In this episode of DemograFix, host Cara Stern sits down with Alex Usher, President of Higher Education Strategy Associates, to unpack how this scandal unfolded, why the province froze funding across all private institutions, and who gets left behind.

They also tackle the broader post-secondary crisis facing young Canadians—from credential inflation and delayed workforce entry to whether a four-year degree is still worth the 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: If you talk to young Canadians, you hear a familiar refrain: “I got the degree, I took on the debt, I did everything right—so why am I still struggling to land a decent-paying job?”

Governments spend billions of dollars funding post-secondary education, yet many graduates are still struggling to get ahead.

In Ontario, hundreds of millions of dollars in OSAP funding have been frozen, and the Ontario Provincial Police have been called in to investigate fraud.

Meanwhile, tuition keeps rising, and many in Gen Z are questioning whether post-secondary education offers the same value it did for previous generations. So how did we get here, and where is all that money going?

To help us unpack it, we’re joined by Alex Usher, President of Higher Education Strategy Associates and author of the annual State of Postsecondary Education in Canada report.

Welcome! Thanks so much for joining us and coming back to the show.

Alex Usher: Hi, Cara.

Cara Stern: I’ve been hearing about how a bunch of students have had their OSAP funding cut because of a scandal at seven career colleges. To start us off, what are career colleges?

Alex Usher: Career colleges are a subset of private institutions. We do have some private universities in this province, places like Yorkville University, International Business University, and the University of Niagara Falls.

But private career colleges tend to offer programs of a year or so in length, sometimes a little longer, and they are very focused on getting people into jobs quickly. Some names you might know from television ads include TriOS College, the Academy of Learning, the Trebis Institute, and a lot of private music schools.

Cara Stern: What is this scandal about?

Alex Usher: Starting about three or four years ago, a number of private career colleges—the exact number differs across reports because some operate as chains, like the Academy of Learning with locations across the province—started enrolling significantly more students.

It’s not entirely clear how it originated, but it appeared to be a scheme involving immigration consultants targeting new Canadians. Often, individuals were told they could receive thousands of dollars just by applying, which itself is illegal since third parties cannot apply for student aid on your behalf.

In student financial aid, the government calculates your need, and the institution takes its tuition cut before any remaining funds go to the student. In many of these cases, the students received no money—the institutions pocketed it.

While students technically received credentials, investigations revealed that some were completing entire program tests in five minutes. These were not real courses.

Initial reports cited figures around $380 million going to these institutions up to 2024–25, but that excludes 2025–26 spending. Government documents from February show an unexplained extra $1 billion in outlays, suggesting the scheme continued into 2025–26. It is a massive amount of money.

Cara Stern: Were the students involved in the scam, or was this driven entirely by the colleges?

Alex Usher: In some cases, the students didn’t even know they were enrolled.

When federal authorities investigated—since the federal government shares student aid costs with Ontario—they found outright fraud. Immigration agents were telling people, “Click this button, