an email to missingmiddlepodcast@gmail.com.

Cara Stern: And we’ll see you next time.

Additional Reading/Listening that Helped Inform the Episode:

No, aging baby boomers will not trigger a glut of suburban homes for young families

StatsCan population projections

The panel also debates the future of condos, rentals, non-market housing, and the political decisions shaping Toronto’s future, warning that without meaningful reform, the city risks becoming unaffordable for the very people it needs most.

If you enjoy the show and would like to support our work, please consider subscribing to our YouTube channel. The pod is also available on various audio-only platforms, including:

Apple Podcasts

Spotify

Podbean

Below is an AI-generated transcript of the Missing Middle podcast, lightly edited.

Sabrina Maddeaux: Well, good evening, everyone, and thank you so much for joining us for the first-ever live taping of the Missing Middle podcast.

We’re so excited to have you here tonight at the National Club. I’m Sabrina Maddeaux, your moderator for the evening. And if you don’t know about The Missing Middle, we talk about the economic pressure shaping life for the middle class and especially young Canadians: housing affordability, fiscal policy, what governments are getting right, and more often, what governments are getting wrong, and we never pull any punches.

Toronto is in an election year, which means the people in this room have a rare chance to shape the future of the city. And the stakes are real. If housing stays unaffordable, if the middle class keeps getting pushed out, we’re not just talking about a tough market. We’re talking about a fundamentally different future for the city and the people who call it home.

And so that’s what we’re here to talk about and figure out tonight. And we’ll be opening up to all of you at the end, so start thinking about your questions. But first I’ll introduce our panel. We have Mike Moffatt next to me, the founding director of The Missing Middle, my podcast co-host, and one of Canada’s leading housing economists.

Cara Stern is also a Missing Middle co-host and has been one of the sharpest voices on what housing policy is doing to families, young families in particular. And Ron Butler, we cannot forget him. You’ll know him very well by the end of the night. He’s a 30-year veteran of the mortgage industry and the host of the Angry Mortgage channel on YouTube. Someone who tells Canadians the very blunt truth about what this market actually looks like from the inside.

And with that, let’s dive right in.

Cara, I’m going to start with you. You’re a young parent in the city, so you have a front-row seat to something that a lot of policymakers or even older Torontonians seem to be missing. There’s this assumption that families will just move to the suburbs or go as far as they need to to find affordability, and that’s fine. They leave; everyone’s happy, no problem. But is it actually fine? And why does it matter if Toronto has kids or young families in it? What do we lose if they all leave?

Cara Stern: Well, I think we lose a lot of the vibrancy of the city if families can’t afford to live anywhere near here; it’ll be a lot of retirees, a lot of professionals, and no families there. It’d be very sad.

But I also think about who the parents are. What age range are they? They are at the prime of their career. We need people in that age range able to work in the city and at least in commuting distance from the city, if not in the city itself. And it’s a really tough thing if you lose families, which we are losing a lot of. You obviously have grandparents who don’t see their grandkids, so that’s pretty sad.

It’s really hard to reverse that trend because people leave the city, and schools close. We’re seeing that happening now. There are fewer kids entering kindergarten this year. So there are fewer classes, and schools will eventually shut down in areas where there aren’t families. You can’t really get that infrastructure back and have it reopen at any point because it becomes much more difficult.

Sabrina Maddeaux: Mike, could you put some perspective on how far gone exactly is Toronto when it comes to losing young families and especially young parents?

Mike Moffatt: Well, I have one of my colleagues at the Globe here, so I don’t want to say too much because I’ve got a piece coming out in about a week on this. But families are leaving the GTA, and not just the city of Toronto. The GTA is large, the latest numbers that we have are about 90,000 more people are leaving the GTA for other parts of Canada than are coming back.

And it’s disproportionately two groups. Some folks sell their place in Cabbagetown and move to Kawartha Lakes or what have you. That does exist, but it is largely people between the ages of 25 and 44 and kids under the age of five.

Now, this is no longer technically true, but it was a few years ago that the most common age to leave the city of Toronto was zero. It’s kids under age one, and you can understand why. They live in an apartment; they live in a condo, a small unit, and a baby comes along, and they’re like, “This isn’t going to work.” And they drive until they qualify, until they can find a place they can afford. At some level, that’s always happened. But it used to be that they would drive to Etobicoke or whatever. And now they’re driving to Tillsonburg and Woodstock and Belleville and so on.

Cara Stern: They’re flying till they qualify.

Mike Moffatt: Yes, exactly. So it is a real problem for exactly the reasons discussed. And it’s hard to come back. Once a neighbourhood loses that school, it’s even harder to attract those families.

Sabrina Maddeaux: Now, Ron, are you seeing this day-to-day on the ground in your work?

Ron Butler: Oh, we see it every single day.

Now, 40 is wildly crazy because if you drop back into the 1980s, it was 27 years old. That is an unbelievably big change. And apropos of families, the fertility rate in Canada has just broken through another level; it’s gone down to 1.2. So that means you’re so far away from the replacement rate it’s not even worth talking about.

We’ve started to do a little work on figuring out a place where there is an exception to this family formation problem. One of the strange outcomes was that Bruce Power saves the world. It’s so wild because the incomes are so high for the Bruce Nuclear Reactor program, which is growing in Ontario. And the prices of the homes have only just gotten up to an average of half a million dollars. Prior to that, if we go back to pre-COVID, they were much less, in the $200,000 range. Because the incomes are so high and the price of homes was very reasonable for a long time, there’s actually family formation within the radiation zone of the nuclear reactor.

Which might be another story for another day. But this is a fascinating thing. If you go back to the late 70s and 80s, family formation was very normal. People got married in their early 20s, had kids, and that was when you could go directly from high school to a factory job that paid you a living wage - an adequate wage.

So one of the things that we have to think about more, other than affordable housing, is that we’ve got to start thinking about how people’s incomes are nowhere near where they need to be to be able to form a family and buy a home and pursue the same thing that I’m guessing most of the people in the room have been able to achieve.

Sabrina Maddeaux: Now I want to jump off of that because, Mike, one of the problems and complaints is that there aren’t suitable homes for families these days. Everything is either too large and unaffordable or too small to have the quality of life most people are expecting or wanting when they have kids. So why is everything either a McMansion or a shoebox right now?

Mike Moffatt: It’s just the economics of how we do taxes and land in this province. We haven’t really allowed other forms of home - missing middle - because of zoning and building code issues. We haven’t allowed for the use of new development land because of urban growth boundaries and Greenbelt-type issues.

So if you’re not allowing a lot of land, that land is going to be very expensive, and nobody’s going to build an $80,000 structure on a million-dollar piece of land. Even if you did that, that home would still cost about $1.1 million. So that only leaves you with high-rise, and high-rise has many uses, but the expense and challenge of building high-rise and building code issues make it very hard to economically build larger units. So it’s this combination of land use policy, taxes and so on - particularly in the GTA and southern Ontario - that has created this dichotomy where you’ve got very small homes and very large homes and not a lot in between.

Sabrina Maddeaux: So, Ron, being on the ground every day, where do you see the future going? You have that ground-level view that the rest of us don’t always have. Five years from now, in the GTA, condos, purpose-built rentals, single-family what’s your honest read on what happens with each?

Ron Butler: Prediction is a crappy business. It’s really bad. But here’s something I feel a lot of conviction about. The dog crate condos will be doomed for a long time.

I’ll give you a great quote. A group from Montreal come to Toronto to buy wholesale numbers of condos. It’s called the Gesta Group. They’ve got half a billion dollars to buy unused, unsold dog crate condos in Toronto.

A great quote from the person managing this effort said, “The only thing we won’t buy is condos that are laid out like a bowling alley with a glass wall for the bedroom.” And the great quote he said was, “These things are unlivable.” Think about that for a minute. They’re unlivable. They are so bad they’re unlivable, both for the owner occupant and for the renter. He’s talking about something so awful, finishes so bad, a concept so horrendous that even renters won’t live in them.

So that’s the only thing I can say for sure, Sabrina, is that I think the situation with tiny condos will be just as bad 3-5 years from now as it is today.

Sabrina Maddeaux: Cara, I want to dive into the policy side of this because what we hear from policymakers is always one thing: they love families, they love affordable housing. But then it’s the dog-crates that get approved and the three-bedroom family homes that get the “no.” What would you like to see from Toronto candidates and policymakers to make it genuinely easier for young people, families, and children to stay in Toronto?

Cara Stern: I think we’ve started seeing some changes. We’ve seen some zoning changes happen, which is really important. All the city can do four-plexes. We have six-plexes in old Toronto, some in East York, and one place in Scarborough. That’s great, except that’s only on paper. But can you actually build them? Can you actually do it in a way where it financially makes sense, so that you can actually fit that on the lot when there are all these other building code rules?

We need to see some changes that make it actually feasible to build these homes, not just the bare minimum of making them legal.

Sabrina Maddeaux: Now, Mike, you’ve written a lot about what you call Potemkin reforms—changes that look meaningful on paper but don’t move the needle in real life. In a Toronto election year, what’s the one thing you wish every candidate understood about why our housing crisis keeps not getting solved?

Mike Moffatt: I think we need as-of-right to actually be as-of-right. Have a list of criteria, and once you do that, then you’re gold. We see this in places like Edmonton where for subdivision permits and several other permits, it’s actually assessed by AI, and something that, if you’re lucky, takes six weeks in the City of Toronto takes six minutes in Edmonton.

There are solutions out there. I think it’s looking at that and looking at one that I’ll have to work with the province a little bit. One of the objections to multiplexes is that in Ontario they’re almost all going to be rentals because to parse them out and sell them as individual units, you get into condo regulations and the economies of scale don’t work. It’s the same amount of paperwork to do a 300-unit condo as an eight-unit condo.

But this is a solvable problem. In British Columbia and other jurisdictions, - in the United States - has several policies to make it easier to subdivide units. There are different methods depending on the type of home, but there’s really not that much difference from doing a semi-detached duplex. So I think it’s looking at that, but it really does come down to as-of-right should mean as-of-right.

Cara Stern: Those delays are huge. Think about how much it adds to the cost of the home for every month that it’s delayed. A lot of these projects take a long time to get approved, even for fairly simple things. So we really need to see some of that red tape go away.

Sabrina Maddeaux: Ron, Mike mentioned land costs. Do you think governments are willing to make those tough decisions necessary to either make it easier to build infill or to make more development land available? Or did the Greenbelt scandal make this a third rail that no one’s going to touch again?

Ron Butler: Well, we live in a province where the premier could do the most preposterous, outrageous, and semi-corrupt things, and all he has to do is apologize two days later and take it back. That is a different kind of political environment than I’ve been used to in my life.

But a couple of points here: The land prices are astronomical until we completely set aside this whole Greenbelt insanity. It’s really a brown belt or a bush belt or a rock belt - the idea that it’s all farming land is preposterous. Every single organization goes to the barricades every time you talk about the Greenbelt.

When you go back in the lineage of the organizations, it’s just a bunch of NIMBYs who live there and don’t want anything to change in all of those Greenbelt areas, and it’s ridiculous. There’s no sense to it. There’s no reason for it other than an idea that a couple of people in the Harris government dreamt up all those decades ago, and it’s no longer appropriate.

And by the way, if you ever hear anybody refer to the Greenbelt as a critical watershed, you need to point at Lake Ontario. There is never going to be any shortage of fresh water in this region. There’s been so much mythology built around the Greenbelt that’s completely false; it’s so hard to tear it down.

Cara made a great point about the insanity of building multiplexes in the city of Toronto. A friend of mine tried to do it just a few streets off the Danforth. He started three projects, and in the end he said we just gave up.

There was a requirement to increase the water coming into the building, so we had to put in a pipe for the water coming into the six-plex, and that required us to have the provincial arborist come and see how close the pipeline was going to be to a tree. And that took seven weeks. We couldn’t do anything for seven weeks. I’m not even going to talk about the guy who ran three different shade complaints. You can do that. You can just keep going with the shade complaints forever. Or the person on the other side of the project who wanted a significant bribe to allow materials to come in too close to his property.

I’m not making any of this stuff up. This is the way it works. Under those circumstances, how are you going to build this stuff?

Sabrina Maddeaux: Mike, you’re a guy involved in climate initiatives. You care about the climate. Is Ron right or is he just an evil, pro-development…

Mike Moffatt: Well, those things don’t have to be mutually exclusive.

But no, I do think we need to look at these. In particular, the Greenbelt is one issue. But on the urban growth boundary thing, it’s increasingly clear that they actually cause more sprawl than they prevent because what happens is you get the leapfrogging effect.

You see this a lot in my hometown of London, Ontario, where you get a council that puts in a really tight urban growth boundary, and then people just move out to Lucan or Komoka. They move out 10 to 15 minutes north or west of the city, and then they drive back to their jobs at the university or the hospital. So you haven’t stopped sprawl; you’ve just moved it 15 minutes north and west.

And, by the way, when you do that, all of those families pay all their property taxes to Komoka and Lucan. They don’t pay them to London. So now you’ve got all these people who are commuting using London’s infrastructure, but they’re not paying a dime of local municipal taxes. So, I do think we need to look at these things.

Cara Stern: I think people need to realize that good housing policy is good climate policy. They can be done together, and that would really make a huge difference.

Sabrina Maddeaux: Cara, I’m curious because we’ve talked a lot about ownership, but a lot of people are coming to terms with the idea that they might never own. They might be forever renters. Is renting for life a realistic and dignified path in Toronto, or does that only work if we fundamentally change how this city treats rentals and renters?

Cara Stern: I think it’s definitely a dignified path. Some people do want to rent, and if they want to, I think that is a totally great choice. I don’t think that we need to be a place where people have to own, but we do have a lot of financial incentives to own a home. You don’t pay capital gains tax on that increase, and there’s no equivalent for renters at all. When you look at the rental market, there are very few family-sized rental units out there; it’s almost impossible to find one in Toronto.

And so we are ending up with smaller families. I think that will continue to be the case because you can’t make it work in these tiny condos.

I don’t want people to have to rent because that’s their only option. I’m not one of these people who think, “Oh, you know what, if corporations buy homes.” Those are often decent people to rent from because they know the rental laws, unlike a lot of landlords out there, but at the same time, it can’t be that people are forced into this. It has to be that the choice is theirs.

Sabrina Maddeaux: So if a young person is in a position where they could put down a down payment and afford a home in Toronto, right now, Ron, can you give us the honest answer? Would you recommend it?

Ron Butler: Would I recommend buying a house in Toronto?

Sabrina Maddeaux: Right now. If you’re a young person and you have a down payment, you can technically afford the mortgage payments. Is it a good idea?

Ron Butler: If you can wait six months, you’ll have lower prices in almost every region. The thing that we misunderstand about housing is that it’s not like the stock market. There’s no such thing as a whole market that moves with momentum. There are some dog companies that get pulled up by the success of other companies in the stock market. That’s not true in real estate.

If you have a sought-after neighbourhood, a great street, and a great home, you will get a great price out of it. And we hear the story, “Oh, the market’s turned and everything’s getting a lot better; you better jump in and buy right now, or you’re doomed.” I can show you a lot of homes in Scarborough that have been sitting there for seven months. Not every single place is that unique, sought-after property. Those sell; others don’t. And if it’s the wrong price, it doesn’t sell at all.

So will the price come down a bit more in the city of Toronto? I think yes, if we talk about the whole city and not just those ultra-specific neighbourhoods close to the core. I think yes, prices will come down. And here’s one thing for sure: if you wait six months and save $50,000, you’d like to have that $50,000, right?

Sabrina Maddeaux: I’d take it.

So, Mike, Mayor Olivia Chow has made non-market housing a signature of her time as mayor, and anyone running against her in this election is going to have to take a position on that. Is she right to say that non-market has to be a bigger part of the answer, or is that approach getting in the way of solving the affordability crisis?

Mike Moffatt: No, I definitely think we need more non-market housing. We can debate where the money comes from, which order of government, and so on. I think where it becomes problematic is when it’s tied to a market building or proposal where you go, “Okay, if you want to build this missing middle or mid-rise apartment building, x percent has to be deeply affordable.” Then the math breaks.

Cara Stern: Is that when they’re paying for it through development charges, through inclusionary zoning? Those are the things where we’re able to put the cost onto other buyers.

Mike Moffatt: Don’t put it on development charges.

Ron Butler: You know, I think there’s a huge need for social housing. Homelessness is the greatest curse of our society as we sit in these large cities today. But it’s important that the mayor and all the council realize that their long-term social housing is making them famous as slumlords. They have neglected to maintain these properties for years.

So there’s a lesson there that if you’re going to build these things and take federal incentives to build social housing, you better have a realistic commitment to how you’re going to look after it for multiple decades and not end up being even more famous as the biggest slumlord in Toronto, as is the City of Toronto.

Sabrina Maddeaux: I’m going to do a couple of rapid-fire rounds before we go to audience questions. Let’s start with Ron. If you could tell the next mayor of Toronto, whoever that might be, one thing about housing, what would it be?

Ron Butler: First, wear fewer costumes. After that, understand that development fees only do harm. They give the government a completely wrong idea of where and how money should be spent. Because ultimately, if there was no taxation on the new construction of housing, a lot of people say, “Oh, no, if you do that, the developers will just run wild and take all the money and profits and be terrible.” But there’s a reason why the prices got so high on these condos- why they went from $375 a foot to $500 to $700 to $1,400 a foot. It’s a combination of land costs, which are speculation unto themselves, and huge taxes and development charges.

So say to yourself, “Why is there tax on new construction?” Then, if you decide there shouldn’t be, there will be a lot more useful new construction.

Sabrina Maddeaux: Cara, same to you. What do you tell the next mayor?

Cara Stern: I would tell the next mayor to really focus on housing. I was really disappointed when the six-plex debate came up that Olivia Chow did not use her strong mayor powers and didn’t advocate for six-plexes all over the city. She recused herself from the discussion, and I thought that was such an abdication of responsibility.

As the Mayor, you have a responsibility to make sure that these things get passed. Those strong mayor powers were put in place so that people could actually get housing passed when the council isn’t agreeing to it. I see the way they cut it back to only being part of the city as such a failure. I would like the next mayor to actually use the powers available to them to make housing available in the city.

Sabrina Maddeaux: Mike?

Mike Moffatt: I’ll tie it back to an earlier question. Lose the market versus non-market mindset. There are no non-market electricians, no non-market sewers, no non-market building code, no non-market zoning. If you fix the issues with housing, you’re going to help both the market and non-market sides at the same time.

And I think we get into this market versus non-market, deeply affordable versus market, whereas 90% of the policy solutions help both at the same time. So focus on that 90% and don’t create artificial conflict that you don’t need to create.

Sabrina Maddeaux: Last rapid-fire round. I know Ron hates predictions, but too bad, it’s my show.

I want all of you to tell me one prediction that you think will happen. It can be a policy or something in the political landscape to do with housing the middle class in the Toronto area over the next five years. What do you think we’ll see? Cara, let’s start with you.

Cara Stern: I think we’re going to see a problem as housing is not being built right now. We’re seeing condos not getting built.

I think in a couple of years we’re going to see housing prices go up because the things that would come on the market aren’t going to come on the market. I’m very concerned about that. I don’t see any other way around it when building was frozen for a little while.

With the elections coming up, I hope people are going to talk about housing, but I’m pretty concerned. My prediction is that we’re going to spend more time talking about the jets on the island than we will about housing in the city.

Why are we spending so much time on this compared to affordable housing and housing for middle-class families? That is a huge crisis in the city.

Sabrina Maddeaux: Mike?

Mike Moffatt: I think we’re going to have more young people and young kids leave Toronto. Furthermore, I think we’re going to have more people leaving Ontario and more people leaving Canada.

We’re already seeing record numbers of young Canadians move to the US. I think if their political situation ever stabilizes, we’re going to see a far larger out-migration. I hope I’m wrong about that. I hope our policymakers at all three orders of government can do something about it. But I’m really worried about the exodus of youth and talent, particularly from the GTA.

Sabrina Maddeaux: I’m going to add in my own quick prediction before we get to Ron.

Cara Stern: That’s the thing with the second-time buyers’ problem. I hadn’t heard that the first-time home buyer is now 40 years old. And I didn’t think about how everyone always said to me growing up, “You want to buy your starter home, and you work your way up.” At that point, you’re probably in need of the biggest home you’ll ever need in your life. That’s when you’re probably having kids. So it becomes even worse when you need to be able to buy something that should be considered something you work up to.

Ron Butler: Yeah, that’s a serious number. It’s national, which is even worse.

Cara Stern: It’s got to be worse in Toronto.

Ron Butler: Oh, I’m sure it is.

The nice part about being really old and really fat is that I can make a five-year prediction and I’m probably not going to be around to be proven wrong. My cardiologist would agree with that.

Here’s a political prediction because I have a lot of fun with it. I think that we will have a new Prime Minister at the end of five years and a new Premier. I think the Premier will just wear out his welcome. But I think the Prime Minister might just think five years is enough and go on and become the General Secretary of the United Nations.

Sabrina Maddeaux: And that’s why we close with Ron.

Editor’s note: The panel discussion was followed by a lively Q&A, during which participants explored topics including a Land Value Tax and the tension between housing as an investment vehicle and housing as a place to live. To watch the full exchange, check out the video on YouTube.

Additional Reading/Listening that Helped Inform the Episode:

‘It’s not like we’re sitting on our hands.’ Toronto’s biggest landlord sees 7 more complexes fall into critical disrepair

Drug deals in doorways and a stranger in the living room: Why Toronto Community Housing residents say its $38M security force is failing them

Funded by the Neptis Foundation

Brought to you by the Missing Middle Initiative

• There is a persistent belief that the combination of low birth rates and rising death rates will “solve” the housing crisis without the need to build more homes.

• While it is true that deaths are on track to exceed births by the end of the decade, that’s only part of Canada’s population story.

• Immigration and non-permanent residents will remain the primary drivers of population growth under current federal policies.

• Statistics Canada projects Canada will add roughly 3 million people per decade for the foreseeable future, similar to the 1980s, when Canada built a substantial number of homes.

• Unless immigration levels are slashed well beyond current levels, natural population decline alone will not eliminate the need for homebuilding.

When a theory gets it half right

One thing we hear a lot at the Missing Middle is that Canada won’t need to build all that many homes, as birth rates are low and deaths are slated to increase due to an aging population. As such, the argument goes, our population won’t grow all that much, and homes will “turn over” from generation to generation.

Part of that argument is true. Statistics Canada provides population projections through 2025 (Table 17-10-0058-01). Their M1 projection, based on current trends and government policies, shows deaths overtaking births by the end of the decade, resulting in net population decline from non-migration sources.

Figure 1: Births and Deaths by Year, Number of Persons, Canada.

Data Sources: Statistics Canada Tables 17-10-0008-01 and 17-10-0058-01. Chart Source: MMI.

However, the “we don’t need more homes” argument neglects to consider the role that immigration and non-permanent residency play in population growth and demographic-based housing demand. While Canada’s current immigration plan only extends until the end of 2028, the federal government has made the following three long-term immigration commitments:

• reduce our temporary population to less than 5% of the total population by the end of 2027

• stabilize permanent resident admissions at less than 1% of the total population after 2027

• increase the Francophone immigration target to 12% of permanent resident admissions by 2029

The third commitment is not particularly relevant to our discussion here, but the first two inform Statistics Canada’s population projections. Figure 2 shows the number of new immigrants (permanent residents) and non-permanent residents by year, projected from 1971 to 2075. The post-2015 run-up in immigration and non-permanent residents is clearly visible, along with the 2025-27 reduction in non-permanent residents.

Figure 2: Net Newcomers (Immigrants and Net Non-Permanent Residents) by Year, Number of Persons, Canada.

Data Sources: Statistics Canada Tables 17-10-0008-01 and 17-10-0058-01. Chart Source: MMI.

The fluctuations in the 2015-28 period overwhelm Figure 2. We can correct for that by displaying the number of newcomers by decade. In Figure 3, we see that under current Canadian government policies, the number of newcomers to Canada will be just over 4 million in the 2030s, eventually surpassing the 4.8 million in the 2020s and reaching 5 million by the 2060s. In contrast, Canada added only 2 million newcomers in the 1990s.

Figure 3: Net Newcomers (Immigrants and Net Non-Permanent Residents) by Year, Number of Persons, Canada.

Data Sources: Statistics Canada Tables 17-10-0008-01 and 17-10-0058-01. Chart Source: MMI.

Adding all of the components of population growth and decline together from births to deaths to immigration to emigration, Statistics Canada projects that Canada’s population will grow by just over 3 million persons per decade moving forward, roughly the same level as in the 1980s, a period where Canada built a lot of homes, particularly family-sized homes. Figure 4 shows that while Canada’s population growth rate will be much lower than it was in the 1980s and 1990s, our growth in terms of the number of people is projected to be equivalent.

Figure 4: Population Growth (Number of Persons) and Population Growth Rate by Decade, Canada.

Data Sources: Statistics Canada Tables 17-10-0008-01 and 17-10-0058-01. Chart Source: MMI.

There are all kinds of assumptions baked into these projections, with future immigration policy being at the top of the list. If Canada alters immigration targets, makes drastic increases (or decreases) to the number of non-permanent residents, or finds itself in a position where it cannot achieve the targets it has set for itself, growth rates and growth levels will be substantially different than what is shown in Figure 4.

Barring large reductions in immigration, however, deaths surpassing births does not create a Canada where homebuilding is no longer necessary.

Cara Stern talks with The Hub's Managing Editor and Scout leader Harrison Lowman about why modern life feels increasingly isolating, and how everything from scouting to neighbourhood pubs can help people rebuild trust, friendship, and a sense of belonging.

If you enjoy the show and would like to support our work, please consider subscribing to our YouTube channel. The pod is also available on various audio-only platforms, including:

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Below is an AI-generated transcript of the Missing Middle podcast, lightly edited.

Cara Stern: We talk a lot on this program about the physical parts of a community —the housing, the zoning, the transit, the density. But you can build the most perfectly designed neighbourhood in the world and still end up with a bunch of strangers living next to each other. So the physical design matters, but something else has to be there too. And we have a guest today who’s been thinking hard about what that something else is and how we build it. Harrison Lowman is the managing editor of The Hub. He’s an enthusiastic scout leader and someone I was very lucky to work with for almost a decade at TVO. So I’m thrilled to have you here today.

Harrison Lowman: Thank you for having me on. I guess I’m a community expert, or a community organizer. Wasn’t Obama that?

Cara Stern: Yeah, you’re basically Obama.

Harrison Lowman: Okay. Thank you.

Cara Stern: Ever since I’ve known you, you’ve talked about Scouts, and how important Scouts is, and how everyone should be doing Scouts and putting their kids in Scouts. So let’s start there. Why?

Harrison Lowman: I don’t want to make this like an advertisement, but I think often when we’re focusing on extracurriculars for our kids, we’re interested in their individual development, their skills, and I’m interested in extracurriculars that are feeding the community.

A lot of this conversation can be very corny, Cara, because I tell them things like, if the neighbourhood’s a machine, then you guys are all little cogs in that machine, and we all get to be well oiled and we all go to be turning around with our teeth fitting into one another for this whole thing to work. So that’s why I say people should sort of join scouting is because they’re sort of giving back. I can get into examples of that later.

Cara Stern: I love that idea of community as a machine because it gives you this visual where we’re all taking part in it. It’s not a machine that works on its own. You need people to operate the machines or be the cogs, as you said, be a part of it.

Harrison Lowman: We keep talking about Canada being broken. And I feel like these metaphors work in terms of like, okay, how do we fix it? And I feel like this is part of the fixing.

Cara Stern: You and I both love Canada, but are both very frustrated with Canada because there’s a lot of things we both see as moving in the wrong direction. I obviously focus a lot on the housing side of it because I subscribe to the housing theory of everything. Fix that and everything comes together. And you’re focused a little bit more on, I guess it would be the international role of Canada and Canada’s identity in some ways.

Harrison Lowman: Yeah, the international. But again, I think you and I would agree it starts at the local level. It’s all bottom up. I think we’ve learned that top down doesn’t really work and people have to be invested. And where are they most invested?

We see this in municipal politics. The politicians that are getting the calls are the ones that are having folks angry about their garbage not being picked up or some sort of zoning bylaw being broken and something being built in the backyard. It starts local. That’s where people start to notice things and where they start to get frustrated and hopefully where they start to fix things.

Cara Stern: I think a lot of people talk about community as something that they think you find if you’re lucky. You move somewhere and you’re like, how is the community there? Is it good? I don’t know that people realize how much being part of a community is an active thing. And I was wondering why you think people don’t quite get that—the role that they have to play in the community?

This is going to sound kind of corny, but when I feel overwhelmed at work or with my new baby and I feel like the world is imploding, helping out—with scouting, like making sandwiches for the homeless or delivering food to needy families or delivering garden care stuff to our neighbours so they could see our faces—that makes me feel better as a person. So I think it’s something we should be looking at.

Cara Stern: There are also studies to back that up. I was looking at some and there is some evidence that if you are volunteering, you will feel more connected, and therefore feeling more connected makes you feel less lonely and happier.

Harrison Lowman: Right. Over the last few years, Cara, there’s been, I think in the last five years or so, a 20% drop in volunteering in Canada. Obviously Covid played a big part in that. My message during Covid, obviously while still being safe, was: this is the time when people need to step up the most and help each other, and people really showing when it came to helping one another.

Cara Stern: Yeah, I guess that makes sense. During the pandemic, people were so isolated. It was like, “Stay home on your own, don’t see other people, don’t go outside of your bubble.” And then that made for an extremely isolating experience. So I guess if you have the community side of it, what did you do during it?

Harrison Lowman: Well, you mentioned bubbles, and it’s one of my catchphrases now. My fear is that we don’t just have bubbles during Covid, it’s that we now have them during regular life. You wake up in the morning, get in your bubble car, you go to work or in your bubble cubicle, then you get back in your car. People are now having lunch in their cars, I see on Instagram. It’s very weird.

Cara Stern: That’s very weird to us because when we were in our office, when we worked together, there were five of us who were like, “Let’s take turns making lunch for each other” because we thought, this brings people together, eating lunch together. So my mind is blown by the idea that someone would just want to eat in their car. Although I suppose there are more introverted people out there than us, so that’s fair.

Harrison Lowman: Those introverts!

I want a world free of bubbles, I want cross-pollination. I was very shy as a kid, Cara, as much as you think I was an extrovert. I was afraid to talk to strangers. You force yourself to talk to strangers when you’re a journalist; it’s just part of the job. But it is amazing now that I’m in a neighbourhood—and it’s the neighbourhood that I grew up in—that I just know the people around me will lend a helping hand if I need it.

A few months ago, I was here working from home and I had to finish a big piece, and I didn’t have a charger for my laptop. I mentioned on Facebook this happened, and then a random stranger in our neighbourhood, who then became a neighbour, let me borrow hers. I was welcomed into her home, she told me about her kids, I got to meet her dog. This is the zest of life, Cara.

Cara Stern: I think about how we designed so much of our cities in a way that it makes it kind of easy to avoid accidental encounters with neighbours. We don’t have a lot of neighbourhood pubs, for example. It’s not a thing anymore unless you’re in old parts of the city. You just can’t build them, you’re not allowed to build them. And if you look at our suburban neighbourhoods, there’s pretty much nowhere to walk to. So people are getting in their cars and going places; that’s just the way they’re designed.

How do you counteract that? Because that’s great if you can go out and be like, “hey, can I borrow a charger?” I would totally do that, just maybe knock on a neighbour’s door and ask for that. But a lot of people don’t want to do that. It takes a lot of effort to do that and a lot of pushing yourself if you’re a shy person.

Harrison Lowman: Yeah. For some, I would just say you got to do it, and then it’ll be uncomfortable at first but it’ll pay off in spades after the fact. We talk about third spaces. And I have one near here, thankfully due to the efforts of — I think she’s 85 0— Madeleine McDowell, an icon in this community, an amateur historian who basically saved a place called the Lambton House down by the Humber River. It’s an old coaching house hotel from the 1800s, and it’s got this storied history.

It’s not just a historical site. These places increasingly, as you said, there’s a need for a lot of activities. I can hear young kids taking instrument lessons from these places, people taking tours, there’s pub nights, there’s meet and greets for seniors in the community who feel isolated, and they just become neighborhood drinking holes, which I think we need more of. The church that we do scouting out of, that we’ve almost done for 100 years, they’ve lent the space to us for free. And we pay back in spades; the scouts do by, a few weeks ago, helping to organize their rummage sale, putting stuff away and taking it out. That place is used. It does AA meetings, it does Scottish country dancing, they record musical albums there. So yes, it also is used as a place of worship, but increasingly it’s more so used for other stuff. And I am happy that my son, if he ends up joining Scouts—which he’ll be, being biased, I will obviously force him into it.

Cara Stern: Yeah, I was like, “You’re giving him a choice?”

Harrison Lowman: Yeah, but he will be in this historic church and also have meetings and have fun and learn valuable lessons in the same space that I did when I was five years old.

Cara Stern: Man, if only people didn’t have to move out of their communities they grew up in. That’s a very lucky, privileged thing to be able to do.

Harrison Lowman: And that’s the other thing. I think those of us that do have these things should realize how fortunate we are, pay it forward, and also feed that community because we have to realize that we’re unique here and that not everyone has this. Some people are stuck. There are people that choose to live in the suburbs like you’re talking about, but then there are also people who are forced to. And I’m sure that obviously there’s community in the suburbs as well; people find community in various places.

Cara Stern: And in condos, you have to make an effort.

Harrison Lowman: Yeah. We introduce architectural barriers that make it more difficult. You don’t end up meeting that person because you don’t have a park or a parkette by your condo, and so you are just like passing ships in the night.

I used to live in a small loft in West Toronto. Did I know my neighbours’ first names? No, you just hear them through the walls. It’s kind of depressing in a way. I had no parts of their lives, I’d never be able to really understand who the heck they were, and they didn’t really care who I was.

Cara Stern: I knew a lot of my neighbours when I lived in high rises, but that was a choice where if I saw them, I would talk to them, and then I’d write down on my phone, like, remember who that person is so next time I see them, I’d remember their name. Because otherwise I’ll look at them and be like, “I know you, who are you?”

But it definitely takes a lot of effort. You have to counteract the built form that’s there in order to get there. Do you think that we have to live in a high trust society to have this kind of community you’re talking about?

Harrison Lowman: Well, it’s harder. It’s harder in urban areas, right? Like you hear all the time in rural areas, and increasingly, whether it’s people in mental crisis, using drugs, etc., it gets more difficult. People are obviously hesitant about trying to form some of these connections when they have their guard up.

I don’t think it will get to this level, but I described to you a situation where in my wife’s family’s community in Lakefield, Ontario, near Peterborough, we came out of a church service and everyone has their car doors unlocked, which I think is just nuts. But there was a pie on her father’s dash of his car; someone had just left that there as a thank you. And I was like, wow, this is like peak community—unasked-for pie that you’re greeted by when you come out of the church. Come on, man.

I do think you need that trust. It’s not just going to come, it can’t be manufactured or inorganic. It’s just about how do we build that trust? I don’t have all the answers.

Cara Stern: Yeah, I don’t know if we’ll ever get to pie levels of trust in cities, especially given the number of car thefts here — I don’t think anyone’s leaving their car unlocked. But you do have other forms of community in the cities at a different level.

Harrison Lowman: I don’t know, I really think, Cara, you just have to dive in. And it’s like dating; I tell people you have to put yourself in as many situations as possible where you’re rubbing up shoulders next to like-minded people as possible, where your Venn diagram overlaps with like-minded folks. So often that means being out of your comfort zone. If someone’s lonely, whether they’re on mat leave or moving into a new neighbourhood, they need to pick up the community newspaper, look at bulletins on poles around their house, or go online and try to see ways of interacting with others.

A friend of mine—which I think is amazing, I hear about expats—in this case, my friend is in Berlin. How did he get to know people there and how did he tick some of the boxes we’ve just been discussing? He moved to Berlin and he joined a litter-picking community of people, mostly from the UK, who go around Berlin and spend their Sundays picking up litter and beautifying the city that they’re so grateful to be able to live in. I think that’s amazing.

And in the process, they found friends and they have their own little community in some ways. And they call it the litter-picking community in Berlin. And does it get dicey sometimes? Are they picking up needles sometimes? Are they in rough areas? Yeah, but they’re in a group and they trust one another and they’re giving back and I think that’s great. That’s what I would encourage my friends to do.

Cara Stern: I guess they’re too old to join Scouts there.

Harrison Lowman: You could be a leader.

Cara Stern: If you’ve never taken part in Scouts, can you be a leader?

Harrison Lowman: Yeah, of course, it’s open to everyone. And again, it’s boys and girls.

Again, it sounds corny, but one of the mantras is to do a good turn for someone every day. It’s not that I always do that, but it’s in the back of my head, like I’m thinking that as a 34-year-old going about my day, I’m like, “did I do something for someone else?” And the kids will say, “Well, just doing the dishes or chores,” like no, no, no, that does not count. It’s a responsibility.

You need to go out of your way sometimes, out of your comfort zone, to help someone else. And again, it’ll feel really good. And if you foster that at a young age, those kids grow up in our community and they’re all giving back to one another. And then that cross-pollination starts to happen.

Cara Stern: It is also one of the most affordable things you can put your kids in. Is it super subsidized?

Harrison Lowman: We’re all volunteers, so we give our time. I often found, Cara, when I was doing it, I was like, do I really have time for this? I’m so stressed with work. And then I realized that when people are like, “Oh, I don’t have time for this,” you make time for the things you care about. If you’ve noticed something has dropped by the wayside, it’s because you don’t care about it.

If you really care about something, you will make time and you’ll come to the realization, like I did, that I can work on something longer and feed the employment side of things, or I can do this and—I’m not really religious—but you’re feeding your soul. You’re giving back. You see the smiles of all these young kids, you realize you’re having an impact on their lives, you’re trying to be a good role model and it feeds your soul in a different way. It distracts you from the bullcrap you’re dealing with elsewhere, and it’s just nice to have another track on your life for you to travel on.

Cara Stern: I think it would definitely pay off when you have kids. One of many things that drives me crazy when I talk to people who have kids is they are often shocked by how little community they have. You hear about how it takes a village to raise a child and a lot of people have a kid, and then they’re like, “where’s my village? I was promised a village.” And I think that people don’t understand that you have to be a villager to have a village. It’s something that I constantly remind people who say that. I see it a lot, like a lot of people online will talk about this. I find it in certain areas in my life also where I talk to other parents and they are saying how hard it is—and it is hard—but also how they have no support, and they thought they would have support.

Having a kid, you must be finding that you’re playing it a little bit on easier mode now that you have that sort of community and you’re lucky enough to live near where your parents are and where you grew up, right?

Harrison Lowman: My next-door neighbour said to me when he found out we were pregnant, he’s like, “Any time you need to, no questions asked, walk into my house and hand me a crying baby. I will say nothing to you and I will just look after him.” I haven’t played that card yet, but just the fact that he even said that, it’s lovely.

Cara Stern: You know the neighbour, right?

Harrison Lowman: Yeah, I know him pretty well. There are so many kids here, so to be able to have families on either side that are willing to help. It’s like you said, you build up your supply so that you have it when you have to use it. But again, I don’t care if they pay it back. It doesn’t have to be returned to me.

I was picturing like a glossy brochure, for housing construction, like “Come to Roncesvalles, trendy, hip communities just around the corner.” And again, it becomes this weird selling point when really it’s organic. It has to be fed. It’s not just this talking point for some developer to put on their brochure.

Cara Stern: Well, I think you can build something that encourages community, as you said, if you have the parkettes, if you have local retail or little cafes and things that you can walk to. I think you can build things that encourage it.

Harrison Lowman: Yeah.

Cara Stern: Yeah, it is organic in some ways, but it does take so much effort. And that’s something that I hope that if there’s anyone listening to this who’s feeling isolated takes that away from this—that it is out there, you just have to really make an effort and maybe volunteer, maybe join some sort of circles nearby that’ll get you there and be there for other people too.

Harrison Lowman: And for all the introverts out there you mentioned earlier, there are different roles, right? There are people who don’t want to be public-facing, and they can be the treasurer of some sort of community group. They don’t need to be the head leader, head honcho. We have various people that are more happy to sort of be in the background or deal with the numbers. And then there’s also extroverts like myself who want to be front row centre.

Every year we have a banquet, every year we’re kind of desperately encouraging parents to volunteer because with a lot of stuff, I often don’t know if a lot of people realize how many roles are volunteer roles, people doing it out of the kindness of their hearts, not with kids in the program sometimes. Their kids cycle through and get older and they’re still involved. It’s like a teacher, right? It’s amazing. If you’re a volunteer with young people, you’re leaving an impression on multiple generations of Torontonians. And I think that’s a lovely thing to think about.

Cara Stern: I’m picturing all these little minds shaped by Harrison Lowman out there, just mini Harrison Lowmans. That’s a little bit of a scary thought.

Harrison, thanks so much for being here. I love talking to you about this. I hope a lot of people can learn from your experience in community because you’ve figured it out.

Harrison Lowman: Far from figuring it out, but thank you so much for having me.

Cara Stern: Thanks to everyone for watching and listening. Our producer is Meredith Martin and our editor is Sean Foreman. And if you have any questions about being in Scouts, you can email us at missingmiddlepodcast@gmail.com, and I will forward it along to Harrison.

Harrison Lowman: Oh my God. Okay, I’m waiting for a deluge.

Cara Stern: And we’ll see you next time.

Additional Reading/Listening that Helped Inform the Episode:

Volunteer wellbeing: what works and who benefits?

Exploring the Effects of Volunteering on the Social, Mental, and Physical Health and Well-being of Volunteers: An Umbrella Review

They explore what younger Canadians can actually do to push for change in a system that often seems stacked against them.

If you enjoy the show and would like to support our work, please consider subscribing to our YouTube channel. The pod is also available on various audio-only platforms, including:

Apple Podcasts

Spotify

Podbean

Below is an AI-generated transcript of the Missing Middle podcast, lightly edited.

Sabrina Maddeaux: One of the wonderful things about working here at The Missing Middle is regularly hearing from our audience. We read everything you send, but because we’re such a small team, we don’t always have the time to respond.

Cara Stern: So today we’re going to do our best to make amends for that.

Mike is off doing his fancy economist stuff, so Sabrina and I will make our way through the viewer mailbag. Predictably, there are a lot of housing policy-related questions, so we’ll start with this question from someone named Eamon who wrote:

Sabrina Maddeaux: First of all, you’re entirely right.

It’s a huge problem that seniors are largely overhoused in good neighbourhoods, near schools, and in homes with too many bedrooms they don’t need. The problem really is, though, that they don’t have anywhere to go, particularly if they want to stay in their own communities.

Not building that missing middle housing hasn’t only impacted young people, but we haven’t built the type of quality housing in neighbourhoods that people want to live in, as well as walkable neighbourhoods that are appropriate for seniors to downsize.

So when it comes to moving, at any point in time in your life, there’s a huge stressor there, and then you add to the fact that there’s not suitable housing stock. It’s no surprise seniors don’t want to and aren’t moving.

I think the biggest thing is increasing the supply so that they have options. I’m not really in favour of giving additional tax incentives to the wealthiest generation in Canada at the moment, who are already sitting on huge lottery housing gains. There’s already the principal residence capital gains tax exemption. However, I would be open to exploring things like reducing, for example, land transfer taxes. And of course, we talk all the time about reducing taxes on bringing new housing supply online, like development charges and the HST - I support bringing supply online. But I’m curious, Cara, about your thoughts here as well.

Cara Stern: Yeah, I don’t think they need a tax incentive because the tax incentive that they’re getting by doing this would be rent. They’d be collecting it every month. So it seems very unnecessary for us to then use our tax dollars to also subsidize it on top of that. I think that if seniors would like to have people living in their home and have younger roommates, they’re totally welcome to rent out rooms. And that might be helpful for them; it might be helpful for some young people.

Every once in a while, there are stories in the news. You hear of a situation, and it can be mutually beneficial. But yeah, they can get enough rent money out of it that I don’t think we should put our public tax dollars towards it.

This next question comes from Kate, and it’s in a similar vein as that one. And this one was posted on X or Twitter:

Sabrina Maddeaux: Yeah, both those things are tied together. The scarcity of options is due to the lack of new supply. So adding in that HST break on newly built homes that will be primary residences, incentivizes seniors to buy those and plan to downsize, which then, if they successfully downsize, has the effect of hopefully freeing up family-sized homes that are desirable for younger Canadians as well, who are looking to either get into the market or to upgrade where they already live. It’s certainly not the only factor at play when it comes to downsizing, but we’re in a situation where anything to get more of that missing middle supply online, the better.

Cara Stern: I think when you have the time-limited discounts, maybe that would incentivize people to act now or lose that opportunity. And so, with the HST cut, which I think is only one year long, that gives an incentive to buy right now. And so maybe if they did that for seniors, that might be like, “Okay, we have to make this call right now, otherwise we’re gonna lose out on this opportunity.”

If they can build something new that actually appeals to them, then that’d be amazing, because then seniors are living in places that they really like, and they can live in a nice new build, and they would open up those homes for families who need to live in family-size homes. Getting more of them on the market is really what needs to happen.

Sabrina Maddeaux: Exactly. We need more houses of the right type for everyone at this point in Canada.

The next question is from Mary, and it’s been edited a little bit for length, but here’s the gist:

Cara Stern: So for the first one, are houses more expensive or is income simply failing to keep up? It’s both. If houses are expensive and incomes keep going up to keep up with that, then it’s not really a problem. But the problem happens when the disconnect is there, where the home prices are very high and incomes aren’t catching up at all.

I think that Mike said if incomes keep going up at the same rate and housing prices do not increase, it would be something like 25 years before they would catch up. That’s just not possible, which is why we advocate for things that would actually lower the cost of housing and, at least, lower the cost of units for people to live in.

Given the rise of single-person households, that part of the question about social isolation, I think that is very real. There is a lot of social isolation out there, partly due to social media, partly due to the fact that our cities are not really creating places for people to go and hang out and meet each other in a way that is affordable and accessible.

We did an episode on third places, the lack of them in cities and how that’s changed over generations. I really recommend watching it. I think that it’s very real that people are feeling disconnected from the community. There’s a lot that cities can do to make it better for people to feel connected.

Whenever I sign up for activities that are funded by the city, they always give a big discount to seniors, and I always think, “Why is this the case?” And I understand they think of social isolation for seniors, but we know that there are younger people who are more isolated than seniors are right now, especially the age 20 to 30. And so one thing I would like to see is cities not subsidizing it as much for seniors and spreading it across the board, or maybe giving subsidies for young people to take part in these things, because some of the activities can be quite expensive. I’d like to see it more across the board, and then maybe people would have more access to them and be able to make more friends and feel more connected.

Sabrina Maddeaux: Yeah, the answer is everything is bad all at once. Wage stagnation, unemployment, or precarious employment. And then, of course, housing costs. And the reality is that housing costs have soared by so much that even if wages did start to rise again at a normal rate, they would not catch up within years or decades. So housing prices do have to come down if we’re ever going to reach affordability.

I don’t think that cities result in social isolation in the way a lot of people think. People are out a lot. They make friends, and they create social networks. But what I’m seeing, particularly when people hit their late 20s or throughout their 30s, is that living in the city is so unaffordable, especially if you want to get married or have a place of your own without roommates or start a family, so many people can’t afford to stay in the city. So what happens is that the social group that you did make in the city starts moving an hour to three hours, or even to an entirely different province or country, away.

Cara Stern: They all move to Alberta these days. That’s where they’re all going.

Sabrina Maddeaux: A lot of Alberta, a lot of the far reaches of Ontario. And then you see your social group, once every six months if you’re lucky. And that is really isolating, especially if you start to raise a family. And often on top of that, you’re moving away from your family or potential grandparents. So it is lonely, and there is something to the cycle that you put in the work to make these friendships and these social connections, and then it feels like they’re constantly being torn away from you. So that is another impact of the housing affordability crisis that I think isn’t spoken about as much as it should be.

Cara Stern: That’s a really great point. And you’re right. As people are moving farther away and traffic gets worse and worse because there are so many more people, it becomes very difficult to visit people. It becomes a thing where it’s a whole-day thing if you’re going to go out to Hamilton to visit your friend; you’re not going just for the evening.

I hear a lot of people talk about how hard it is to make friends as an adult, and I think that is a big part of it, although I do think that so many people complain about how difficult it is to make friends that I’m like, “Most people seem to want to make friends; try making friends with them and make an effort.” If you can get over the fear of talking to people and rejection, hopefully you can at least make some new friends, ideally nearby, because proximity is a huge part of maintaining friendships.

Sabrina Maddeaux: That’s very true.

And when you also have a class of renters. They tend to move every few years, especially in this day and age. Not renters who have been in their place 10-30 years. But a lot of the time now, especially with unpredictability about rental evictions or rent increases or having to have a different commute for your job, that proximity is constantly changing.

And the point you made about congestion is such a good one. My friends who did move out of the city- when they initially went to Hamilton or beyond, you could go out for dinner, but the way congestion is now, for everyone to see each other, even for lunch, it requires an entire day’s commitment because it could take up to three hours there and up to three hours back, on a bad day. And even friends who now live on the west end of Toronto- I’m in the East end - even that takes an hour and a half. It used to take an hour and a half to drive to Buffalo. Now it takes an hour and a half to get from one end of the city to the other.

And public transit isn’t any better because literally every route from east to west has some sort of diversion or multiple, so it’s a major issue. I’m thinking we should do an episode on this now, but I’ll get us to the next question for the sake of time, which is from Chris and came from the comment section of our Greenbelt episode.

Cara Stern: I think it provides land for whatever we want it to provide land for. I think it depends on what the zoning is. I think for a lot of developers, it’s easiest and the least risky thing would be to just build a bunch of single-family homes that are nice country estates, as this person said, because they will sell and they don’t take that long to build. You don’t have to build a giant tower and take all the risk and get a certain number of investors to start building it. So people will build these single-family luxury country estates, if that is what we make it easiest to build.

But I think we can zone in different ways. They can provide incentives, and there are some ghost stations in the Greenbelt. If you look at transit-oriented communities, that’s where people are putting these high-rises where they can have more affordable homes. If we started looking at those ones in the Greenbelt and tried to incentivize building tall, I think that would actually happen. It all depends on policy.

Sabrina Maddeaux: I also want to say, I don’t think we necessarily need towers in the Greenbelt. I’m not against them. But there’s a difference between luxury country estates and single-family detached homes. And we have a shortage of single-family detached homes. They don’t have to be huge, but with a yard, three bedrooms, the ability to raise a child- maybe two children in them. It’s the lack of supply of those that is contributing to the housing crisis and affordability issues. So yeah, we do need more of those and probably in the Greenbelt.

Cara Stern: But of course, we know that it’s been politically very risky for Doug Ford. I don’t think given the controversy that happened there, I don’t think we’re actually going to see anything open up in the Greenbelt while he’s in power. So it might be a bit of a moot point.

And of course, immigration always generates a lot of conversation online @canucklhead asked a couple of questions in the comment section of one of our episodes, Out of Nowhere: How Canada Fell Behind Alabama.

Sabrina Maddeaux: I agree. It’s a big part of the solution, and we had such an unsustainable surge of immigration that we now need to course correct. And it can’t just be for a year or two. We really need to tie this to our ability to house people and other infrastructure stressors as well. So I entirely agree that housing is a demand-supply equation, and we need to keep demand low from the immigration front as we work to build more housing.

Cara Stern: The only problem with it is that a lot of people in Canada aren’t having kids, and we need population growth to sustain our economy and pay for all the benefits that people get- that a lot of seniors get, for example; old age security is the single largest line item in the federal budget.

When it comes to immigration numbers, I really don’t think the number itself matters so much as how it balances out with housing, because we can have high immigration if we have a lot of new homes being built.

If we are going to cut immigration and we are going to have slower population growth, we just need to understand that the sacrifices that need to come out of that are going to come from across-the-board, it can’t just be from young people. And I hope politicians have the courage to maybe upset some of the wealthiest people in this country and some of the very reliable voters and say that “sacrifices have to happen, and it cannot all be from young people.”

Sabrina Maddeaux: And the last question is for Cara. Emily writes”

Cara Stern: When it comes to Edmonton, Grow Together Edmonton is the organization I know of, the EMB group that has been very active in getting multiplexes built. I think you need to do all of those things. You need to get involved with your local politician, potentially write to your MPP, your MLA, or your MP. Write to your city councillor as well to let them know that you care about this.

I always let my politicians know that I’m a one-issue voter and that issue is housing. And it’s really important that they understand that being pro-housing is going to get them votes, because I think a lot of politicians think that we’re going to get votes from older people and we need to focus on what they care about. And that is true when you look at who’s actually coming out to vote. I think if they start to see a change there, they see a lot of young people coming out and caring about it, that would make a difference. People have to get involved for there to be change. No one’s going to come and solve it for you because the incentives just aren’t there. The people in power don’t have the incentives to make it better for you, so you need to step up.

Sabrina Maddeaux: Definitely. Young people, please vote. Politicians do pay attention to that. There’s this perception that even when young people care about an issue, they don’t actually show up to the polls. So get there, prove them wrong. Make sure that they’re listening to you and get involved in your community as well, because it is a major issue that it’s often very well-housed, wealthy retirees who are heard the most by politicians.

And part of that is they have the time on their hands. And our consultation processes are not effective. They’re set up a lot of the time to always listen to the loudest dissenters, whether they have legitimate concerns or not. So we do need to fix those processes.

But in the meantime, get out there, be heard, vote, and also encourage your politicians to fix those processes so that everyone is heard, not just the loudest voices with the most money and the most time on their hands.

Thank you so much for watching and listening and sending us your questions. And to our producer, Meredith Martin and our editor, Sean Foreman.

Cara Stern: If you have any thoughts or questions about how no one’s coming to save you and you’ve got to save yourself in this economy, please send us an email to missingmiddlepodcast@gmail.com.

Sabrina Maddeaux: And we’ll see you next time.

Additional Reading/Listening that Helped Inform the Episode:

The Disappearing “Third Place”: Why Making Friends Is Getting Harder

Funded by the Neptis Foundation

Brought to you by the Missing Middle Initiative

In this episode of DemograFix, Mike Moffatt and Cara Stern unpack the data behind Canada’s falling birth rate. They explore why childlessness is rising, why one-child families have become increasingly common despite the number of children women say they want, and how housing costs, delayed parenthood, childcare, culture, and shifting lifestyles are reshaping family life across the country.

If you enjoy the show and would like to support our work, please consider subscribing to our YouTube channel. The pod is also available on various audio-only platforms, including:

Apple Podcasts

Spotify

Podbean

Below is an AI-generated transcript of the Missing Middle podcast, lightly edited.

Cara Stern: Canada’s fertility rate is considered ultra-low, with only 1.25 children per woman. But one of the questions we received last time we mentioned that number was: is this a case of fewer women having children, or is the number of children each woman is having going down too?

Mike Moffatt: So we decided to take a look at the numbers to find out what is actually happening here.

Let’s start with what the fertility rate is measuring. It’s the number of children a woman has in her lifetime, and it needs to be 2.1 children per woman to replace a population. But of course, much of our economy is based on a growing population, so if anything, it probably should be higher than that.

Cara Stern: And this isn’t just a Canada problem. Developed countries all around the world are facing this problem, but to different extents. Ours is falling much faster than other developed countries, though. We’re now in ultra-low territory along with South Korea, Japan, and Italy. It used to be that we could look at Germany and say, “Oh, that’s a low-fertility country,” and see it as a bit of a cautionary tale. But now Canada has actually surpassed Germany. So something is happening in some countries, such as ours, that is making them fall faster than other countries.

Mike Moffatt: And it’s not just Canada versus the world here. It’s not falling at the same rate across provinces within Canada. When we look at fertility rates, Manitoba and Alberta are well above the national average, while British Columbia is at the bottom. It’s cities where fertility rates and birth rates are dropping the fastest, with Victoria and Vancouver both having fewer than one baby per woman.

Cara Stern: Well, it’s not very surprising given that housing costs in Vancouver and Victoria are extremely high, so I’m not surprised that those are some of the worst places for fertility rates in Canada.

Mike Moffatt: Absolutely. Because what happens is that you can’t really afford to have a child there. Some folks just don’t have children there but stay in the city, and others decide to move elsewhere to raise a family. So we really do see a big lack of children in our big cities, just because it’s gotten too expensive to raise a family.

Cara Stern: It reminds me of when you pointed out that the most common age for someone to leave Toronto was zero. Of course, I was like, “That’s weird, how is it zero?” But I guess it’s a bunch of people with babies who are deciding to move.

Mike Moffatt: Yeah, it’s not the babies that are deciding to move, at least not directly, but they’re certainly influencing their parents’ decision. You can imagine a couple living in a high-rise rental apartment or condo. A baby comes along, and after a few months, they’re like, “This just ain’t going to work.” So what they do is something called “drive until you qualify,” where you hop in your car and drive as far away as you need to go in order to qualify for a mortgage.

That’s why we’re seeing a big influx of young families into smaller communities like Brantford, Woodstock, Peterborough, and so on, because it’s simply gotten too expensive to raise a family, not just within the city of Toronto, but much of the GTA.

Cara Stern: So those are some of the trends. But now we’re at the question that I really want to dig into today, which is: what is actually happening here?

Mike Moffatt: Well, the first issue is that the proportion of women who have never had a child is increasing. We’re seeing a significant increase in the number of women who, by the age of 50, have never had a child. It used to be around 1 in 10 or 1 in 8; it’s now 1 in 6. That statistic looks at 50-year-old women, so it doesn’t really account for the fact that Millennials and Gen Z are having fewer kids. I wouldn’t be surprised if, over time, that inches up to 1 in 5 or 1 in 4 women in Canada who never have a child. So that is a large part of the story here.

Cara Stern: That’s a good point. Right now we see the trend of fertility rates going down, but we don’t know where it’s going to end, if fertility is going to push later and if there’s going to be any increase at all, or if it’s just going to get worse and worse over time. We know that the age of first births is pushing later over time, and we know that fertility becomes a much greater challenge as people get older. So I suspect that’s part of the story too.

Mike Moffatt: Yeah, absolutely. And here’s why I think we’re only going to see an increase here: there is a new StatCan report, and we’ll link to it in the show notes.

Cara Stern: Yeah. And that’s not a long period of time; I guess that’s basically one generation, right?

Mike Moffatt: Yeah, absolutely. It wasn’t that long ago. I was in high school back then, and I know I’m old, but I’m not that old. This is in the span of about 30 or 35 years or so, where, again, you’ve gone from 50% to 40%. If we keep on that pattern, you’re getting close to zero pretty quickly.

Cara Stern: Who are these women? Is it evenly distributed, or are there patterns in their life stages or in the choices they’re making?

Mike Moffatt: Yeah, there are patterns regarding which women are more likely to have kids and which women are less likely. If we start with the more likely, it tends to be women who are either currently married or have been married at some point. Where it gets to be less likely is if you’re in a common-law relationship, or you were a couple but are now living apart, or you’re not in a couple at all. Those, not surprisingly, are less likely to ever have a child in their lifetime.

Cara Stern: I guess that seems obvious. Marriage and then children are still the traditional path for most people, so that seems pretty straightforward. Although it’s worth noting that marriage is still a key part of the story, I do suspect a lot of those common-law couples are people who will eventually get married. And then there are places like Quebec where marriage in general is on the decline, so there are a lot of people who are in common-law relationships who may as well be married. Many will have kids. Quebec, actually, I believe, has a higher rate of fertility compared to a lot of other provinces. I guess we’ll see if that changes over time, because there is a cultural change happening there.

Mike Moffatt: Yeah, there really is. And there are, again, these trends more towards common-law couples. I wouldn’t be surprised if the rates of childbirth go up with common-law couples as it continues to get more common.

When we look at tradition, it turns out that women who more actively practice religious beliefs are more likely to have kids than those who do not. Which, again, is not all that surprising, but it’s nice to see Statistics Canada confirm some of the stereotypes that we might have.

Cara Stern: I guess a lot of religions still encourage having children, and some prohibit birth control. I guess that as society is getting less religious, that correlates with fewer children. That’s another one that seems pretty obvious.

Mike Moffatt: Absolutely. I think there is a whole bundle of things—you mentioned birth control and just general beliefs and so on. We also see that women who have immigrated to Canada are more likely to have kids compared to those who were born here.

Cara Stern: What about education level? Because that’s what I constantly hear: as women became more educated, they wanted fewer kids. So we can look at that and say, “Well, that’s the headline. That’s the main story here of the dropping fertility rate.” Did they find a relationship there between education and whether people are having any kids at all?

Mike Moffatt: This is really interesting. This is where it starts to get a little counterintuitive.

Cara Stern: That’s interesting. So there’s a big difference there between looking at whether women in their 30s have any kids based on whether they had post-secondary education, but not much difference between the two cohorts in their 40s. It sounds like university might be delaying people having kids, but it doesn’t necessarily mean that they aren’t having kids at any higher rates?

Mike Moffatt: This data is just a snapshot in time. We can make conclusions about women who are currently in their 40s, but we can’t really say what’s going to happen 20 years from now to women who are in their 20s. But I do think it is fairly safe to say that it seems to be mostly a delay issue rather than women in university never having children, though we won’t know for sure until 10 or 20 years from now.

It looks safe to say that over the long run, your probability of having a child as a woman doesn’t really depend on whether or not you went to university.

Cara Stern: And I can’t say it enough: Delaying having a kid leads to fewer kids because it’s harder to have kids as you get older. I think we have to always remember that, because there’s been some cultural change where we say, “Okay, well, lots of people are having kids in their 40s. You can delay it as much as you want.” And the truth is, you can’t delay it as much as you want. You can delay it to a certain extent, but it becomes harder and harder the later you go. If you’re in your late 30s, it just becomes harder.

So that probably leads us to the next part of this, which is when they do have kids, are they having as many as they used to?

Mike Moffatt: No, they’re not. This is not just the probability of a woman having zero kids going up, but we are seeing that drop from being more likely to have three going down to more likely to have two, and so on. And this drop began decades ago.

If you go back to the late 1970s and early 1980s, the most common family type among families with children was three or more kids. Sometime in the early to mid-80s—the Family Ties era, I’m thinking of all those great family shows from the 80s—two children became the norm. So there was this drop from having three or four kids in the 70s down to two kids in the mid-to-late 80s.

Cara Stern: And what is it now?

Mike Moffatt: Well, now it turns out that one-child households are the most common in Canada.

Cara Stern: That’s a huge drop, man. When you think about three children or more in the 80s to one now. And that’s not a long period of time in history. I feel like when I was growing up in the 90s, I hardly knew anyone who was an only child, and now it’s so common. I wonder how much of that is due to choices versus economic constraints. Any idea?

Mike Moffatt: Yeah, well, it’s funny because I kind of grew up the same way. I had one friend who was an only child, and that was actually noteworthy, so we always kind of pointed it out to him.

Cara Stern: Oh no, you were being mean to him.

Mike Moffatt: I’m sorry, Greg, if you’re listening; it was nothing personal.

But it turns out it’s a bit of both: it’s choice and economic responses. Because the big inflection points track with major societal changes. Obviously, the widespread availability of the pill and other forms of birth control started in the early 1970s, and women entered the labour force in much larger numbers in the mid-to-late 1970s. Then you get into economic responses like the 2008 financial crisis and COVID—all of these shocks have left a mark. Some of them are choice-based, but some of them are responses to changing economic conditions.

Cara Stern: And there’s that U of T study that we talked about in another episode on the connection between housing and fertility, which attributed half of the drop to housing costs. There’s a sense that you need to have your housing situation figured out before you can even think about having kids. We talk a lot on this program about how three-bedroom apartments are very hard to find, and people like to drive until they qualify for one of those three-bedroom units—whether they’re apartments, houses, whatever. Most likely a house if they’re not in the city.

A lot of people just wanted more kids than they had bedrooms. Even if you can get away with it when they’re little, it’s tough. I can tell you firsthand, with two kids sharing a room, when one wakes up, the other one wakes up. Especially when you’re trying to sleep train and do things to help your kid sleep through the night and help your other kid be rested for school. I can tell you firsthand that is very tough.

Mike Moffatt: It is. And I actually think that’s weirdly probably even more common now than it was in the 1990s, because family sizes were larger then, but you had a lot more four, five, or sometimes six-bedroom homes. Nowadays, young families are in a lot of two-bedroom apartments or smaller townhouses. You get a lot of folks my age or Boomers saying, “Well, you should have like six kids in two-bedroom homes.” But they didn’t do that; maybe their grandparents did. So it is a real problem nowadays that it’s almost impossible in a lot of bigger communities for a young, middle-class family to get a home that has three, four, or five bedrooms suitable for raising multiple kids. It’s just not economically feasible in many cases.

Cara Stern: Yeah, I’ve heard that argument many times from people like, “Oh, if you go back historically, people didn’t have their own bedrooms. You had many people sharing a bedroom; that’s how it used to be.” And the homes that are now considered starter homes were people’s full homes that they had several kids in. I get that; that is fair.

But when you grow up having your own bedroom, basically that was just the norm, so you don’t want to give your kids a lower lifestyle than what you had, right?

People don’t have to have kids, so it has to be desirable. And we know that there is still a desire to have kids.

Mike Moffatt: Absolutely. I get a little frustrated at people saying, “Well, back in the 50s, people raised these large families in 900-square-foot homes.” Those 900-square-foot strawberry box homes in a lot of places in Canada cost over $1 million right now. So I don’t know that many young people whose noses are turned up, going, “Oh, a $1.2 million house is not enough for me.”

We have to make it clear here that those types of strawberry box homes that are 900 square feet, which had decent-sized yards where you could let your kids out to play, are really expensive.

Nowadays, when we’re talking about a smaller home, it’s like 500 or 550 square feet in a high-rise, and you’re living on the 37th floor. If you want your kid to go play outside, you’re telling them to take an elevator and walk through a car park. It’s a very different existence, and it’s one of the reasons why families just aren’t having as many kids as they used to. We’re seeing the StatCan report, the U of T report, all of these reports basically saying that families want to have more kids, but the economics of raising a child just aren’t making that feasible.

Cara Stern: Yeah, I’m thinking back to when I was looking at pre-construction condos, and I would go to the developer and say, “Hey, I’m looking for something where I can raise a family, so maybe 800 square feet.” And they were like, “Oh, that is like our big units; this is going to be the most expensive option.” Every one of them was out of our budget.

Even if you’re willing to raise them in a condo that is 800 or 900 square feet, it is just not affordable. It’s not going to happen because it’s a lot.

It was actually cheaper to go look at these old, small homes that, of course, need a lot more upkeep, but still, it was wild to think of the reactions that I got. It was like, “Oh, you’re looking for luxury living.” Like, am I really? It’s very strange.

Mike Moffatt: Yeah, it is. And again, I think if we offered Millennials and Gen Z 1950s-style homes at 1950s-style prices adjusted for inflation, they would absolutely leap at that.

Cara Stern: Even at 20% interest, for sure.

Mike Moffatt: Yeah, even at 20% interest, which they didn’t have in the 1950s. But yeah, this idea that people are turning up their nose at family-size homes that cost two times their income is just ridiculous. I really wish it would come to an end.

Cara Stern: The StatsCan report said that we’re seeing young people wanting more kids now than they did five years ago, which I thought was interesting. I wonder if that’s just a pandemic thing. They’re looking at 2021 to now, so I think about how that must have played a role.

Mike Moffatt: Yeah, you don’t hear it at all. These comments go back in time. There was a whole movement in the 60s, 70s, and 80s—there’s The Population Bomb book—and a whole group of folks advocating for zero population growth. We don’t talk about that as much. One of my favourite characters from The Mary Tyler Moore Show once said that he was hoping to have six or seven kids in the hopes that one of them could solve the population problem. That’s kind of my hope with climate change.

There’s this idea that we should have fewer kids and that would help with emissions, but we have to remember that if we have more kids, we’re going to get more geniuses who figure out new technologies and new solutions to this. So I’ve never been a believer in this idea that fewer people are going to be our environmental salvation; I actually think it’s the opposite.

We need to have lots of people working together towards a common goal to figure out how we deal with these issues, whether it be environmental issues, issues around global conflict, and so on. How we’ve always solved these problems as a species is having really smart people get together, bounce ideas off each other, and try new things. I don’t think we’re going to solve the world’s problems by shrinking the population, shrinking the number of people working on these problems, and hoping that leads us to some salvation. I just don’t think it’s coming.

Mike Moffatt: Yeah, and that’s the important thing. I don’t think we should be setting a target birth rate or fertility rate or anything like that. I don’t think we necessarily should be saying higher is better or lower is worse; it’s all about choice. The thing that stays with me from all of this is that the desire for family, the desire to have kids, hasn’t gone away. But we’ve created a country where it’s become harder and harder to have kids.

Cara Stern: Thanks, everyone, for watching and listening. Our producer is Meredith Martin, and our editor is Sean Foreman.

Mike Moffatt: And if you have any thoughts or questions about mid-1980s family sitcoms, please send us an email to missingmiddlepodcast@gmail.com.

Cara Stern: And we’ll see you next time.

Additional Reading/Listening that Helped Inform the Episode:

Proportion of women aged 20 to 49 without children, by age group and selected sociodemographic characteristics, 2024

‘One and Done’ is the new norm: inside Canada’s growing one-child family trend

Living arrangements of children in Canada: A century of change

Fertility in Canada, 1921 to 2022

In this episode, Sabrina Maddeaux and Mike Moffatt explore the capital gains exemption on primary residences, why it exists, why politicians are terrified to touch it, and whether it unfairly advantages homeowners over younger Canadians and renters.

They break down the politics, economics, and unintended consequences of taxing home sales, while comparing Canada’s system to other countries and asking whether fixing housing affordability has become politically impossible.

If you enjoy the show and would like to support our work, please consider subscribing to our YouTube channel. The pod is also available on various audio-only platforms, including:

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Below is an AI-generated transcript of the Missing Middle podcast, lightly edited.

Sabrina Maddeaux: In Canada, if you buy a stock or bond it goes up in value, then you sell it, you have to pay capital gains tax on the profits unless it’s a tax-sheltered vehicle like a TFSA. However, the same isn’t true of a home you use as a primary residence, which is exempt from capital gains taxes. This has led to concerns that the exemption has contributed to the housing crisis.

The Canadian Tax Federation notes that the exemption creates an incentive for families to overinvest in housing. And the exemption isn’t cheap either. It costs the federal government over $8 billion in lost tax revenue each year.

So, Mike, why does it exist in the first place?

Mike Moffatt: You’re not the first person to ask that question. And in fact, there have been proposals to change these rules over the years, but even the mere suggestion of changes tends to cause an uproar.

If we go all the way back to 2018, some Liberal caucus members from Ontario floated the idea of having capital gains taxes apply to homes that were owned for fewer than five years, as a way to deter housing speculation. This wasn’t even all homes - it it was just a small subset - but the Conservatives naturally pounced on it. And Justin Trudeau, the Prime Minister of the day, had to make it very clear that he or his government would never even consider such a move.

I know that any tax is bound to be unpopular. But why do you think a capital gains tax on housing is such a third rail, even one that’s designed to be an anti-speculation measure that would only hit a handful of people?

Sabrina Maddeaux: There’s always the fear that once you implement any tax, it just keeps expanding - which is a lot of the public’s experience in Canada.

But the idea that you put money into a home in Canada and then you’re entitled to its appreciation and it will be a retirement vehicle or something you can take out loans against in the hard financial times, is so psychologically baked in to the Canadian idea of home ownership and financial planning that it’s incredibly difficult, if not impossible, to convince homeowners to ever consider forgoing that. And a huge swath of the public - certainly the older population who votes and donates more and interacts more with politicians - are those homeowners who stand to benefit the most from the capital gains exemption?

At the same time, even if you come down with more taxes on potential speculators or investors, so much of the Canadian public are investors, or have secondary residences, because of the fact that we let housing skyrocket for years. The psychology was that it would always go up. And that psychology went from it’ll always go up to I’m entitled to it always going up and making all the money associated with that.

Mike Moffatt: That makes a lot of sense. People are entitled to their entitlements, as one politician famously said about 25 years ago.

It does make sense when you look at who is more likely to vote. Homeowners are more likely to vote than renters. Older people are more likely to vote than younger people. If you pick the wrong group to pick a fight with, it would seem to be older homeowners who have generated a whole lot of capital gains in their houses.

Sabrina Maddeaux: And that’s been the demographic that’s primarily freaked out when changes like this have been proposed over the years. But I’m curious: why were primary residences exempt from capital gains in the first place?

Mike Moffatt: It’s time for Professor Mike to give a little bit of a history lesson here.

The modern capital gains tax system comes out of a 1966 royal commission. And there’s this famous report - at least famous to econ nerds like me - called the Carter Report. The Carter Report advocated this exemption.

Now, their concern was just that it would be hard to enforce a capital gains tax on housing because you have to sort of monitor a bunch of things that the federal government wasn’t used to monitoring. You’d have to sort of figure out how to deal with inflation. The Carter report basically said it’s too much of a headache. Don’t bother.

Sabrina Maddeaux: That’s a really interesting history, and that very much tracks - that they decided it was more trouble than it’s worth.

As we know, there’s still a lot of housing data that we don’t track in Canada. And the CRA is often a mess. So I can only imagine the extra complications that would come with having to take into account reporting, home sales and values across Canada. But I’m wondering if other countries have exemptions similar to Canada's, or if we’re some unique outlier.

Mike Moffatt: It turns out a lot of countries have made similar recognition (*** check wording in audio) as Canada. This is just too much trouble to track.

Countries in general aren’t great at imposing any kind of wealth tax, which essentially this would be.

Of those 40 countries, there are really only four outliers: Japan, South Korea, Sweden and the United States, where having to pay capital gains taxes on primary residences is pretty common, at least for high-value properties. But even when you look at those, you have countries like the United States where some people do have to pay capital gains on their homes, but they get to deduct mortgage interest on their taxes. It’s like, “We’re going to tax you on one end, but we’ll give you this deduction over here.”

Sabrina Maddeaux: So we’ve covered how this impacts homeowners and sellers themselves. But what impact does the exemption have more broadly on housing and the nation’s finances?

Mike Moffatt: The big one is that $8 billion in lost revenue each year that the government could certainly use for other things, or to cut the taxes of young middle-class people, something that you advocate quite a bit. They could tax me more and you less. And I’m sure you’d be all for that. But if we go beyond just what this means for the federal government, the capital gains system does create some lock-in for older residents. And I can refer to a Globe piece that I wrote a few weeks ago about what can happen for an older person.

Let’s say you’ve got this house that is appreciated to 2 to 3 million and you’re 65 or 70. One of the things people suggest doing is, say, “I’m going to downsize at home, go into something smaller, and then put the remaining million or two into stocks and bonds and things like that.” If you do that, any of the capital gains that you get on the stocks and bonds over time- the dividends, the interest- you’re going to have to pay capital gains tax on. It does discourage older people from downsizing their homes. It does have all of these distortions, but there’s not a lot of evidence that it’s a major driver of our housing crisis.

And you just look at the countries that people point to as having affordable housing systems, like France and other countries. They all have Canadian-style exemptions. On the other hand, the United States, which we point to as the poster child for housing dysfunction, has one of the more stringent rules when it comes to capital gains taxation for housing. If you do this kind of cross-country comparison, it’s hard to say that these countries that have capital gains taxes have been able to avoid a housing crisis and that we should follow suit.

Sabrina Maddeaux: That lock-in factor is interesting. I’m curious. I would think that would come behind other factors preventing seniors from downsizing, like the lack of appropriate downsizing options in their communities, affordable downsizing options, and also the psychological toll and the difficulty that comes with moving.

Mike Moffatt: I agree. The psychological side of it, that’s never going to go away no matter what policy.

I would say that there is a bit of a chicken-and-egg thing here: part of the reason why we don’t have those downsizing options is that it’s not tax-efficient. I agree; it’s not the only thing that prevents older people from downsizing.

There are some countries that have tried to deal with this distortion. I don’t think we can point to it and say, “That’s the reason that seniors don’t downsize.” There are a lot of complex factors.

Sabrina Maddeaux: That’s an interesting solution coming from Australia, too, especially as people start to live longer. I mean, in years past, you might have downsized and then not expected to be around for another two decades. But now people are looking for ways to ensure their financial future and security for much longer.

But beyond the politics of it, would there be any downside to treating primary residences like any other asset for capital gains?

Mike Moffatt: One big problem is it would give investors a leg up, because right now, if it’s a secondary residence, you do have to pay capital gains tax on it. This system that we have now, with the exemption for primary residences, makes it easier for families to compete with investors. But if you levelled the playing field that way, by treating single families as investors, it actually advantages investors. Because investors, if you buy a single-family residence, you’re able to deduct mortgage interest against your rental income. But if you own the home as a primary residence, you can’t. That’s actually one of the reasons why the US has those rules to make mortgage interest tax-deductible. Because if you don’t do that, you create a system where investors are advantaged over families. And I think most people don’t want that. If Canada did change those capital gains rules, we would probably have to change a bunch of other rules too, or else we would be advantaged investors over single families.

Sabrina Maddeaux: I do think we have to be wary of that with any tax changes.

Both you and I have been big proponents of the HST removal for new builds in Ontario that came through recently. But what we’ve seen is that a lot of investors are now planning to buy up large amounts of units, and they’re going to get massive tax breaks because of this. The question is, how much is this actually going to benefit families who are buying homes, and will it bring new supply online that isn’t just existing supply that’s empty? I don’t know if you have any perspective on how this is rolling out.

Mike Moffatt: The HST side, I think it’s too early to tell. I’m a little bit less worried about investors buying condos. I view it as one corporation buying a bunch of homes from another corporation. And if they’re going to rent out those homes, I would prefer that to them being vacant.

I think it is still an open question around how much the HST changes are going to help the already built homes get into other people’s hands versus how much is going to create new supply. I think it will create new supply, but it’s an experiment. We’ll have to revisit this in a year when we have a little bit more data.

Sabrina Maddeaux: Follow-up episode.

Mike Moffatt: Absolutely. We love those.

Let’s leave the HST aside for a second, but let’s go back to the personal residence exemption on capital gains tax. Would you support changes there, or do you think any changes would be worse than the status quo?

Sabrina Maddeaux: In theory, I’d support it, but it’s so politically untenable and would take so much time and be implemented and then maybe rolled back that it’s just not worth it. I think there are other ways that we can get there quicker.

What are your thoughts?

Mike Moffatt: That’s essentially where I am as well.

When people suggest putting capital gains on primary residences, they are trying to solve a very real problem. There is a lot of inequality that is going on here, but I don’t think it’s the right vehicle. It’s administratively complex. It’s a political third rail. I think there are other things you can do. You went to the carrot side. I’ll go to the stick side.

It’s never made sense to me that a home valued at $300,000 pays the same property tax rate as one that’s $3 million. We don’t do that with income taxes. I would love to see the property tax system made more progressive. That if you have a less expensive home, you should pay a lower property tax rate than somebody who owns a $3 - $10 million home. Everybody’s going to be paying tax, but the folks with the less expensive home, maybe their tax rate is one-quarter of 1% of the home’s value. And then you can go into tax brackets. And then once you get above $5 million, it’s a 2% tax on top of that. I think you can make the existing system more progressive without having to introduce a measure that would be hard to enforce and very politically unpopular.

Sabrina Maddeaux: You see, that’s another one I agree with in theory, but our housing system is so broken that you couldn’t do that right now without a ton of add-on consequences and pushback. And the reason for that is that home values have become so inflated that you have people who bought in much earlier who don’t have super high incomes, but their home might now be valued at $1 to $2 million or even more, and they wouldn’t be able to afford the property tax increases.

I think that’s actually one of the reasons why, in Ontario, they haven’t reevaluated homes for property taxes since 2016. And they should be doing that. But people would riot if suddenly their home was valued at $1 million - although they would like to sell their home for $1 million or $2 million - but then they would have to pay the associated property taxes as they exist today, let alone higher rates.

Mike Moffatt: All of that makes sense.

First of all, we would have to have accurate property values, and at least here in Ontario, that’s not the case. You also have a lot of seniors who bought their homes in the 1970s or 1980s for next to nothing. Now, they have multimillion-dollar homes on paper, but they’ve never earned the incomes appropriate for those homes. They would be burdened by that.

It’s one of those things an econ nerd like me, on paper, goes: “This might be an elegant solution, but it runs into all the political barriers that capital gains tax on primary residences runs into.”

Sabrina Maddeaux: And that’s the headline here: our housing affordability has become so out of whack and so screwed up that even common-sense, elegant solutions might not be tenable right now. We need to get things back in order.

Thank you, everyone, for watching and listening and to our producer, Meredith Martin, and our editor, Sean Foreman.

Mike Moffatt: And if you have any thoughts or questions about how common sense is no longer tenable, please send us an email to missingmiddlepodcast@gmail.com.

Sabrina Maddeaux: And we’ll see you next time.

Additional Reading/Listening that Helped Inform the Episode:

Canada should look to Australia on eliminating barriers to downsizing for seniors

The Conservatives' misleading claims about a 'secret' Liberal housing tax

Differentiated Capital Gains Tax by Number of Houses Only in South Korea... OECD Countries Exempt Primary Residence Regardless of Number of Houses

Capital Gains Taxation in Canada: History and Potential Reforms

Funded by the Neptis Foundation

Brought to you by the Missing Middle Initiative

• Canadian urbanism has a family problem: despite decades of anti-sprawl policy and record transit spending, families and young workers are increasingly leaving major metros for smaller communities where housing is attainable, even if that means longer commutes and more car dependency.

• Since 2016, Canada’s metros have experienced sustained net domestic outmigration, with roughly 60,000 more people leaving metros than moving into them last year, a trend that began well before the pandemic.

• The people leaving are not primarily retirees heading to cottage country. The biggest losses are among Canadians under 35 and families with young children, precisely the demographic groups our cities once attracted and retained.

• Toronto, Montréal, and Vancouver continue to dominate the outmigration story, collectively losing more than 120,000 people through domestic migration last year alone. Meanwhile, smaller metros and rural communities across Ontario, Quebec, Nova Scotia, and Alberta are seeing significant gains from domestic migration.

• Many of the communities losing the most ground are the very places planners and urbanists often celebrate as “success stories” in combating sprawl. Families are voting with their feet, and the data suggest current urban planning approaches are failing to deliver affordable, family-friendly, transit-supportive communities at scale.

When families vote with their feet

Canadian urbanism has a problem. Despite, or perhaps because of, the changing nature of our cities, families are increasingly voting with their feet and moving to smaller communities. Despite record transit investments, Canadians are increasingly moving to places where driving is the only option. And it is not just Canada’s biggest metros experiencing outmigration; the so-called urbanist success story of Kitchener-Waterloo is, too.

Urbanism is failing in Canada, and a two-decade-long effort to reduce sprawl through policies such as urban growth boundaries has caused sprawl to accelerate due to the leapfrogging effect, in which development is pushed out to smaller communities without transit, leaving middle-class workers facing long daily commutes back to the metros where their jobs are located.

Here is how Canadian families are voting with their feet and leaving our cities.

Defining our terms

For this piece, we’ll be examining metro areas, not municipalities. So think of the Greater Toronto Area, not the City of Toronto. Statistics Canada divides regions into three types: census metropolitan areas (CMAs), census agglomerations (CAs) and more rural or remote areas that are not in a CMA or CA, based on the following formula:

A census metropolitan area (CMA) or a census agglomeration (CA) is formed by one or more adjacent municipalities centred on a population centre (known as the core). A CMA must have a total population of at least 100,000, based on data from the current Census of Population Program, of which 50,000 or more must live in the core based on adjusted data from the previous Census of Population Program. A CA must have a core population of at least 10,000 also based on data from the previous Census of Population Program. To be included in the CMA or CA, other adjacent municipalities must have a high degree of integration with the core, as measured by commuting flows derived from data on place of work from the previous Census Program.

Currently, there are 41 different CMAs and 111 different CAs in Canada. As of 2025, 31 million people live in a Canadian CMA, 4 million live in a CA, and 6.3 million live outside of a CMA and CA.

Families are leaving our metros

Given that the majority of Canadians live in a metro (CMA), it would be reasonable to assume that these communities are gaining population from the other two regions. And for most of Canadian history, that has been the case. However, since 2015, Canadian CMAs are experiencing net outmigration to other communities in Canada.

Statistics Canada’s Table 17-10-0149-01 provides data on net interprovincial and intraprovincial migration by CMA and CA. It tells us the net number of people who moved into a metro from another part of Canada. If more people moved in from domestic sources than moved out, the figure is positive; if more people left, the figure is negative.

The data is by year, from July 1 to June 30.

In Figure 1, we see that net migration to CMAs turned negative in 2016-17 and has been negative ever since. In Canada last year, 60,000 more people moved out of Canadian metros than moved in.

Figure 1: Net Domestic Migration by Community Type and Year, Number of Persons

Data Source: Statistics Canada’s Table 17-10-0149-01, Chart Source: MMI.

While the pandemic naturally accelerated these trends, this is not simply a pandemic effect, as the phenomenon pre-dates the pandemic by several years, as shown in Figure 2.

Figure 2: Net Domestic Migration in CMAs by Year, Number of Persons

Data Source: Statistics Canada’s Table 17-10-0149-01, Chart Source: MMI.

This phenomenon is not due to retirees selling their expensive homes in downtown Toronto and moving to cottage country, though some of that happens. Rather, it is due to the outmigration of those under age 65. A particularly worrisome trend is the outmigration of people under 35. It used to be that our metros were places that our ambitious young people moved to. Now they are places they move from.

Figure 3: Net Domestic Migration in CMAs by Age, Number of Persons, July 1, 2024 to June 30, 2025

Data Source: Statistics Canada’s Table 17-10-0149-01, Chart Source: MMI.

Aggregating all 41 CMAs like this obscures the fact that most metros are, in fact, gaining population from the rest of Canada. According to Statistics Canada data, 16 places gained more than 2,000 persons through domestic migration last year, as shown in Figure 4. This includes rural and remote parts of Quebec, Ontario, British Columbia, and Nova Scotia. The other 11 were all metros, including the large metros of Edmonton, Ottawa, and Calgary. In Ottawa CMA’s case, most of this growth is occurring outside of the City of Ottawa, as we outlined in our feature on Lanark County.

Figure 4: Net Domestic Migration by Community, Number of Persons, July 1, 2024 to June 30, 2025

Data Source: Statistics Canada’s Table 17-10-0149-01, Chart Source: MMI.

Conversely, eight communities lost more than 1,000 people through net domestic migration, with the Toronto, Montréal, and Vancouver metros collectively losing over 120,000 people. Winnipeg, Regina, and Kitchener-Cambridge-Waterloo also lost over 1,000 persons through net domestic migration last year.

Figure 5: Net Domestic Migration by Community Type, Number of Persons, July 1, 2024 to June 30, 2025

Data Source: Statistics Canada’s Table 17-10-0149-01, Chart Source: MMI.

Our three largest metros have lost population due to domestic migration each year this century, though the declines accelerated in 2015-16. Net outmigration peaked in 2021-22 at 160,000 persons and currently stands at 120,000 persons per year, well above pre-pandemic levels.

Figure 6: Net Domestic Migration in Toronto, Montréal, and Vancouver CMAs by Year, Number of Persons

Data Source: Statistics Canada’s Table 17-10-0149-01, Chart Source: MMI.

This domestic metro out-migration largely, but not exclusively, is an MTV (Montréal, Toronto and Vancouver) problem, as collectively, the other 38 CMAs experienced steady in-migration during the 2010s, which increased during the pandemic.

Figure 7: Net Domestic Migration by CMA Type and Year, Number of Persons

Data Source: Statistics Canada’s Table 17-10-0149-01, Chart Source: MMI.

We can get a better idea of who is leaving by breaking the data down into five-year age categories. Because net outmigration in Toronto CMA is substantially higher than in Montréal and Vancouver CMAs, we will use two different charts. The largest domestic outmigration in Montréal CMA is among people aged 25 to 29, whereas in Vancouver it is among those aged 30 to 34. In general, early-career workers and young children are the most likely to leave these metros, though Montréal also experiences a fair level of outmigration among those aged 55 through 64.

Figure 8: Net Domestic Migration by Age, Number of Persons, Vancouver and Montreal CMAs

Data Source: Statistics Canada’s Table 17-10-0149-01, Chart Source: MMI.

The trends for the Toronto CMA are quite similar, with young children and early-career workers most likely to move to other communities. It is important to remember that this data is for the Greater Toronto Area, not the City of Toronto, so it includes municipalities such as Oakville, Markham, and Brampton. As with Montréal, the data show a cohort of people in their late 50s and early 60s leaving the metro, but the numbers are relatively modest compared to the exodus of workers under 40 and children under 5.

Figure 9: Net Domestic Migration by Age, Number of Persons, Toronto CMAs

Data Source: Statistics Canada’s Table 17-10-0149-01, Chart Source: MMI.

To get an idea of how these patterns have changed over time, we can examine the levels of net domestic migration experienced by a CMA and a CA relative to ten years ago. Figure 10 contains every CMA and CA that gained 1,000 more people through domestic migration than they did a decade ago. The top of the list is dominated by the GTA-proximate metros of Oshawa, Barrie, St. Catharines-Niagara, Hamilton, and Brantford, with Kitchener-Cambridge-Waterloo and Guelph as notable omissions.

Figure 10: Change in Net Domestic Migration by CMA and CA, Number of Persons, 2014-15 vs. 2024-25

Data Source: Statistics Canada’s Table 17-10-0149-01, Chart Source: MMI.

In Figure 11, we show the communities that have seen their net domestic migration drop by 1,000 or more persons.

Other than the big three metros, the list exclusively contains communities in Ontario and British Columbia, and not just any communities in these provinces, but ones that urbanists and municipal planners often cite as success stories in fighting sprawl and creating livable, urban communities. Yet families are voting with their feet and moving out of these places or moving to them at lower rates than a decade ago.

Figure 11: Change in Net Domestic Migration by CMA and CA, Number of Persons, 2014-15 vs. 2024-25

Data Source: Statistics Canada’s Table 17-10-0149-01, Chart Source: MMI.

In short, if governments want to fight sprawl and create walkable, family-friendly communities with transit options, they need to examine their policies and determine what works and what doesn’t. Families are voting with their feet and moving out of the very communities urbanists and planners suggest those families want.

If that’s not failure, we’re not sure what is.

MMI, as we do most years, submitted a brief, and, as in most years, we did so on the last possible day, which was last Friday. Although MMI’s mandate is all things young/urban/middle-class, our brief this year, as with last year, focuses entirely on housing, as it is the most pressing issue facing young, urban, middle-class Canadians. Our brief makes ten recommendations: five relating to the need for the government to develop a middle-class housing plan, and five on immediate actions the government can take to make housing more attainable for Canadians.

Below is a copy of our submission; a PDF version is available for download at the bottom of the page.

Recommendations

Recommendation 1: Set an explicit goal to end the middle-class housing crisis by 2035.

Recommendation 2: Develop a set of annual key performance indicators which are aligned with the 2035 goal.

Recommendation 3: Recognize the importance of family-sized homes and the desire for the option of homeownership in future housing plans.

Recommendation 4: Have federal government policies create a greater distinction between new and resale homes.

Recommendation 5: Create policy certainty, particularly around immigration.

Recommendation 6: Extend the enhanced HST rebate on new owner-occupied housing beyond one year and expand it to all provinces.

Recommendation 7: Make development charges exempt from the federal portion of HST through a transparent direct-to-buyer model.

Recommendation 8: Implement the promised MURB program and ensure it is designed to create gentle-density housing.

Recommendation 9: Tie future federal housing and infrastructure funding to provinces and municipalities to the adoption of pro-gentle density housing reforms.

Recommendation 10: Increase the number of gentle-density options in the CMHC Housing Design Catalogue.

Background

The federal government has instituted several measures to help end the middle-class housing crisis, including its recent agreements with the province of Ontario to provide a full HST rebate on homes under $1 million and to cut development charges by up to half. The combined impact of these moves will cut the cost of new homes by 15-20 percent, make new homes competitive with resale homes, increasing housing starts.

More work needs to be done, however. Earlier this year, the CMHC released projections showing that housing starts will fall in each of the next three years. The HST and DC reforms will help reverse that trend, but they are insufficient to meet the government’s 500,000 annual housing-start target.

The need for short-term action and a medium-term plan

The federal government has set an ambitious target of reaching 500,000 annual housing starts by the year 2035. An ambitious target is admirable, but it is no substitute for a goal.

A housing target is a means, it is not an end. It is not a goal. A young family in search of a home does not care how many housing starts there were last year; they care about finding a home they can afford in their community that meets their needs.

Canada’s lack of a middle-class housing goal creates a policy vacuum that the Office of the Federal Housing Advocate has attempted to fill with a recent report advocating a 2060 target to address the middle-class housing crisis. That goal, if adopted, would cement a future of intergenerational inequality for Generations Z, Alpha, and Beta, threatening to tear apart the country’s social and economic fabric.

However, given the nationwide decline in housing starts, the federal government needs to act immediately.

In that spirit, MMI makes the following ten recommendations to help develop a long-term housing plan while also addressing immediate policy needs.

Recommendations relating to the development of a middle-class housing plan

Recommendation 1: Set an explicit goal to end the middle-class housing crisis by 2035.

The federal government needs a housing plan with a clear goal, with a reasonable time frame, and a set of quantifiable objectives, such as “every middle-class, dual-earner couple in their 30s should be able to afford to purchase or rent a new, entry-level home, in any community in the country, suitable for a household of five, by 2035.” This 2035 date is aligned with the end date of the federal government’s commitment to double housing starts within a decade.

The purpose of our suggested goal is not for the federal government to engage in central planning, deciding where homes are built and at what price. Rather, it is to set up the conditions for success and to understand what is working well in the current housing system and what requires improvement. Defining a clear goal clarifies the trade-offs in public policy, ensuring optimal value for money.

And, most importantly, a clear goal should be based on the attainability of new housing. Governments should not be in the business of manipulating resale home prices. Rather, it should be about ensuring that builders can create suitable options that families can afford, that the market can respond to changing conditions, such as unexpected population increases, and that governments fill in the gaps with below-market-rate housing where necessary.

Recommendation 2: Develop a set of annual key performance indicators which are aligned with the 2035 goal.

These performance indicators should not be limited to raw housing start numbers. They should consider the types of homes families need and how affordable they are to purchase or rent, using key performance indicators such as rent-to-income and price-to-income ratios.

These KPIs should not be based on whether a middle-class person or couple can afford their current circumstances, but rather whether they can afford to move to a new city or have another child. Existing metrics, such as core housing need, estimate whether a family, as it exists today, can afford to have its housing needs met in the community where it currently lives. It says nothing about whether they can move, nor does it estimate whether they can afford another child. However, research shows that housing affordability constraints reduce family size, as many families sensibly opt not to have children they cannot afford. Our goals should not just ask whether a family can afford its current circumstances, but also whether it could move to another city or have another child.

The KPIs should recognize that both higher incomes and lower home prices are both pathways to eliminating the affordability crisis. They should also focus on lowering the price of basic new housing, not resale, by reducing the “cost of delivery” of new homes to create new housing options for everyone, from young people to seniors, and let market conditions determine the price of resale homes.

This will require enhanced data collection, as our current data is not fit for purpose. For example, unlike our global counterparts, the CMHC does not record a project in their housing start data until the foundation meets grade. It is a poor real-time indicator of the health of the housing construction sector, as it reflects investment decisions made anywhere from one to three years before a start is recorded. These are solvable problems; the CMHC could track excavations, as the U.S. and Australia do, to provide a better real-time indicator of new construction activity.

Recommendation 3: Recognize the importance of family-sized homes and the desire for the option of homeownership in future housing plans.

When it comes to housing, “a unit is not a unit”. Different families have different needs. The federal government should establish more detailed housing targets, categorizing them by year, geography, housing type, cost, and intended market. Through such targets, governments can better monitor where housing supply is keeping pace with demand and identify areas that may require further policy reforms.

The federal government has several pre-existing tools available to aid in these calculations, including the Housing Assessment Resource Tools (HART) project, the RoCA 3.0 Benchmark, and the Montréal Method. In particular, the chosen methodology should be able to provide targets differentiated by unit type/size, as well as separate targets for ownership and rental housing, which is possible using most standard methods, including RoCA 3.0.

For example, the report Families on the Move uses the RoCA 3.0 method to show that, across Ontario in 2021, the province had a shortage of 500,000 homes, with the majority of the shortage occurring within the ground-oriented ownership housing category.

Because housing needs are highly sensitive to immigration targets and population growth, these housing start targets should be revised immediately whenever the federal government announces new immigration targets or Statistics Canada issues revised population projections.

Recommendation 4: Have federal government policies create a greater distinction between new and resale homes.

Governments across Canada are focused on increasing the supply of new housing, as they have correctly recognized that there is no solution to the housing crisis that does not involve increasing the rate of housing construction. However, housing policies at all three levels of government often fail to distinguish between new and existing homes, which can lead to two major unintended consequences: decreased affordability by stoking demand, and reduced supply by choking off much-needed investment.

The combination of increased affordability and robust supply growth can only come by addressing the cost-of-delivery crisis. These delivery costs include everything from construction to land to various taxes, fees, and charges.

Lowering construction costs increases the viability of home construction, leading to more homes being built. This increase in housing supply puts downward pressure on both new and existing homes as they compete in the marketplace. Similarly, as construction costs rise, so too do the prices of new and existing homes. Take municipal development charges, for example. High and rising development charges make some projects unviable, slowing housing construction, putting upward pressure on new and existing homes.

Governments can address the cost-of-delivery crisis by cutting taxes on housing construction. The linkage between these taxes and construction is not always obvious. The GST on housing, for example, is, at its core, a housing-construction-related tax, as it applies only to newly built homes. This is why enhanced GST New Housing Rebates lower homebuilding costs and improve affordability.

The GST New Housing Rebate contrasts with affordability policies that are agnostic to whether the homes are new or preexisting, such as the federal First-Time Home Buyers’ Tax Credit. Because the tax credit does not target construction costs, it simply increases demand in the system without increasing supply, leading to higher prices, though it does so in a way that advantages first-time homebuyers over other groups.

There is a fundamental difference between lowering the cost of new builds and boosting demand for existing homes. Some governments have recognized this; British Columbia, for example, has a helpful property transfer tax exemption for newly built homes.

Unfortunately, too many federal policies do not distinguish between new and resale homes. One example is the foreign buyer ban, which is intended to protect the existing housing stock from being bought up by investors. However, because the ban does not differentiate between buying existing homes and financing the construction of new homes, it is likely to reduce overall supply, as an important source of pre-construction condo financing has been blocked.

This is a fixable problem. Australia recognized that buying up existing homes and providing financing for new homes are two substantially different activities, with differing impacts on the housing supply. As such, their foreign buyer ban exempts new or near-new purchases by foreign buyers to help increase the amount of capital available to builders. Canada should institute a similar provision to help increase the housing supply.

It is one thing for governments to influence who can buy existing homes; those policies can have merit, but when those policies are applied to new homes, they slow the growth of the housing supply, exactly the opposite of what governments are hoping to achieve.

Recommendation 5: Create policy certainty, particularly around immigration.

There are a number of policies set to expire in the coming years, including the aforementioned foreign buyer ban. Development timelines are long, so policy uncertainty increases project risks, making them more difficult and expensive to finance.

In recent years, population growth from immigration and non-permanent residency has swung wildly, from adding 1.2 million persons in 2023 to a small population decline in 2025. Canada’s current Immigration Levels Plan only includes plans for 2026, 2027, and 2028, with the targets and ranges for 2027 and 2028 listed as “notional”.

Uncertainty about the future trajectory of population growth makes it impossible for builders, developers, and infrastructure builders from municipalities to utilities to effectively plan. The number of new apartment units and water treatment plant expansions needed varies substantially depending on whether our population is growing by 200,000, 500,000, or 800,000 through international migration. Both the public and private sectors are reluctant to take on new projects amid this level of uncertainty, and when they do, they face higher financing costs due to the perceived risk of default.

The federal government can substantially reduce this risk by having Immigration Level Plans extend for ten years rather than three, and by clarifying the conditions under which they may deviate from their notional targets and ranges.

Recommendations relating to immediate policy reforms

Recommendation 6: Extend the enhanced HST rebate on new owner-occupied housing beyond one year and expand it to all provinces.

Governments across Canada are focused on increasing the supply of new housing, as they have correctly recognized that there is no solution to the housing crisis that does not involve increasing the rate of housing construction. However, housing policies at all three levels of government often fail to distinguish between new and existing homes, which can lead to two major unintended consequences: decreased affordability by stoking demand, and reduced supply by choking off much-needed investment.

The recent agreement between the federal government and the province of Ontario to provide a 100% HST waiver for one year on new, owner-occupied housing will make homes more attainable for middle-class families. This policy expires on March 31, 2027; it should be extended for at least one more year and, ideally, made permanent.

In Canada, basic necessities like groceries, prescription drugs, and medical devices are exempt from HST (or, more accurately, “zero-rated”). Which means when a 0.1% goes to buy caviar and foie gras, they are not charged HST on those purchases.

However, housing, which both international and national law recognize as a human right, is subject to HST when an owner-occupant purchases a new home. We can certainly understand placing HST on luxury homes, but forcing a young couple buying a modest home to raise a couple of kids to pay HST on that purchase, while keeping caviar and foie gras exempt from HST, is indefensible.

Recommendation 7: Make development charges exempt from the federal portion of HST through a transparent direct-to-buyer model.

Typically, in Canada, developers are required to pay for development cost charges and related fees when they obtain their building permit. They carry these fees on their construction loans, which increases the amount of capital required for the project and requires them to pay interest during the construction period, adding thousands of dollars to the cost of a home. The developer then incorporates the development charge and interest costs into the home’s price. The buyer of the home then has to pay GST (and, depending on the province, provincial sales taxes) on the embedded development charges and interest costs, creating a tax-on-tax.

These expenses can be avoided if development charges (and related fees) were treated like other new housing purchase-related taxes and paid as a separate line item on a purchase agreement. Charging at closing would save buyers thousands of dollars in interest costs, and charging as a separate line item would allow governments to exempt development charges from GST, eliminating the development charge tax-on-tax. As detailed in the report How a Direct-to-Buyer Development Charge System Can Save Homebuyers $68,000, switching to this model saves new homebuyers tens of thousands of dollars.

A direct-to-buyer development charge system has the following features:

• Transparency: Instead of being buried in the final price, development charges are shown as a separate line item on a purchase agreement, making them visible to the homebuyer and ensuring they know exactly how much they are paying in development charges.

• Price Inclusion: The price of the home would include the visible development charges so that the buyer can incorporate them into their mortgage. They would not be treated as closing costs, and the development charge rate would be “locked in” at the time of the purchase agreement, protecting the buyer from future increases in development charges.

• Tax Exemption: Since development charges are now listed as a separate line item rather than being included in the final price, governments can make this line item tax-exempt. Currently, embedded development charges are subject to GST, PST, and land transfer taxes, resulting in a tax-on-taxes scenario. Eliminating this tax-on-tax saves can save buyers tens of thousands of dollars.

• Savings through cutting out the intermediaries: Under the current system, development charges are carried on the construction loan for a project, which racks up thousands of dollars in interest expenses, which is great for lenders, less so for homebuyers. The developer then passes along the development charges, the interest expenses, plus a profit margin on both, to the end homebuyer. By cutting out the intermediaries, homebuyers can achieve substantial savings.

While the federal government cannot directly implement a closing-line-item development charge model, it could require it as a condition of signing on to infrastructure funding programs. They could also encourage provinces to make this change by committing to exempting line-item development charges from the GST.

Recommendation 8: Implement the promised MURB program and ensure it is designed to create gentle-density housing.

During the 2025 election, the federal Liberals campaigned on re-instituting the 1970s-era Multi-Unit Rental Building (MURB) tax provision. Such a provision, if well-designed, can facilitate the private sector in building much-needed missing-middle rental housing and channel investor dollars toward new construction, rather than competing with families for single-family homes. The federal government should launch consultations on the program’s design to ensure that rental projects that begin construction on or after January 1, 2027, are eligible for the tax provision.

The introduction of MURB should be coupled with a time-limited incentive for investors who currently own non-purpose-built rental properties and sell those units to non-investors, if they reinvest the proceeds into a project eligible for the MURB tax provision. This incentive could include a temporary reduction in capital gains taxes on such sales. Such a measure would simultaneously stimulate the development of new rental housing and get existing single-family homes out of investors’ hands and back into family ownership.

Recommendation 9: Tie future federal housing and infrastructure funding to provinces and municipalities to the adoption of pro-gentle density housing reforms.

Through programs such as the Housing Accelerator Fund and the Build Communities Strong Fund, the federal government is providing tens of billions of dollars to provinces and municipalities to create housing-enabling infrastructure. The federal government should ensure it receives the full value of that investment by requiring provinces and municipalities to create the necessary conditions to enable the construction of gentle-density homes. At a minimum, the federal government should require the creation of a form-based, gentle-density zone (R-GZ) for all new greenfield low-rise developments and reform development charges.

Recommendation 10: Increase the number of gentle-density options in the CMHC Housing Design Catalogue.

The CMHC housing design catalogue can help small-scale developers build gentle-density housing in existing neighbourhoods. Unfortunately, the options are limited for Ontario, with just seven available designs, only one of which has four bedrooms. Increasing the diversity of options, from ADUs to stacked townhouses, can lower barriers to developing gentle-density options in existing neighbourhoods.

About the Missing Middle Initiative

The Missing Middle Initiative, housed at the University of Ottawa’s Institute of the Environment, seeks to revive Canada’s urban middle class. We’re devoted to addressing the challenges facing young urban Canadians, who are finding it harder to join the middle class. Through research, a Substack newsletter, thought pieces, videos, and the Missing Middle Podcast, we explore the barriers preventing young Canadians and new families from entering the middle class and the policy solutions needed to help them achieve this.

We are big believers in creating a vision of success, a North Star that can help guide one’s thinking and choices. For Canada’s young, urban middle class, our vision of success is as follows:

Missing Middle Initiative’s North Star: A Canada where every middle-class individual or family, in every city, has a high-quality of life and access to both market-rate rental and market-rate ownership housing options that are affordable, adequate, suitable, resilient, and climate-friendly.

Download a PDF version of MMI’s federal budget submission here:

Mmi 2026 Pre Budget Submission

1.25MB ∙ PDF file

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In this episode, Cara Stern sits down with Vass Bednar to unpack the rise of “surveillance pricing,” a growing practice where companies use everything from your location to your purchase history to figure out the maximum price you’re willing to pay.

At its core, this is a conversation about fairness. What happens when markets become less transparent, price signals become individualized, and consumers lose any common understanding of what things “should” cost?

If you enjoy the show and would like to support our work, please consider subscribing to our YouTube channel. The pod is also available on various audio-only platforms, including:

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Below is an AI-generated transcript of the Missing Middle podcast, lightly edited.

Cara Stern: The next big hit to your wallet might not be inflation. It might be that stores can figure out the maximum you’re willing to pay and charge you exactly that price. It’s called surveillance pricing and politicians are starting to debate whether Canada needs to ban it. Today, I’m talking to Vass Bednar, managing director of the Canadian Shield Institute and author of the book, The Big Fix.

She’s someone who’s been writing about the problems with surveillance pricing since before almost any of us knew to worry about it, and we’re so glad to have her back on the program.

Vass Bednar: Thanks for having me.

Cara Stern: There’s algorithmic pricing, there’s dynamic pricing, and there’s surveillance pricing. What is the surveillance pricing that we’re talking about now?

Vass Bednar: Surveillance pricing sort of layers in with that computational data-driven pricing strategy. So beyond using a variety of factors like what your competitors are pricing something at, personalized algorithmic pricing requires excessive data use about who you are, where you live, your behaviours online, sometimes your past purchase history and sometimes where you are and where you’re going.

So it’s a much more invasive pricing tactic that’s supercharged by data and much more common in kind of an e-commerce context, where there’s way more information asymmetry. It’s kind of just you and a screen, whether it’s your phone and a loyalty program or, shopping online. That’s the bigger difference.

Cara Stern: The first time I remember hearing about this type of pricing was with Uber, where, if you’re on an iPhone versus an Android, you’d get different prices. That’s a bare minimum version of this. But then also people started getting used to dynamic pricing with Uber.

What’s different with this?

And back to the Uber example, some evidence that if you’re using a business credit card, Uber will charge you more. Again, inferring your willingness to pay and squeezing more there.

Where I think there’s a difference between the kind of supply and demand type of calibrations or I’ll use the euphemism pricing experiments that we’ve seen with Uber is external factors. Say it’s raining. There’s more demand and they’ll tell you prices are higher right now. Or, the Blue Jays just won the World Series, fingers crossed, there’s more people looking for rides out there.

Versus, this ride is going to cost you more, Vass, because you tend to take this route, we know you’re very likely to take this route, and you’re using a business card. So based on you more as an individual. But some of the individual and group stuff is also something we can dig into. I’m worried I’m making it more convoluted than clarifying it.

Cara Stern: I’m trying to understand it because I know different apps that’ll give you discounts based on things you’ve purchased before. I get sometimes with Shoppers, Canadian Tire, or Tim Hortons, they will say, “Hey, we know you like to buy this kind of sandwich and you haven’t bought it in a long time.”

Vass Bednar: What’s your favorite thing at Tim Hortons?

Cara Stern: Sometimes it gives me breakfast sandwich discounts because I like their breakfast sandwiches and they’re good in a pinch. Sometimes it’ll be a little bit of time since I’ve bought a breakfast sandwich because I get them when I have to go drive somewhere far, but it doesn’t happen all the time. And then I’ll get a notification saying, “Hey, you haven’t bought a breakfast sandwich in a while. Would you like a discount on that? If you buy it today, you’ll get this discount.” And to me, that feels like a form of surveillance pricing that already exists.

Vass Bednar: It’s a form of it. But I would say the more insidious is something like the Taco Bell app being able to infer when it’s your payday and increasing the price of your gordita deal versus incentivizing you to come back to Tim Hortons. Tim Hortons is actually a great example because they were investigated by the federal privacy commissioner and many provincial privacy commissioners for their invasive data collection in their loyalty program. Tracking you down to where you are.

I’m a big fan of the idea that you don’t really need to reinvent wheels most of the time. My joke is shopping our closet: What do we have? What can we wear? Do we have anything that actually suits this? And as Canada considers whether and when we’re going to tolerate this — because there may be some instances where we think it’s appropriate, say for discounting — we need to decide if we’re looking at it from a privacy perspective, consumer protection perspective, or a deceptive marketing angle. There are different ways to get at it.

To your point that it’s increasingly becoming a feature of how we experience markets. Absolutely. Even geographic pricing, which is more blunt. I used to think that my Secret deodorant costs the same at every single Shoppers Drug Mart. And that’s just not the case. And that’s okay.

There was a good Toronto Sun piece from a few months ago looking at Big Macs costing different amounts at different McDonald’s. So it’s not that the pricing differential itself is egregious. It just reminds us that that pricing strategy defies what we may have as an expectation of what the norm is with pricing, when actually something very different is happening.

Cara Stern: I get that the idea is that they’re using your personal information, and it seems people think that’s a little bit icky when people are talking about this. I see Abacus Data did some research into how people felt about it, and they found 83% of Canadians wanted it banned or regulated.

So what is different about it now?

Vass Bednar: What’s different is that, for example, discounts (such as senior discounts) are more blunt and uniformly experienced. If you’re over a certain age, you have equitable access to that discount.

That discount is not predicated on you having a mobile device or using a mobile device when you shop, sharing additional information. Couponing is a very dumb in the sense that it’s not supercharged by data. You and I can still access the same deals when they come in a flyer.

Where we can’t see each other’s universes is in these closed app ecosystems that are more finely calibrated to who we are. Are they necessarily discriminating against us as individuals? That’s where it gets tricky with privacy law. Privacy law is designed for harms that individuals experience, but more often than not, personalized pricing is about segmenting, creating particular cohorts, and particular profiles. And that needs to be part of our conversation.

How comfortable are we with people’s information beyond past purchase history and that relationship that you have with a store? I think our conversation in Canada on personalized pricing feels it very sudden. It feels it almost came out of nowhere. There’s been a lot of learning and overviews and “what do you mean this is happening.” It also comes out of the credit industry.

In the early 2000s, when Canadian Tire was continuing to develop their loyalty program, which is now called Triangle Rewards, they also had a credit offering. And this is more big data seductive era where we questioned less what we were doing with information and were just amazed by what data science could do. Canadian Tire found things like anyone that had ever purchased something with a skull on it in the past was not as reliable to give credit to. And the people that were most reliable was anyone that had ever purchased the little felt circles that you put under furniture. They were given leeway with credit because they’re seen as being responsible. So in that way, your data can privilege you. The personalization of pricing that I think has gotten a bit out of control as a function of our weak privacy law, tends to rely on much more.

Cara Stern: I think it came out of nowhere because you had politicians starting to talk about it. I wonder what can even be done to stop this, because the hard part I’m getting at is, where’s the line? Sometimes you’re like “That senior getting discount over that senior because we know that they don’t buy it, or they haven’t bought it in a while, that’s fine. Knowing that they have this much in their bank account? Don’t like that.” How do we actually draw the line when you’re making policy?

Vass Bednar: Okay, I’ve got a total grab bag on this. You’ve asked me a special question. I love being asked about policy solutions. But I also wanted to offer that algorithmic pricing also happens in labour markets, where we have gig platforms that are monopsonistic.

I think that’s important in terms of pricing for labour and also that it’s coming for white collar work, whereas nursing is something that we see is quite standardized and fairly predictable with work.

So there are other ways that data-driven pricing is hurting people and maybe not aligned with our values. What can we do? I think the provincial approach, framing as a consumer protection problem, which is what the province of Manitoba is doing, is pretty savvy. Federally, if we wanted to, this majority government could snap their fingers and make an amendment to our federal privacy law, PIPEDA, and say that, profiling, discriminating based on personal characteristics, is just a harmful practice and we can shut it down that way.

Of course, every day I’m refreshing the page looking for AI strategy, privacy policy, online harms. That’s a separate issue. The Competition Bureau, if there were a case that came forward, does have some ways they could think about this. One way that I think is novel is potentially double ticketing, where if there’s two different prices, you’re supposed to give the shorter one.

Is it a form of deceptive marketing?

A new piece of legislation that just says this isn’t allowed doesn’t get us that far because we have to agree on what kind of practice we are pushing back against, without hurting those abilities to get a legitimate discount. And loyalty programs are super interesting because that bargain is more explicit in terms of “I’m going to give up some privacy in exchange for points.”

But even that bargain is starting to fall down as people realize that many loyalty programs are ingesting more about them than they realize.

My biggest hope for Canada is that we kind of keep the conversation going, and don’t just get locked in this more blunt, “yes, no, I support it,” or there are some instances where we’re comfortable with it and we tolerate it, and therefore it is inherently good and helpful. This is not a pay what you can kind. We’re going to calibrate it to what’s possible for you. It’s fundamentally something that is extractive. And the fact that it’s increasingly part of people’s everyday lives and purchasing everyday essentials, I think is particularly egregious and concerning for thinking about Canada’s middle class.

Cara Stern: When it comes to how extractive it is, I understand that’s the goal of it. “Let’s take as much money as we can from that person.” There is a flip side of it where, when I heard about this, I was like, “I’m a pretty frugal person.” Sometimes I’ll wait on something, I’ll set alerts for when something goes down on Amazon and it’ll tell me when it drops to the price I want to pay.

I was thinking, in this case, would it know, “Cara doesn’t like to pay this much for this? We’re going to have to give her a lower price.” And someone who doesn’t mind as much and has more money and can pay more will end up paying more. Is it possible that it’ll turn turn out that way?

Vass Bednar: I’m never a fan of everyday people kind of trying to fight back on these structural failures themselves, but I do recognize there are plugins from Amazon. I’ve tried one.

I’m also in a phase of my life where I’m willing to splurge now and then for convenience. I have used Instacart in the past when I’m in desperate need for some diapers, need a few groceries to get me over the line, my husband’s traveling, I’m tired, or whatever. I’m fine paying a premium. I’m fine definitely tipping someone very well, and I’m fine paying weird fees that Instacart thinks are necessary.

What I’m not fine with is being put into what appears to be from research in the U.S., one of four pricing cohorts, and seeing a different price than is advertised in store and a different price than other people for milk, eggs, and food based on where I live, what I’ve purchased in the past, what other people in my neighborhood tend to earn, areas of the city I spend a lot of time in, or other websites that I go to.

That’s where I think it’s a little bit out of hand. It’s unnecessary.

I’m also totally fine with companies having pricing power. No one is saying that that should be taken away from them. They’ve always had that. Or with companies using data to set prices. Data based on what their competitors are doing is great for a competitive market.

Maintaining a high degree of information asymmetry with individuals? Hiding from them that you’re even testing out different prices with them?

If companies need to do this so badly — and that’s what we’re going to be hearing from more in Canada, because this is what the opposition is starting to organize with in the U.S., and I’m being very surveillant on that. It’s not hard. I just go around the internet — then they should be going out of their way to brag about when and how they’re doing this to us, because they’re hiding it in privacy policies.

And I think there is a sense of appropriate shame. But also there’s a novelty factor where it’s been really interesting to sort of design these apps and test out these prices and earn more money and learn more at the margins. That’s where we’re at.

Cara Stern: What would transparency look like? Would they be saying, your price has been adjusted based on this sort of thing? I don’t know how it would actually play out.

Vass Bednar: That’s one way. A couple of places in the U.S. have this, where they just have this baseline of disclosure. So Uber does show the price for this ride was set by an algorithm using your data. The Washington Post also has this notification now. Again, special offers trying to test what will bring you in. It’s calibrated in a particular way. PlayStation was recently caught running a pricing experiment where they were advertising different prices for different games.

What fascinates me about all this is in this cost of living crisis, opposing personalized algorithmic pricing demands a kind of cross-class solidarity that we probably haven’t seen in a while, or ever, because we have to unite against companies extracting value from all of us by stepping over the line.

The question is, where is that line? How are we going to set it together?

Cara Stern: I guess the algorithm that they use right now, PlayStation will say, “If you’re someone who wants to play on day one, you’re spending this amount. If you want to play it close to release day, that’s the cost of it.” If you’re willing to wait a year, wait even six months, a year or two years, it’ll get cheaper over time.

That’s an algorithm that they’re using. I guess we’re okay with that sort of thing. Price goes down over time as more people get to play the game. But the difference that you’re describing is that, well, the day one price is different for someone who plays a lot versus someone who doesn’t.

Vass Bednar: Yeah. We observe gas prices changing, but you and I can see that. We can track that through the Gas Buddy app. If you and I are both at the gas station, we’re paying the same amount for that. I’m putting aside that we might be participating in loyalty programs.

You and I are both speaking in Ontario. Hydro prices. They fluctuate based on time of day. You and I experience that universally. If we can wait to do our laundry at night, that price, there’s some price dynamism there, but we all experience it equally and we can all predict it.

That’s not what people are opposing with the kind of personalized pricing calibrations. It’s that loss of price anchor. It is, eroding, kind of taking away all the consumer surplus and also creating really intense information asymmetry. You can’t discipline a market that you don’t know.

So I do agree with Premier Ford, who a few weeks ago now said he wants the market to be free, but he said he wouldn’t oppose personalized algorithmic pricing.

Cara Stern: He thinks this is part of a free market.

Vass Bednar: He thinks it’s part of a free market. And I would say that’s an area where we differ, where to my mind, to have a market be more free and fair, we need to have those principles of transparency. We need better privacy laws. You can’t discipline a market that you don’t know.

Cara Stern: You said that the federal government can use the Competition Bureau. Provinces have been talking about this. As you said, Manitoba is the first one in Canada to say something publicly that I’m aware of. What can be done at the different levels? Is there is there one level that really needs to take ownership? Is that federal, or are there things the provincial governments or municipal governments can do?

Vass Bednar: Provincial governments could do something with the Residential Tenancies Acts if they wanted to sort of say, we don’t want commercial landlords to use pricing algorithms or we want them to disclose, etc. That is one potential tool. I used to think that Manitoba was the only province thinking about it, but I’ll correct myself and say that the province of Quebec had updated their privacy law fairly recently.

Their provincial privacy policy basically prohibits you from discriminating against someone based on their personal characteristics. That is a way to say you cannot personalize pricing. But to my knowledge, that law has not been tested, so a case has not come forward. We could better resource these institutions. Maybe a private action case could come forward. And though I love competition law and competition policy, the Competition Bureau is not my first pick because it’s more of a watchdog policing function of the marketplace, whereas privacy law and consumer protection feels more like an upstream, market shaping, carving conversation.

Of course downstream, that might be an interesting lever to get at this. I’d love to see a private action case come forward to the Competition Bureau testing this. I think that would be really interesting. Haven’t seen this yet. I’m not directly planning one, but on my mood board and Vass’s side schemes, yeah, that would be cool.

Frances Lankin, before she became a senator, one of the incredible things she was doing was running the United Way. And she had a hot dog stand, maybe a food truck for the day. She set it up in front of Queen’s Park, and she was protesting the gender wage gap and gender pink tax, also a place we tolerate differential pricing in ways that are weird.

She sold hot dogs to boys for a dollar and hot dogs to girls for $0.75. I thought that was great. I’d love to have a food truck for a day. I just want to look at them and be like, “Oh, you wear glasses? Your hot dog is $1.50. Oh, you bought a hot dog before? Your hot dog is $2.” And people would be upset and annoyed, and it would seem random and discriminatory because it is random and discriminatory. And I would also calibrate the prices in fairly fine ways. So again, it’s not the monetary value. It’s the principle that I think we need to be reacting to.

Sure, if you’re old, I could charge you a little bit less. I’m interested in confronting people with what it feels to be seen by a commercial actor in a way that is invasive.

Cara Stern: You and I both have young kids, and the place where I was willing to spend the most money is when you’re up at 4 a.m. in the first few months and you don’t know what to do. You’re googling something and you’re like, “I’ll buy anything that’ll get them to go to sleep.”

I end up with so many ridiculous things. And I just think, “Oh my God. If they have surveillance pricing allowed and they know that you have a young baby at home, you are screwed.” All of your life savings are going into yoga balls that you can bounce on or whatever else that they say will help with it.

It’s horrible. Hopefully we see some politicians pay attention to this and listen to you on how they can fix it, because it would really be nice to see some protection. We need more competition, but as you said, in a fair way would be nice. If it was transparent, that’d be lovely.

Vass Bednar: Yeah, more competition, but what kind and how? Hopefully we can be as detailed and attentive as the software programs and proprietary algorithms are when it comes to us as we approach this policy problem.

Cara Stern: Thanks so much for joining us. I really appreciate having you on.

Vass Bednar: I’m a huge fan of the show. Long time listener, second time caller.

Cara Stern: The third time, I think.

Vass Bednar: Third time caller?

Cara Stern: Yeah, because you were on our pilot. You were here talking about your book, The Big Fix. I recommend people go and watch that. I love that book. It’s one of those books where I was reading it and I was like “Yes, I’m so angry. I can’t believe this is all happening and no one cares about this.” Or some people care, but not enough people care about this. Get angry. It’s a great book and it’s the perfect length. You get into it and here’s a solution. I loved it.

Vass Bednar: Snack size. Exactly. Let’s go. Let’s make Canada better.

Cara Stern: Thanks so much for watching and listening. Our producer is Meredith Martin and our editor is Sean Foreman. If you have any questions about what calms a crying baby at 4 a.m., you can send an email to missingmiddlepodcast@gmail.com, and we’ll see you next time.

Additional Reading/Listening that Helped Inform the Episode:

Everything Costs More Because the Algorithm Says So | The Walrus

Canadians Are Skeptical of Algorithmic Pricing - Abacus Data

AI-Driven Pricing May Be the Next Shock to Canadian Grocery Shoppers

Algorithms are raising prices for everything. This must stop - The Globe and Mail

Avi Lewis is smart to shed light on surveillance pricing | Canada’s National Observer: Climate News

Algorithmic pricing: Poll finds half of Canadians against

The Missing Middle Initiative and Canada 2020 have come together to create the Homes and Growth Coalition. Through original research, roundtables, and events, the Coalition has tasked itself with creating a comprehensive policy blueprint to restore middle-class housing affordability across Canada.

Currently, Canada has an ambitious target to double housing starts by 2035, but the housing start target lacks specificity on what types of homes, where they will be located, and at what price. It also lacks a blueprint on how to achieve that target.

Without such a blueprint, there is a real risk that the federal government will scale back its housing ambitions. A recent report released by the Office of the Federal Housing Advocate recommends that the government set a target of 2060 to solve the middle-class housing crisis, cementing a future of intergenerational inequality for four generations, Millennials through Beta, which threatens to stifle Canadian productivity and economic growth on a national scale.

Canada cannot wait until 2060 to fix the middle-class housing crisis.

There is a better way.

By the end of the year, the Homes and Growth Coalition will create a housing blueprint that identifies vital policy reforms across all three orders of government, along with a series of objectives and key performance indicators. That Blueprint will be designed to help the federal government both end the middle-class housing crisis and double housing starts by 2035.

The work of the coalition will be based on ten principles that recognize that families come in all shapes and sizes, that a diversity of housing options is needed, and that governments should aim to lower the cost of building new homes, rather than affecting resale prices. Most importantly, it recognizes that affordability is a function of both home prices and incomes; robust economic growth must be at the centre of any housing plan.

The Homes and Growth Coalition is seeking partners to help shape a bold new housing strategy for Canada

In the coming weeks, we will release more details about the coalition’s work, including a release date for the final Blueprint and some of the activities we will undertake.

If you are interested in learning more about the Coalition, or if your organization would like to become a Supporting Partner in this work, please e-mail us at info@missingmiddleinitiative.ca.

In this episode, Mike Moffatt and Meredith Martin explain what sovereign wealth funds are, how countries like Norway use them, and why Prime Minister Mark Carney wants Canada to create the new Canada Strong Fund.

They explore how the fund could finance major infrastructure projects and support long-term economic growth.

If you enjoy the show and would like to support our work, please consider subscribing to our YouTube channel. The pod is also available on various audio-only platforms, including:

Apple Podcasts

Spotify

Podbean

Below is an AI-generated transcript of the Missing Middle podcast, lightly edited.

Mike Moffatt: Hi everyone! Sabrina is off today, and we’re releasing a mini-episode with producer Meredith Martin filling in on sovereign wealth funds. What they are, how they work, and why Prime Minister Mark Carney thinks they are a good idea for Canada.

Meredith Martin: Also, for those in the Toronto area, we’re recording a Missing Middle podcast episode in front of a live audience with all three of the hosts, plus Ron Butler at the National Club on June 1st.

Mike, what is a sovereign wealth fund?

Mike Moffatt: It’s time to play Professor Mike here. So there are actually hundreds of sovereign wealth funds around the world, with some like the Alberta Heritage Savings Trust Fund at the sub-sovereign or provincial level. Norway’s is the most famous, with roughly $2 trillion in assets.

Sovereign wealth funds tend to spread their money across a mix of assets. So we’re talking public stocks, bonds, real estate, infrastructure, private equity, credit, sometimes hedge funds, or direct stakes in non-publicly traded companies.

Meredith Martin: Before we get into what Canada is doing, I think we should talk about Norway for a bit because it’s the largest and I think the one that’s most widely known in Canada. What’s the purpose of Norway’s sovereign wealth fund?

Mike Moffatt: Sovereign wealth funds differ on a number of dimensions. Two of the most important ones are: where does the money come from? And second, how is it used? What is it trying to accomplish?

So if we look at that second question around how the money is used and what it is trying to accomplish, Norway has two separate funds with two separate purposes.

We’ll start with the bigger of the two. The Government Pension Fund Global was established in the 1990s. It is used to invest the surplus revenue of Norway’s petroleum sector into all kinds of international investments, the same way most pension funds do. So it’s typically called the Oil Fund, and it owns stocks and things globally around the world.

The other fund is much smaller. It was created in 1967. It’s more of a national insurance fund, and it is managed separately from the much larger Oil Fund. Unlike the Oil Fund, which invests around the world and owns a lot of companies on U.S. stock markets, this fund mainly invests in Norway and the Nordic region. So it’s more focused on local and regional economic development, investing in local companies, infrastructure like roads and ports, that kind of thing.

Why do you think they created the second fund in the 1990s?

Mike Moffatt: The first fund was designed to grow the economy and develop infrastructure so they could build up the manufacturing sector, the tourism sector, and so on. But there are only so many kinds of investments you can make like that, locally, before you’re just throwing money towards anything and everything. The second fund, the larger one they set up, was: what do we do with this big pot of money that’s probably not going to last forever because the oil in Norway may eventually run out?

And you’re right, they could have just written cheques to existing residents, but that doesn’t really help the future. And if you start writing massive cheques to citizens, you’re going to get a lot of inflation. Everybody’s going to go out and spend that money. So by taking a lot of the cash, pooling it into a second fund, you can buy up stocks and bonds from around the world. You’re not going to get that huge surge of inflation. And it creates this fund where it can pay dividends to the citizens for hundreds of years, so as to ensure the ongoing prosperity of the country.

Meredith Martin: This seems like a really prudent thing to do and very reasonable. But I wonder how many citizens in the world would have been okay with not getting the money. I wonder how they actually got the consensus to do this.

Is the Canada Strong Fund more like the older Norway Fund or the newer, bigger one or something else entirely?

Mike Moffatt: So it’s designed more like the smaller fund, which is designed more for economic development rather than being a fund that’s buying Google stock. It’s really designed to fund large infrastructure projects.

The Prime Minister used the Canadian Pacific Railway in the 1870s as an example of a nation-building infrastructure that this thing can fund. It’s going to operate as an independent Crown corporation.

Meredith Martin: I’ve been hearing a bunch of criticism about it, especially about the fact that the Canada Strong Fund is being debt-financed instead of created with surplus revenues. And I’ve heard a few people say it shouldn’t be called a sovereign wealth fund because it isn’t one. What do you make of that criticism?

Mike Moffatt: I’ve heard that too, people saying this should be a sovereign debt fund. But this really is the second dimension I talked about earlier, around where the money comes from.

It’s not uncommon to have a sovereign wealth fund from a government that has government debt. That’s actually the norm. It’s not the exception. Norway is the exception here. And it can make sense that if you are a government that can borrow for 30 years at three to four per cent, and you can use that money to build infrastructure, which will generate returns of eight, nine, 10%, - it makes sense to do that. The spread between earning 10% versus having to pay four percent makes the whole thing profitable.

I kind of agree with people pointing out that maybe it should be a debt fund rather than a wealth fund. But I still think there can be logic to this.

There’s this other kind of component to this fund, which hasn’t been well explained. But they’re also talking about allowing Canadians to invest directly into the fund. So just the same way you might invest in a mutual fund or an ETF, an exchange-traded fund, if you are a high-wealth investor and go, “Hey, I like what the government’s doing here. I’ll buy in at $100,000.” But it’s really not clear at this moment how that’s going to work.

Meredith Martin: When the fund was announced, Carney said, and this is a quote, “Over time, the fund will grow through asset recycling and reinvestment, creating even greater opportunities for future generations.” How do you think it will benefit future generations? And do you agree that having a sovereign wealth fund is a good idea?

Mike Moffatt: I think it can be a good idea. Like in most things, the devil’s in the details. But, at a high level, I like what they’re doing. And it can really help with a lot of things.

We talk a lot about housing and the housing theory of everything. If this helps Canada build water and wastewater treatment plants, which are needed to be able to build more homes, grow our subdivisions and things like that, that’s a good thing.

I do think there are some open questions around how this is going to fit in with other government programs. We already have a Canada Infrastructure Bank. We already have a lot of agencies out there building infrastructure. So where does this fit in the mix? I worry about duplication.

Meredith Martin: The thing that I found most surprising about the announcement was that I don’t think many people know what a sovereign wealth fund is. I thought they didn’t outline it very well, which is always a complaint with the government. They’re not great communicators in general.

And then the few people I did see talking about it online reacted so strongly to it. And I think most citizens were just like, “What are you even talking about? Why is this a thing?” Do you have any thoughts on the reaction to it and how strong it was?

Mike Moffatt: I think some of the folks who were reacting to it are going to react strongly against anything that the government does. I think that they had some really good points around the fact that this is debt financed. I think they had a lot of good points around that this isn’t particularly detailed.

We’ll have to see 3 to 10 years down the line whether or not those actually created opportunities. I did find it a little strange that it did seem to be the government’s headline in the spring economic update on a thing that 95% of the population won’t really care about or won’t understand.

Meredith Martin: That was exactly my point. It felt weird to me that this was the headline. It was a really odd type of thing to focus on when so few people would even understand what they were talking about.

I, too, am really interested in results, and that’s all I really care about. And I think most of the Missing Middle team agrees with that. Just show me the money.

Mike Moffatt: Show me the money.

Meredith Martin: Or show me the infrastructure project. Let’s see the high-speed rail.

Thank you so much for watching and listening. Sabrina will be back next week. Our producer today is Cara Stern, and our editor is Sean Foreman.

Mike Moffatt: And if you have any thoughts or questions about regional economic development policies in Scandinavia, please send us an email to missingmiddlepodcast@gmail.com.

Meredith Martin: And we’ll see you next time.

Additional Reading/Listening that Helped Inform the Episode:

The Canada Strong Fund: Nation-Building or State Venture Capitalism?

What Canada can learn from Norway’s Sovereign Wealth Fund

Our pension funds must be sovereign wealth funds, too – even if pensioners take a hit

Canada’s spring budget projects economy to grow and deficit to fall

Neither Norway nor Singapore: Decoding Canada’s new sovereign wealth fund

Funded by the Neptis Foundation

Brought to you by the Missing Middle Initiative

Details: Event on Monday, June 1st, at the National Club at 303 Bay St., Toronto, ON. Doors open at 5:30 PM with reception and appetizers. The show begins at 6. Tickets are limited, so we encourage you to purchase yours now.

Buy your tickets here.

From City Hall to Queen’s Park to Ottawa, decisions about who can live, thrive, and stay here are on the table. Join the conversation.

After years of debate, both the federal government and the province have announced measures to reduce development charges, one of the largest hidden costs embedded in the price of a new home. In some Ontario communities, those charges can add to the cost of a newly built home well over $100,000, and in places like York Region, closer to $200,000.

But reducing development charges is only the beginning.

In this episode of The Missing Middle Podcast, Mike Moffatt speaks with Kim Fairley, President of Ontario Real Estate Association (OREA), about what these recent policy changes mean, and what needs to happen next.

If you enjoy the show and would like to support our work, please consider subscribing to our YouTube channel. The pod is also available on various audio-only platforms, including:

Apple Podcasts

Spotify

Podbean

Below is an AI-generated transcript of the Missing Middle podcast, lightly edited.

Mike Moffatt: Development charges can add up to $200,000 in direct costs to the price of a new home in Ontario and add more in indirect costs as they are embedded into the price and assessed GST, PST, and land transfer taxes, creating a tax-on-tax situation. It hasn’t always been this way. DCs used to be relatively modest, but they have risen by over 5,000% in the city of Toronto since the year 2000.

Today, we’ll be talking about development charges and how they could be lowered without increasing property taxes, and the state of Ontario’s housing market, with the president of the Ontario Real Estate Association, Kim Fairley. So, Kim, it’s great to have you here today.

Kim Fairley: Thank you so much for having me. This is wonderful.

Mike Moffatt: Absolutely. Our two organizations back in March worked together on a report called A Pathway to Development Charge Reform, which Alex Beheshti and I coauthored through the Missing Middle Initiative and was published by OREA. The report talks about the importance of reducing development charges and provides seven recommendations on how development charges can be reduced without increasing property taxes.

The very first recommendation in that report was, and I quote, “provide immediate relief to homebuyers and accelerate housing construction through a two-year DC suspension program.” Then, less than two weeks later, the federal government and the province of Ontario announced an agreement that would cut development charges by as much as 50% over three years. Not exactly what the recommendation was calling for, but pretty close. So I want to speak about both the development charge agreement and the HST agreement between the federal government and the province of Ontario. What impact do you see it having on Ontario’s housing market?

Kim Fairley: Great question. I think it’s going to have a lot of great impact on our housing market provincewide. I know that there are different markets within the province, so you’ll see different factors hit all of those areas. But the reality is the government did a fantastic job. We want to commend Premier Ford, Minister Flack, and the federal government for all of those announcements they did a couple of weeks ago.

Is it the exact recommendation? No, but it definitely falls in line with it. We’re really looking to how do we help move that needle along in homeownership and affordable homeownership. The $8.8 billion announcement was huge when it comes to helping municipalities with those development charges, and they’re really geared to helping municipalities that have high ones lower those for the consumers.

It’s a really great program. We’re really hoping that municipalities take that offer up and lower the DCs to help make the housing more affordable for folks in their area and move that needle forward. In regards to the HST announcement, again, another step in the right direction to try to get first-time homebuyers especially into the market. Hopefully the government works with us on some of the other recommendations and maybe expands that to the general public, where those folks could really make a difference. If they expand it, that really opens it up to resale homes.

If I’m a first-time home buyer, I maybe can’t afford that million or $800,000 house. Even with the HST rebate, if it’s expanded out, it really could open that resale area up for first-time homebuyers, which is really huge. I can see it really swing the market provincially in an upward position.

Mike Moffatt: I think it’s going to be positive as well. I was recently on Matt Brown’s podcast with the head of the London area homebuilders, and he was saying that in London they’re already seeing the impact of the HST move. Even with just the HST move, they’re seeing a lot more activity in showrooms and actually increased sales already. You mentioned that this is a different market across the province, but are you hearing that it is having any impact yet?

Kim Fairley: Yeah, I think it does for sure. We’re talking homes up to $130,000 in a price difference. That’s a big deal. Even for me up in Sault Ste. Marie—I’m a northern kid—our new homes average between 600,000 and 700,000. Even for that spectrum, that’s a big difference for people up in the northern areas to have that swing into their favour when it comes to being able to buy that house.

Mike Moffatt: I’m really glad you brought up the Northern Ontario thing because I have to admit, we don’t talk about the northern part of the province enough here on the podcast or at MMI. Beyond just development charges and HST, how different is the northern housing market from the one that most of us know in southern Ontario?

Kim Fairley: It’s different in a lot of ways. Just because your market averages are different, what happens typically in southern Ontario, we normally see the opposite happen in northern Ontario. But it still doesn’t mean that we don’t have the same concerns. Affordability is still affordability.

It’s not to say that other municipalities should take that same way, because we do know that DCs definitely do help with certain things like infrastructure build and things like that. We don’t want to say that we’re totally against that. It’s just for a community like us, we knew it would have such a big impact on that affordability stance, so we’re really happy they took that path.

Mike Moffatt: When I talk about how development charges are too high and point out that they have increased by over 5,000% since 2000 in Toronto, I often get pushback that it’s simply impossible for municipal governments to function without high development charges. But you’ve pointed out that you live in a city that doesn’t have them at all. How is that possible? How is the Soo able to function with basically no development charges?

Kim Fairley: It’s part of that municipal service corporation. For us in Sault Ste. Marie, we do have a public utilities corp, which helps cover that cost of infrastructure build or repair throughout the whole community. We see that bill basically stretched out across everyone, which is really great because the amount of growth in the Soo alone in the last five years has been pretty substantial.

When I’m hearing some of my colleagues across the province go, “building a house is too expensive” — we’ve got all these other things that sort of factor into the way that builds can come apart. For us [in the Soo], we’re seeing that growth be tenfold. We’ve got subdivisions going out left, right and centre, which is fabulous. It’s exactly what our small community needs. Hopefully it can be something to look at for other communities to say, “Let’s work together. How are you doing it? How can we do the same thing for our municipality as well?”

Mike Moffatt: I think there really is that lack of awareness of best practices, and I think there can be issues around awareness of just how high development charges are.

My home town of London, rates are up about 1,000% from the time when I bought a home in 2004. I think I paid about $4,700, and now it’s close to $50,000. That’s not unusual either. Whitby, Mississauga, Markham, Oakville, they’ve all had their DCs rise by 1,000%, 2000%, 3,000% since the year 2000. You go into places like York Region, and the combined effect is about $200,000, so it’s massive.

If they had simply kept up with inflation, we’d probably be talking about maybe $8,000, $10,000, to $12,000, which is still a lot of money but I don’t think we would’ve been working together on a paper if they’d only risen at the rate of inflation over the last 20 to 25 years.

I know you’ve done some polling on this, but do you think the general public is aware how high development charges are in some cities and how quickly they’ve grown?

Kim Fairley: Honestly, I don’t think that the consumers and the public are educated enough about it. The reality is you go to look for a house and that cost is clumped into the ask price for that property. If DCs are something that a municipality needs, then we’re really just asking them to be transparent about it. Show and educate your consumers, your constituents, what those fees are going towards.

There are definitely communities, especially in the western area, that really rely on the DCs to make that infrastructure. That’s fabulous. But just be open and honest. If consumers are really concerned about it, then they know, “Okay, your DC is $10,000 rounded. This is what we’re spending it on.”

We’re hearing that some communities are collecting these DCs and they’re just not sure what to do with them. Do they use it every year? Maybe they’re saving it for a rainy day in an emergency situation. If that’s the case, then just be open. And maybe this is an opportunity with the announcement of the $8.8 billion that those DCs can go down.

Mike Moffatt: I love that word: transparency. There are seven recommendations in this report, and there’s a bunch of sub-recommendations so we could consider it closer to 20, but if we look at the high level, there’s seven.

My absolute favourite one — and this is something that we’ve worked on at the Missing Middle — is around creating transparency when it comes to development charges. It should be a separate line item on the bill that the homebuyer can see. It should be made exempt from GST, PST, and land transfer tax.

That one is my personal favourite. Do you have a particular favourite when it comes to the recommendations?

Kim Fairley: Honestly, all of them are my favourite because they work so well together. It’s one fluid line in my opinion. Transparency obviously is a great one. The hold-off just works really well, especially with the announcements that just came out. It’s really hard to pick and choose one because they work so well together, and can do so much good for these municipalities, for consumers, our buyers, our first-time homebuyers. It’s hard to pick a favourite one but honestly, they’re all great recommendations. We’re really excited.

Mike Moffatt: We are as well. I like that in the report, we focus on efficiency. It’s not just changing what pocket the money comes out of. You mentioned wastewater earlier.

If you change how you fund or finance a wastewater plant — if you put it on a bond to finance that plan — you’re basically financing at a lower interest rate than what we do now, which is putting it on DCs, and it goes onto residential mortgages and raises the price of homes. You can still have the fee assessed to new homeowners, but you’re paying it at a lower interest rate. That’s what a lot of people miss about this debate. They treat it as zero sum, going, “Well, if I’m paying less, that means that you’re paying more.” But in the report, we focus on the idea that we can create efficiencies in the system that is not just moving money out of one pocket into another.

Kim Fairley: Exactly.

Mike Moffatt: Let’s highlight the work of David Coletto over at Abacus. You guys commissioned some polling data — it’s some really interesting stuff. One of the things that jumped out to me is that 71% of Ontarians agree that development charges make housing less affordable. Do you think the public is on board with reducing DCs? I know they’ve done it temporarily, but could we see this be a permanent thing?

Kim Fairley: Yes. I think the public is more aware of what DCs could actually mean. Before, we talked about the transparency aspect and outlining those, but I think in general, because data is at our fingertips and both the federal and provincial governments are talking about housing and housing affordability, DCs are starting to become a very popular topic of conversation. So yes, I think the public is interested in having those DCs reduced because it helps with the overall concept of affordability in general — not just on housing. We’re talking groceries, bills, expenses in your everyday life, gas — goodness knows what gas is going to get to before the end of this summer, but these are all major concerns that wrap themselves up together.

Mike Moffatt: I feel like the conversation has changed. Five years ago, I used to talk about developments charges and I would have to explain to people what they are. Nowadays, they’re like, “Yeah, we get it, Mike. We might disagree or agree with you but at least we understand what you’re talking about.”

If we go back to the polling, are there any other results you’d like to highlight?

Kim Fairley: The polling pointed out that 2 in 5 Ontarians are really concerned with the cost of DCs being pushed onto homebuyers. It just really ties back to affordability. What is it going to look like?

We’re finding the generation of homebuyers is getting younger, and those younger folks are more concerned.

I’ve got an 18 and a 20-year-old sitting at home, and my 20-year-old says, “Mom, I don’t know if I’m ever going to be able to afford a house.” She’s really concerned and she fits right into that polling. She’s 20, about to be 21. I was 24 when I bought my first house and had no second thought on whether things would be affordable to this degree. It’s a whole new spectrum of folks.

We’re also seeing that it’s not a partisan thing. Before, governments would have certain conversations around election time. But this is a concern across all of our major parties. It’s really a big deal to be talking about it. It’s really an awesome thing to see that all of them are on board to try to make some change. Some really cool information came from that polling.

Mike Moffatt: Absolutely.

Kim Fairley: It’s really cool to see the collaboration these days. It’s a testament to show that these governments as a whole, all the parties, are really looking towards the best interest of the consumers in Ontario, which is a really nice thing.

Mike Moffatt: I think it’s great too. There’s so much conflict going on in the world, so when you have people who don’t always agree but are still working together to get things done, that’s fantastic.

My final question is about thoughts or predictions — policy related or market related. What are you thinking about for the next 6 to 18 months when it comes to housing in Ontario?

Kim Fairley: I think the general consensus will be : are our municipalities taking up that funding to help lower DCs? Is it helping their market improve? Is it helping builders get into the market as well, offering first-time homebuyers options? Not every municipality has that issue. For me, up in the North, we’ve got an influx of subdivisions, so that’s not a major concern, but there are areas where getting these builds done is a huge problem. I’m really hopeful and optimistic that some of these big announcements are really going to move the market forward and just rebalance everything as well when it comes to market and pricing, and bring us back to a steady market rather than an off-kilter one.

Mike Moffatt: I couldn’t agree more. I think that you point you made where there’s still work to be done particularly on development charges, on implementing this, is an important message to leave off on.

We can’t put up the “Mission Accomplished” banner too quickly here. There’s still a lot of hard work.

Thank you so much for being on today. This was a fantastic chat and I’m excited to have somebody on from Northern Ontario because it is a geography we don’t speak about enough, so thank you for sharing your viewpoint on life in the north.

Kim Fairley: Thank you. The opportunity is amazing. Thank you for reaching out and working with us especially on these reports.

Big thank you for asking at least a little bit about the North too. It’s not to take away from our big cities, because there are definitely things that trickle from the big cities down to us, and we see that happen years to months later, so it’s really important to still advocate on their behalf. But I appreciate that you’re putting a little love to the North as well.

Mike Moffatt: Thank you for being here, Kim. And thank you to our audience for watching and listening. Thanks to this episode’s producer, Cara Stern, and our editor, Sean Foreman.

If you have any thoughts or questions about $66 cups of coffee, please send us an email to MissingMiddlePodcast@gmail.com, and we’ll see you next time.

Additional Reading/Listening that Helped Inform the Episode:

How to Lower Development Charges Without Raising Property Taxes

A Pathway to Development Charge Reform

Executive Insight Lead, Ipsos Canada

There is a quiet financial paradox playing out in retirement planning across Canada. Households facing the persistent strain of higher living costs are making a decision that will cost them tens of thousands of dollars over their lifetimes. They are taking their Canada Pension Plan (CPP) benefits early. And in many cases, they understand the trade-off, but make it anyway to put less money in their pockets more quickly.

The math behind CPP deferral is widely understood and compelling. For every month an individual delays collecting CPP beyond age 65, their benefit increases by 0.7% or 8.4% per year. Waiting until age 70 results in a permanent 42% increase in monthly income. Conversely, taking CPP at age 60 reduces benefits by 36%.

From a purely financial perspective, the break-even point, when total lifetime benefits from delaying surpass those from taking early, typically falls around age 82 (generally in the 81–83 range depending on assumptions). That is, Canadians who don’t live until age 82 see more benefit from taking the early payment and penalty. But the average Canadian who reaches age 65 today will live into their mid-to-late 80s. For many, deferral represents one of the clearest value propositions in retirement planning: higher, inflation-protected income that lasts for an increasingly longer life.

There is also a strong expert consensus supporting this view. The National Institute on Aging has emphasized the importance of maximizing secure, indexed lifetime income. Analysis from the Office of the Chief Actuary shows that deferral is financially advantageous for many Canadians, particularly those with longer life expectancies. The Government of Canada has expanded retirement planning tools in recent years, highlighting the benefits of waiting. Financial advisors regularly reinforce the same message in client conversations.

CPP take-up has been slowly shifting to later in life, but most Canadians still claim it by 65, highlighting the gap between financial optimization and financial capacity. Canadians still prefer a smaller amount of guaranteed money now, over a larger amount later. For some Canadians, this makes sense, but for others, it’s the definition of leaving money on the table.

Consider Sandra. She is 60, lives in Oshawa, and spent nearly three decades working as an administrative coordinator before her role was eliminated. She has modest savings, an outstanding mortgage, and limited income coming into the household. After months of searching, the jobs available to her pay significantly less than her previous role. Retraining feels both risky and financially out of reach.

Sandra understands that taking CPP at 60 means locking in a permanently lower benefit. She has seen the numbers. But the numbers do not pay her bills. With immediate financial pressures mounting, she begins collecting CPP because it is necessary now. Sandra can’t afford not to take CPP now, even though it means she could collect more money later.

Now consider David. He is 67, recently retired from a career as a civil engineer, with a defined benefit pension covering his core expenses. His mortgage is paid off. He has substantial registered savings and flexibility in how he draws income. His advisor has walked him through multiple scenarios, all pointing to the same conclusion: delay CPP.

By waiting until 70, David can increase his monthly benefit by as much as 42%, a difference that can approach $500–$700 per month, depending on his contribution history. Over a retirement that extends into his mid-80s, that translates into well over $100,000 in additional lifetime income, fully indexed and guaranteed. David would be wise to take his CPP later, but in many cases, people like David opt to take it sooner anyway. Not because they need the money today, but because of the uncertainty of the current environment and their worries about the future.

Sandra and David illustrate a growing divide in Canadian retirement outcomes. The advice ecosystem is largely calibrated for households like David’s, those with the financial capacity to defer. It is far less applicable to households like Sandra’s, where immediate constraints dominate decision-making.

To be clear, not all Canadians should defer CPP. For individuals with shorter life expectancy, limited savings, or specific income-tested benefit considerations, taking CPP earlier can be entirely rational. But for a large share of the population, the gap between what is financially optimal and what is financially feasible is widening. And the decision is being based not on financial optimization, but on meeting today’s expenses.

Deferral rates do show signs of change. Since the mid-2010s, the share of Canadians waiting until age 70 has increased, reflecting sustained efforts to improve financial literacy and planning. But uptake remains in the single digits, roughly 5% to 8%. Progress has been real, but incremental, and likely concentrated among more financially secure households.

This is where a broader shift in mindset becomes relevant. After years of elevated costs, uneven wage growth, and pressure on savings, many Canadians are operating in what could be described as an “endurance” mode. Financial decision-making is shaped less by long-term optimization and more by the need to navigate persistent constraints. Planning horizons shorten. The certainty of income today outweighs the promise of more income tomorrow.

The CPP deferral strategy assumes the ability to draw on other resources while benefits grow in the background. For some households, like David’s, that bridge exists. For many others, like Sandra’s, it does not.

This is the core of the pension paradox. The guidance is sound. The math is clear. But the ability to act on that guidance is unevenly distributed.

For policymakers, advisors, and financial institutions, the implication is straightforward. Improving retirement outcomes is not only about strengthening advice or increasing awareness. It also requires recognizing the constraints under which many households are operating and designing solutions that account for them.

At Ipsos, we’ve described the Endurance Economy as one defined by chronic financial strain, managed in the short term through policy intervention. For many Canadians, cost pressures are not episodic; they are structural and persistent. Governments have responded by introducing measures such as grocery rebates, targeted income supports, and energy cost relief. These interventions matter, but they are largely absorbed by immediate needs rather than changing long-term financial trajectories.

In the 2026 Spring Economic Update, the Government emphasized the goal of “supporting Canadians who are under pressure from everyday expenses with a boost today and a bridge to a better tomorrow.” The challenge is that for many households, that bridge is not long enough or strong enough to meaningfully alter decision-making.

The Canada Pension Plan is designed to reward patience. Put another way, it is supposed to give people like Sandra and David the same rational choice. But patience requires capacity. For Canadians operating in an endurance mindset, the trade-off is not abstract; it is immediate and binding. The result is entirely rational behaviour in the immediate term that leads to suboptimal long-term outcomes.

If CPP deferral is going to play a larger role in strengthening retirement security, the conversation needs to shift. We need to find ways for people like Sandra to avoid tapping into their CPP early just to survive, and ensure people like David are not tempted to take it early just to avoid uncertainty. These are parallel but related risks.

It is not enough to highlight the benefits of waiting. Policymakers and financial institutions will need to think more explicitly about how to create the conditions that make waiting possible. Without that, the paradox will persist: a system that rewards long-term thinking, in an economy that increasingly makes long-term thinking a luxury.

Michael Colledge is Executive Insight Lead, Ipsos Canada.

The views expressed in this article are those of the author and do not necessarily reflect the views of the Missing Middle Initiative or its affiliates.

MMI accepts guest submissions between 700 and 1200 words; they can be submitted via e-mail to missingmiddleinitiative@gmail.com

In this episode of The Missing Middle, Mike Moffatt and Sabrina Maddeaux break down the growing “brain drain” from Canada to the United States and the shocking proposal that young people who leave should pay a $500,000 exit fee.

They dig into what’s really driving this trend: unaffordable housing, stagnant wages, limited career opportunities, and policy decisions that increasingly favour older, wealthier generations.

This isn’t about loyalty; it’s about survival and a country that may no longer offer young people a path to the life their parents had.

If you enjoy the show and would like to support our work, please consider subscribing to our YouTube channel. The pod is also available on various audio-only platforms, including:

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Below is an AI-generated transcript of the Missing Middle podcast, lightly edited.

Mike Moffatt: Why are young people leaving? It struck me as revealing something bigger about how Canada has come to think about young people—that they’re a group that needs to be punished and controlled rather than actually talking to them and figuring out why they’re making the decisions they do.

Sabrina Maddeaux: It isn’t young Canadians who are abandoning Canada, but Canada that has abandoned them.

Mike Moffatt: So, Sabrina, you wrote a column for the National Post that got a lot of attention. I was really glad you wrote about this because it was something that was bothering me as well.

What was your reaction when you heard that proposal?

Sabrina Maddeaux: Shocked and appalled. Hearing this floated at a federal Liberal convention was stunning and completely absurd to me.

While I want to be clear there’s no indication that this is a serious policy proposal under consideration by the Liberals, it does represent something that’s gone mainstream: this dangerous idea that young people are not a future worth investing in, but a resource to extract from. Trapping all but the wealthiest young people in the country isn’t something you do in a capitalist society or democracy.

Beyond that, that $500,000 figure doesn’t square with reality. Young Canadians are graduating with more debt than ever into a job market where those degrees are worth less, where even people with jobs and good salaries can’t afford rent, let alone save for a home or start a family. Unemployment among young people is at its highest in decades outside of early Covid. These aren’t young people taking half a million dollars of taxpayer subsidies and going to the States because they’re entitled or not loyal to Canada.

Mike Moffatt: I couldn’t agree more. Are we going to start charging for exit visas like they used to do in communist East Germany? I could not believe this idea.

I was appalled by the idea, but let’s move to this question of why young Canadians are moving to the US in the first place. What do you see as attracting them down there?

Sabrina Maddeaux: They don’t see an economic future here. They can’t get jobs, and even if they can, they can’t afford a good quality of life or to start families. They look south and see salaries that are 50% to 100% higher. They see housing that’s hundreds of thousands, if not millions, cheaper and opportunities that no longer exist here. This isn’t opportunism; for many young Canadians, looking south is the only path to the kind of life their parents took for granted.

The irony is, the conditions pushing people out were largely created by policy choices made to protect older generations’ wealth and interests. To suggest that young people have somehow ended up on the advantageous side of an unfair bargain is absolutely crazy. In fact, the exact opposite is true. But politicians are afraid to match rhetoric and policy with this reality because of the large Baby Boomer vote.

I want to put a number on what’s actually happening here. Brain drain is often talked about in vague terms, but economists can measure it. What does it cost Canada when young, educated workers leave, and how do those losses compound over time?

Mike Moffatt: You’re absolutely right about why they’re moving. I taught at a university for 20 years and noticed in the last few years, more of them wanted to go to the US for the sheer cost of living. We can estimate the overall impact.

If a sports team loses its best players to free agency, it’s going to get worse. We see the same thing here. When talented people leave, they take their networks, potential startups, ideas, and kids with them. This affects technology, medicine, and finance. The very people we’re hoping to build an economy with are the ones leaving.

Then there’s this political instinct you describe about governments wanting to apply a “stick.” They want a punitive exit fee rather than asking why young people are leaving. It reveals that Canada has come to think of young people as a group that needs to be punished rather than figuring out why they’re making these decisions.

What do you think that says about where Canada is politically right now?

The political calculus is that seniors vote at higher rates, own more assets, and have more political influence. This naturally shapes what governments protect. Now there’s been a decades-long accumulation of policy decisions—housing restrictions that inflated home values, tax structures that benefit asset holders, and immigration policy that inflated labour supply without building infrastructure—and those decisions have landed hardest on younger generations.

This exit fee proposal is the logical endpoint: rather than fix the conditions driving young people away, let’s punish them for responding rationally to those conditions. Blaming young people for leaving is much easier than confronting the policy failures that made staying so difficult. After this column ran, I got pushback online showing a chart that fewer Canadians are living in the United States today than in decades past. Mike, is brain drain not as serious as I made it out to be, or does that chart not tell the full story?

Mike Moffatt: The chart is factually accurate, but it’s answering a different question. It looks at the percentage of Canadian-born people living in the United States relative to the percentage of Canadian-born people residing in Canada. That number has declined, but the problem is that it looks at where someone was born, not where they’re coming from.

We know a lot of folks living in Canada weren’t born here, so it’s a misleading metric. We should be looking at net emigration from Canada.

What we do know is that 70% of those leaving have at least a university degree, compared to about a third of the general working-age population. Roughly 40% of Canadians who would rank in the top 1% of earners have already emigrated south. Those charts also don’t capture people who come here from abroad, study at our best universities like Waterloo, and then move to Silicon Valley or Austin upon graduation.

Sabrina Maddeaux: Canada ramped up immigration to address talent and labour shortages, but we’re seeing a significant portion of those newcomers leaving. Does that mean the immigration strategy was masking the brain drain problem, or did it make it worse by dampening young people’s employment prospects?

Mike Moffatt: It’s a complex and uncomfortable story. The net emigration numbers include many non-permanent residents and international students who are leaving, and it tends to be the best and brightest. Canada is basically being America’s farm team.

On the entry side, we have a problem with composition. Historically, we had a point-based system to find folks most likely to succeed. Over the last decade and a half, we’ve gone from about 67% of permanent admissions being point-system-based down to 58%. Meanwhile, the number of non-permanent residents has exploded from 67,000 in the year 2000 to well over a million. The skill profile of that temporary workforce has been diminishing; many are students on paper but are really here driving for Uber Eats while hoping for permanent residency.

Sabrina Maddeaux: The last line in my column was that it isn’t young Canadians who are abandoning Canada, but Canada that has abandoned them. It needs to put in the work to earn them back. What would earning them back look like in concrete policy terms?

Mike Moffatt: It starts with housing.

We need homes that are affordable again on both the ownership and rental sides. That includes three-bedroom homes with a yard where people can raise kids. We’ve put in too many restrictions—zoning, land use policies, and development charges. Solving that gets you two-thirds of the way there.

On the income side, we need a level playing field so you’re not competing with workers who have fewer rights. We also need to look at our tax and transfer system. So much money goes to support people who have already earned a lot. We help people living in $3 million homes they bought for $100,000 in 1982, but we aren’t helping those at the start of their careers who have precarious employment, high student debt, and no pension. All our financial support seems to go to folks who did really well in the housing market over the last 30 to 40 years.

Sabrina Maddeaux: The brain drain problem is real. It’s not a question of young people being ungrateful; it’s a value proposition problem and one of economic survival. Canada has to offer young people something worth staying for: affordable housing, viable careers, and a fiscal system that isn’t structured to extract from them to subsidize a generation that is, on average, doing significantly better.

Thank you, everyone, for watching and listening, and to our producer, Meredith Martin, and our editor, Sean Foreman.

Mike Moffatt: If you have any thoughts about moving to New York State at age 23 as I did, please email us at the MissingMiddlePodcast@gmail.com.

Sabrina Maddeaux: And we’ll see you next time.

Additional Reading/Listening that Helped Inform the Episode:

Sabrina’s National Post column: Fix the brain drain by fixing Canada, not with a $500K exit tax | National Post

Statistics Canada — Recent trends in migration flows from Canada to the United States

The Hub — “Can anyone solve Canada’s brain drain problem?”

HRD: Canada’s talent exodus: What senior HR leaders can’t afford to ignore | Human Resources Director

Funded by the Neptis Foundation

Brought to you by the Missing Middle Initiative

Policy Brief: Development Charges

The Issues

• Development charges (DCs) are levied on new residential, commercial, industrial, and institutional building construction to fund new infrastructure.

• DCs are one of an alphabet soup of municipal housing taxes, including community benefit charges (CBCs), parkland dedication and other charges.

• DCs have risen by more than 5,000% in some communities, adding up to $200,000 to the cost of a new home.

• High DCs are an option; many communities have low DCs, while others, such as Sault Ste. Marie, ON have none whatsoever.

• DCs are charged to the developer; these costs get rolled into the final cost of the home, increasing rents and home prices.

• DCs are an expensive and inefficient way of financing infrastructure, adding billions to infrastructure costs. Because DCs are rolled into the price of a home, that infrastructure is ultimately financed at residential mortgage rates rather than at much lower government bond rates.

• DCs are generationally inequitable as they concentrate expenses related to population growth and infrastructure renewal onto young homebuyers and renters.

• DCs contribute to exurban sprawl, as DCs tend to be lower in smaller communities, causing families to “drive until you qualify” to a new home.

• DCs lack transparency because they are hidden on the final bill and invisible to homebuyers.

• Because DCs are embedded in the final price of the home, they are subject to HST and, in some jurisdictions, provincial sales taxes and land-transfer taxes, creating a tax-on-tax effect, so a $1 increase in DCs can raise the final price of a home by more than $1.

• Development charge reform can save billions in unnecessary interest payments while simultaneously creating a fairer, more transparent, and equitable system for financing infrastructure construction.

The Solutions

1. Fund infrastructure through government debt tied to a revenue stream to lower interest costs. Instead of funding a water treatment plant through development charges, have a municipal water service corporation issue debt, which is repaid through a monthly levy on water users. This financing model better aligns the asset with its use, and the levy can be removed once the debt on the asset is repaid. This model can be applied to other assets financed by development charges, such as parking garages. Lifetime interest costs to finance that infrastructure are substantially lowered, as the interest rate on a government bond is substantially lower than that on residential mortgages or construction loans.

2. Implement a transparent direct-to-buyer development charge (DC) billing model that exempts DCs from HST. DCs (and related fees) should be treated like other new-housing purchase-related taxes and paid as a separate line item on the purchase agreement, ensuring new homebuyers know exactly how much they are paying in DCs. Charging at closing would save buyers and builders thousands of dollars in interest costs, and charging as a separate line item would allow governments to exempt development charges from HST, eliminating the development charge tax-on-tax. The home price should include the visible DCs, so the buyer can incorporate them into their mortgage, and the development charge rate should be “locked in” at the time of the purchase agreement, protecting the buyer from future development charge increases.

3. Reduce DCs through eliminating waste in the system and standardizing methodologies across municipalities. This should include eliminating wishlist projects from DC background studies, limiting hidden DC escalation by removing automatic indexing, and standardizing assumptions in DC background studies.

4. Increase coordination between municipal capital works and provincial and federal infrastructure plans. Creating predictable, shared investment in major growth-related infrastructure reduces pressure on municipal DC rates and enables projects to be delivered more efficiently and at lower cost.

5. Finance road and transportation infrastructure through charges more closely tied to transportation use, to lower interest costs and better tie assets to their use. In Ontario, nearly half of all development charges are used for roads, transit, and parking. Interest costs are reduced by financing them through government debt rather than residential mortgages, and a more equitable and direct way to repay that debt is through mechanisms such as fuel taxes, congestion pricing on roads (New York City), road user/vehicle miles travelled taxes (New Zealand, Germany), licence stickers/registration fees and parking fees.

Resources: A Pathway to Development Charge Reform, Ontario’s Development Charge Crisis In 10 Points, Ontario Development Charges: Everything You Wanted to Know But Were Afraid to Ask, Development Charges: 10 Things You Need to Know About Housing Taxes in Ontario.

Mmi Policy Brief Development Charges

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• In a speech on Saturday, the Prime Minister laid out his housing policy priorities, which included some MMI-favourites, such as development charge reductions, and highlighted the importance of “incessant” advocacy.

• We’ll be launching a new feature and a new project this month to make further progress on pro-middle-class policy, including housing.

• We’re hosting our first-ever live event on June 1 in Toronto. We hope to see you there!

A weekend of housing and middle-class economy policy

Think-tanks like the Missing Middle Initiative are a lot of fun, but they do come with their frustrations. One particular frustration is that trying to get governments to enact pro-middle-class reforms can feel like pushing a boulder up a hill, and when successes do happen, there is the attribution problem of connecting changes to anything your organization has done. Because of that, we look for any possible victory we can.

Over the weekend, the annual Global Progress Action Summit was held in Toronto. This year’s event, co-hosted by Canada 2020 and the Centre for American Progress, brought together wonks, political strategists, and politicians from around the world to discuss shared policy challenges.

The Missing Middle’s Founding Director, Mike Moffatt, is a regular attendee of these two-day events. On Friday, Mike moderated a panel featuring colleagues from Spain, Norway, Australia, and the Netherlands to share best practices on both inflation-reduction and housing-supply policies. The day ended with a gala hosted by Canada 2020, with former U.S. President Barack Obama headlining the evening, giving a fireside chat.

Saturday featured a series of speakers, including Pete Buttigieg, former Swedish Prime Minister Magdalena Andersson, and author Jonathan Haidt; the agenda and a full five-hour video are available online.

Prime Minister Mark Carney closed the event. Early in his 25-minute speech, the PM spoke about Canadian housing policy, including Build Canada Homes, and the importance of reducing taxes on home construction, including the HST and development charges. We’ve included the two-minute section on housing policy below, which is worth watching, as they indicate the federal government’s priorities when it comes to housing:

Video 1: May 9, 2026: Prime Minister Mark Carney on Canadian housing policy

The Prime Minister was kind enough to give MMI not just one, but two shout-outs, including our “incessant” discussion of development charges (DCs), in a light-hearted manner. While that word has negative connotations, we wear it with a badge of pride. Over the years, we’ve extensively studied DCs, written dozens of posts and op-eds, hundreds of tweets, made countless media and podcast appearances, and authored or co-authored several reports, including A Pathway to Development Charge Reform on the subject. At MMI, we’re big believers in the maxim “When you're tired of saying it, they're only just starting to hear it.” The biggest mistake think-tanks make is not repeating their message enough; there is no change without repetition.

We’re going to continue to be relentless in our efforts to enhance middle-class policy. When new family-sized homes are twice as expensive today relative to incomes as they were two decades ago, we have no choice but to keep fighting for policies to revive Canada’s urban middle class.

We also received a couple of nice shout-outs from the Finance Minister regarding affordability:

Video 2: May 9, 2026: Finance Minister François-Philippe Champagne on affordability

It is days like that which encourage us to keep pushing the boulder up the hill.

Launching a new feature and a new project

A few times over the weekend, we were asked if we had any “two-pagers” on some of our policy issues and recommendations, from development charges to zoning reform. A two-pager, in Canadian government-speak, is a short two-page briefing report on a particular subject that may include recommendations or possible courses of action.

Our short answer was, “No, but we really should!” So we will. We’ll release our first policy two-pager later this week; expect it to become a regular feature.

We’ll also be announcing a substantial new housing policy-related initiative later this month, in partnership with our Supporting Partners. Watch this space for details!

Come see us live in Toronto!

If you’re a fan of the Missing Middle podcast shows DemograFix and Classonomics (and we certainly hope you are), and you’re in the Toronto area, you’ll want to attend our first-ever live taping! We’re taking the show to the National Club, and inviting a special guest: Ron Butler, of the Angry Mortgage Podcast. We’ll be talking about everything from policy to politics to economics and the decline of the middle class, and taking your questions.

Space is limited, so get your tickets today! As well, we’re planning on taking the show on the road in the fall, so let us know if you’re interested in seeing us in your town.

Get your tickets at Eventbrite.

We hope to see you there!

They dig into how programs like Old Age Security (OAS) and healthcare spending now dominate government budgets, why younger workers are shouldering a growing share of the load, and how housing policy has intensified pressures on Millennials and Gen Z. The result is a quiet but powerful wealth transfer across generations, one that is rarely discussed in full, but increasingly hard to ignore.

If you enjoy the show and would like to support our work, please consider subscribing to our YouTube channel. The pod is also available on various audio-only platforms, including:

Apple Podcasts

Spotify

Podbean

Below is an AI-generated transcript of the Missing Middle podcast, lightly edited.

Cara Stern: It’s a great time to be old in Canada, not so great to be young. Life has gotten very expensive, especially for young people just starting out. But it’s not just housing and salaries that can’t keep up with the cost of living. It’s that even when they have good jobs, they’re being squeezed by high taxes and growing deficits to financially support older Canadians who hold a disproportionate share of both political influence and wealth, widening the gap between generations.

Today, we’re telling the story of how that happened and why policymakers have done nothing to change it.

The demographic changes that have been happening throughout the Western world are not new. Canada, which experienced the largest post-World War II baby boom, has an aging population and all the growing old pains that go with that.

Mike Moffatt: That’s right.

Cara Stern: Of course, the older you are, the more health care services you use. And Canadians are now living, on average, five years longer than they did in the 80s. And this is something to celebrate. But at the same time, we’re living longer and there are fewer working-age citizens to carry the load. In the 1980s, there were about seven working age people for every one elderly person, and now they’re only three and a half. And just to be clear, that means that in the 80s, you had seven people working for every one retirement-age person. And those seven workers earned income, paid taxes that then paid for services like the health care that that one elderly person needed a lot as she grew older. And now you only have three and a half people doing what seven people did in the 80s. That’s not sustainable.

Mike Moffatt: It is sustainable and other countries are doing it. But we should be clear that sustainable is not a synonym for good. This is problematic. It means that working age people are stretched thin, having to support a large share of the population that isn’t working. And tax dollars that in the past would have gone to productive investments are shifted over to supporting those who need it.

You mentioned health care earlier, but another example of this is OAS, Old Age Security, which is a monthly basic income available to citizens and permanent residents of Canada who are 65 plus. And it’s the absolute largest line item in the federal budget.

Cara Stern: I don’t think people realize that. That is huge. It is larger than any other expense. It’s the single largest line item in the federal budget.

Mike Moffatt: And it’s growing over time as the Baby Boomers get older.

Cara Stern: The size of it is why we keep talking about it. People ask me, “Why do you keep talking about old age security? Why won’t you just let old people have the money that they’ve paid into the system? They spend their lives paying into it, directly paying into it, or they’ve paid taxes for decades. And now that they’re older, they need to be able to get something back from Canada.” But first of all, it’s huge. I keep saying, it’s just going to get bigger. This is a big problem that’s coming. But also, they haven’t actually paid for it.

Mike Moffatt: No, they haven’t. OAS comes out of general revenue like most government programs. It’s not a pension you pay into with a dedicated fund like the Canada Pension Plan. It’s government spending. So they didn’t pay into OAS, they paid into the OAS of their parents. And as you mentioned earlier, you had seven workers able to do that for one person.

Now that we have three and a half people per retired person, each working person has to contribute more. So there’s no fiscal way around that unless programs like OAS were to be substantially scaled back. We can and do debt-finance some of those programs. But that’s not a get-out-of-jail free card that just basically pushes those payments down the road. It increases debt interest for both current and future generations.

Cara Stern: Although I can see how someone might get upset because if they paid for their parents to have it, then all of a sudden it’s their turn, and they’re hearing people say, “You know what? We can no longer afford it.” That’s not great.

Mike Moffatt: We should also keep in mind that the program today is far more generous than the one that they so-called paid into in the ’80s and ’90s. So that’s not exactly an apples-to-apples comparison.

Cara Stern: That’s the fiscal picture. Growing spending on older people, which crowds out the spending priorities of young people. And all of this is falling on the shoulders of a shrinking workforce. But here’s where it gets worse, because it’s not just that young people who are being squeezed from the top to pay for seniors’ entitlements, but they’re also being squeezed on the other side with very high housing costs.

And so that’s what we wanted to talk about today. The idea that they’re being squeezed in both directions.

High-cost programs squeeze out the ability for governments to do things like help young people, pay for tuition supports, pay for childcare, anything else, and programs like OAS keep being made more generous over time because it’s quite politically popular. But at the same time, young people are finding their disposable income is just disappearing because the price of housing, both rent and home ownership prices — everything’s rising much faster than their incomes are.

Mike Moffatt: And that would be one thing if the high cost of housing was just an accident of nature. But it wasn’t. We can identify specific policies that make home prices and rents more expensive than they used to be.

So one would be the shifting of municipal infrastructure costs away from property taxes, which are paid for by current residents, to development charges, which are paid for by new residents and young people. We can look at zoning rules that prevent existing neighborhoods from changing from being able to add in additional housing for younger people. We could look at land use restrictions that prevent cities from building out. If you look at the suburbs that were built in the ’60s and ’70s and ’80s, that was those cities getting built out. And we decided as a society, “Hey, stop doing that.” And there are benefits and costs to that, but it does mean that the type of housing on cheap land that was available to Baby Boomers isn’t available to Millennials and Gen Z.

Cara Stern: Why do you think our economy evolved this way? Was it a conscious effort?

Mike Moffatt: I just think there’s a lot of Baby Boomers, so they have a political clout. There’s power in numbers. So naturally they are going to vote for policies that support them.

We often hear a lot that the government built a lot of housing in the 1970s. Why can’t they do that now? Okay, what’s different from the 1970s? And what’s different is that in the 1970s, the Baby Boomers needed housing. And they were the largest voting cohort. Nowadays they don’t. So it’s those kinds of changes in political clout that make a difference. And generations like mine, Gen X sometimes stuff works out for us, sometimes it doesn’t. But we’ve never had that power in numbers to be able to change the system to benefit our cohort specifically.

Cara Stern: It’s not necessarily that they think, “We’ve got what we need and we want to pull up the ladder behind us.” Nor that “We want to keep what we have and make sure our investments are getting bigger.” I don’t think that that’s what people are doing. I mean, some people are jerks, so maybe. But I think in general most people are probably just going, “Okay, this is what the bulk of the population is talking about. This is what’s going to affect most people. And so we need to focus on that right now.” And that’s what politicians will listen to because so many people are talking about it.

Mike Moffatt: Many people are voting for it. I absolutely agree that there’s not this big conspiracy here. And I don’t think that any generation is trying to actively screw the other generations. And I don’t think people think in terms of systems. They think in terms of, “Hey, the waiting time at the hospital is too long. We need to put more money into health care.”

Cara Stern: Or “Hey, we built a lot of houses, and now we are losing a lot of our green fields. Now we need to protect the city limits and make sure we don’t continue expanding it.”

Mike Moffatt: That’s another one where we look at the kind of building in the 60s and 70s and go, “Wow, okay, that used up a lot of land and that increases infrastructure. Let’s not do that anymore.” That’s fine. But there’s no kind of reparations or anything put in place to recognize that those policies have an impact on younger generations and means that housing is going to be more expensive, particularly family-size housing. It’s going to be more expensive and difficult to get.

So you’ve got all of these policy decisions that are made for very good reasons, but we tend not to look at the second order effects. Voters and the general public, we don’t think about all of these actions and systems. We make all these decisions in silos and not look at the big picture as a whole.

Cara Stern: I’m not sure how many people actually understand that because I hear from a lot of people, “Oh, why are you so resentful of Boomers? It’s not Millennials against Boomers. Stop looking at it from a generational warfare perspective.” And I know that there’s nothing intentional about this, but it’s these little things that have happened that altogether stack the system against Millennials. And I say Millennials, but I also mean Gen Z as well, because I always remind myself, as hard as it was for me in my 20s, it’s much harder now if you’re in your 20s.

A lot of people will see it as paid into, and many Boomers do. I speak to a lot of people about this, and I hear across the board that people think people paid into it. They don’t realize how huge it is in our budgets either. Every time I tell someone it’s the biggest line item, they say, “What? Really?” Because it’s shocking. People don’t understand just how big it is.

Mike Moffatt: They don’t. They also don’t understand how the system has evolved over time, that the OAS payments that people get today are a lot more generous than they were 40 or 50 years ago. Health care treatments are a lot better than they were 40 or 50 years ago. And that’s a good thing that has contributed to the increases in life expectancy. But 2026 health care looks a lot different than 1976 health care. I think people tend to forget that.

And when it comes to the overall amount of money that goes into these programs, how lopsided government spending is, it’s not clear to me how Canada could ever change it. The population of people who benefit from the system being like it is, from more and more money going into things like OAS, they’re only growing in numbers, and they already have a disproportionate amount of political clout. They’re the folks who are more likely to vote. They’re more likely to donate to a political party. They’re more likely to write an op ed to the local newspaper or attend a community meeting.

And so I don’t really see how you get around that and how we can rebalance the system just because the people who benefit from the system have a disproportionate amount of political clout.

Cara Stern: If you put Millennials and Gen Z together, would they outnumber Boomers at this point?

Mike Moffatt: They absolutely would. But you’d have to keep in mind that they don’t have a lot of money, which is part of the problem here. They’re working like mad, so they don’t have time to attend community meetings and so on.

But we should also recognize that for a cohort of that population, they’re actually looking to inherit a lot of this wealth. So the interests of Millennials and Gen Z aren’t necessarily aligned within the same generation, because you have some that don’t have a lot of parental support. Maybe they’re newcomers to Canada, and they’re starting on ground zero, whereas others might say, “Housing is expensive, but my folks are going to help me out. And that gives me a leg up and if home prices were going to fall a lot that actually might make my life more difficult.”

So you also get the fact that there are differences in interests within the same generation, which makes that coalescing difficult.

Cara Stern: I’ve always heard people say that if home prices drop to the amount that a lot of people like housing advocates want them to drop to, then we’ll have a giant recession. We’ll have a lot of economic problems in this country, and people are going to lose their jobs. And so what I always hear is, “You won’t be able to afford that home anyways, so you shouldn’t be counting on home prices dropping and you shouldn’t be hoping for it.”

Mike Moffatt: They got the causality backwards. People look at home prices falling in the past and go, “Okay, that happens in bad economic times.” In my mind, that argument is that we shouldn’t start selling more umbrellas because that’s going to cause it to rain. It gets the causality exactly backwards. If homes are cheaper and more plentiful, we are wealthier as a society.

Cara Stern: To sum up, the Baby Boomers have done exceedingly well, and Canada is a great country to be old in right now, but not a great country to be young in right now.

Look at the unemployment rate, look at the cost of living. Millennials and Gen Z are living through a slow growth era without the benefit of home asset appreciation. And Boomers have so much political clout that this is unlikely to change.

I think it comes down to things like getting organized, maybe running for office, talking to your MP or MPP or city councillor. If you can show up to meetings, that would really help, because you have a lot of these public consultations that are really stacked against you because you have people who live in the neighborhood, who have houses, and they don’t want to see change showing up. They have time. A lot of them are retired. And so it’s important that you get organized and find a way to show up and try to make a difference.

But I think that just waiting on this to change is not a good solution, because I don’t think it’s going to happen.

Mike Moffatt: That’s absolutely right. Until younger generations use the fact that there are a lot of you out there and until you develop the strategies to use that power in numbers, you’re going to continue to lose this fight.

Cara Stern: Thank you so much for watching and listening. Our producer is Meredith Martin and our editor is Sean Foreman.

Mike Moffatt: If you have any thoughts or questions about selling umbrellas on a sunny day, please send us an email to missingmiddlepodcast@gmail.com.

Cara Stern: And we’ll see you next time.

Additional Reading/Listening that Helped Inform the Episode:

An Oligarchy of Old People

Are Boomers Bankrupting the Future?

2026 Ontario Budget

Annual Financial Report of the Government of Canada 2024-25

In this episode, Sabrina Maddeaux and Mike Moffatt unpack findings that point not just to rapid growth, but to a deeper enforcement failure. With over 153,000 potentially non-compliant students flagged and minimal follow-up from authorities, the issue is just one of scale; it’s whether the system chose not to act.

They explore how weak oversight, high approval rates in high-risk streams, and a lack of exit tracking have created ripple effects across housing, labour markets, and public trust. The conversation goes beyond the headlines to ask a tougher question: if rules aren’t enforced, what happens to confidence in the system, and what would real accountability actually look like?

If you enjoy the show and would like to support our work, please consider subscribing to our YouTube channel. The pod is also available on various audio-only platforms, including:

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Below is an AI-generated transcript of the Missing Middle podcast, lightly edited.

Sabrina Maddeaux: I’ve been writing about immigration fraud for a while now, but a recent auditor general’s report into Canada’s International student program really put numbers to something I’ve been tracking for a while. The federal government has tried to spin this as opening the floodgates too fast. But, Mike, when you look at the actual findings here, is this really just a case of moving too quickly?

Mike Moffatt: I think the key distinction here is between a capacity problem and an enforcement problem. And the Auditor General’s report makes it very clear that it’s heavily an enforcement problem. The numbers here are staggering. Immigration, Refugees, and Citizenship Canada, the federal agency responsible for enforcing the rules, identified 153,000 potentially non-compliant students. An absolutely staggering number. However, they only funded around 2,000 Investigations a year, which is a drop in the bucket. In over 40% of those investigations, when they contacted the student, they didn’t get a response.

Now, normally, if a government agency like the Canada Revenue Agency or a police department contacts you and you fail to respond, they’re going to escalate the matter. But IRCC chose not to do that. Instead, they simply accepted the Non-response and dropped the matter. Now, there are a number of scandals here, but the AG report identified a big one, that the department chose not to act, even when they had cases in front of it.

Now, Sabrina, you wrote in a column for the National Post that this isn’t just sloppy administration. You call it, and I quote, deliberate and scandalous. That’s a pretty strong language. So what makes you characterize it in that way rather than just saying, oh, it’s a typical bureaucratic failure?

Sabrina Maddeaux: This wasn’t just a few mistakes that slipped through the cracks.

Mike Moffatt: And that 92% figure is absolutely massive. And that raises a question. Did the Auditor General indicate that there are any patterns when it comes to these potentially fraudulent applications?

Sabrina Maddeaux: There are a couple of big ones. So, the department had identified India specifically as a high-risk source of targeted fraud in the Student Direct stream, which is also the stream where they found the most fraud. Yet they maintained a quote-unquote light-touch policy here. So that resulted in approval rates going from 61% to 98% in two years.

We should not be having 98% approval on any immigration stream that shows fraud is getting through and should have raised alarm bells.

The government has since cancelled the SDS stream after the fact, but that still doesn’t account for the people who got through during that time period, or answer for who authorized a near 100% approval rate on a flagged stream.

Mike, you’ve studied how immigration policy intersects with housing and labour markets. What are the downstream economic impacts when you rapidly increase the number of international students in a system without a lot of oversight - to put it mildly?

Mike Moffatt: I would say the core idea behind integrating international student programs in the immigration system is actually quite sound. Because traditionally, new immigrants to Canada come in their late 20s and early 30s after receiving their education elsewhere. So it can often be challenging for them to integrate into the Canadian labour market, as their credentials are not often well recognized by employers. And it can be challenging for them to integrate into Canadian culture and Canadian business culture. So instead of bringing people at that age, we could have young, talented people come over at, say, 18 or 19, get their degree or diploma here, work for a couple of years after graduation, then gain permanent residency. And if we do this correctly, it eliminates the credential problem entirely and it gives newcomers years of experience with Canadian culture before they start their careers.

Sabrina Maddeaux: But that’s not what ended up happening.

Mike Moffatt: To be fair, we did see that some schools live up to the spirit of this. And we should be clear about that. There were some institutions that grew slowly and added international students to very valuable programs. But for others, instead, what we saw is the massive scaling up of programs, many of which had little or no educational value. The incoming students were often misled about what they were coming into, and the program devolved into this temporary shadow, temporary foreign worker program, which suppressed wages in sectors such as retail and hospitality, which are disproportionately staffed by young people.

Sabrina Maddeaux: Some students were certainly misled, but then a lot of those who learned to take advantage of the system and organized crime groups who did as well. But the other big thing is that it created a massive demand for housing.

Mike Moffatt: Absolutely. And to be clear, it was actually very rarely the newcomers who were buying housing. But all of these students needed somewhere to live. So investors started buying up a massive number of single-family homes and renting them out to students.

Now, at some level, that’s not a new thing, as long as there’s been college and university students, you have single-family homes being rented to them. But the scale and scope here were different, and municipalities largely didn’t see it coming. And even when they did, if our population counts are overestimating the number of individuals who are returning to their home countries, it’s going to cause municipalities to underestimate the need for housing and other important services like transit.

Your column connects this to a broader question of trust. You know that fraud in one area is infecting others. You’re someone who covers politics and public institutions. Do you think there’s a real risk that immigration fraud bleeds into broader erosion of civic trust? Or, is that a stretch on my part?

Sabrina Maddeaux: No, not a stretch at all. There’s more than a risk. It’s already happening. It’s already happened. And it will continue to happen if something significant doesn’t change and trust is restored.

Mike Moffatt: So what are the political implications of all this?

Sabrina Maddeaux: When fraud becomes a wedge issue, it tends to produce overcorrections that hurt people who are complying, the legitimate students and workers who did follow every rule. The question isn’t whether Canadians are going to notice this is going on. They already have. The question is whether the government acts in a way that restores confidence or just changes the headline. And if they don’t, you’re also going to have that continued broader disillusionment in the system.

You can even have run-on effects where people think newcomers aren’t here legitimately or they’re involved in fraud or crime. You can even go as far as to see vigilantism rise in the future. So there are some really nasty outcomes down the road if the government doesn’t restore faith and trust in the system.

Mike Moffatt: It’s a big, big problem.

Historically, Canada has lacked exit tracking when crossing a border, though the Canadian government has instituted a number of reforms over the recent years. The lack of a robust system for monitoring and tracking departure confirmations and linking that data to permit expiry does create a substantial vulnerability, which the AG highlights.

Compared to how other countries handle permit expiry, most actually have some form of departure confirmation. So the 40% departure confirmation figure means that the government genuinely doesn’t know the size of the unauthorized population when it comes to international student permit expiries. And the AG’s point that this SDS stream has, I quote: Created new risks for study permit extensions, means that the problem compounds because fraudulent entrants don’t just disappear, they find pathways to stay.

You argue in the piece that the fix has to be retroactive and I’m going to quote you here: Enforcement starts now, isn’t enough.

I would say politically that’s a difficult ask, though, that’s more your area than mine. So what does retroactive accountability actually look like here, and why do you think it’s necessary rather than just moving forward with better systems?

Sabrina Maddeaux: You can’t restore trust in the system if you just say, okay, we’re going to let all these people who are staying here fraudulently and are perhaps even here associated with organized crime groups to just stay. There are public safety risks. There’s also the trust in the system in general and the fact that we don’t have oversight into how many people are here, which has implications for housing.

Also, expired permit holders need to be identified, and those who can’t account for their status should be required to leave within a very reasonable time frame. I’m talking, 30 - 60 days. Without retroactive action like this, the message is that fraud has no consequences. And that’s just a standing invitation for more fraud.

You’re right in that this is politically uncomfortable because it does mean acknowledging the scale of what happened. But the alternative is just letting the integrity problem continue to compound.

Let’s zoom out for a second. The government’s instinct has been to manage this by cutting immigration targets and just leaving it at that. Is that actually the right lever, or does it miss the point of what the AG report found?

Mike Moffatt: I do think it was necessary to scale back on some of these programs, including reducing the permanent residency targets and putting some caps on international students and other programs. But we should be very clear about this: cutting numbers, while it addresses the capacity argument, doesn’t address the enforcement one. If you reduce targets but maintain the same inspection-to-flag-to-case ratio, you really just shrank the pool while leaving the integrity problem intact.

Sabrina Maddeaux: Cuts are only the start. And certainly, if we do want to see higher immigration in the future, once it is more sustainable, enforcement needs to be addressed now.

Thank you, everyone, for watching and listening. And to our producer, Meredith Martin and our editor, Sean Foreman.

Mike Moffatt: If you have any thoughts or questions about being an international student, I’ve been an international student in two different countries, so please send us an email to missingmiddlepodcast@gmail.com.

Sabrina Maddeaux: And we’ll see you next time.

Additional Reading/Listening that Helped Inform the Episode:

Auditor General Report on International Student Program (March 2025)

Sabrina Maddeaux column, National Post

Funded by the Neptis Foundation

Brought to you by the Missing Middle Initiative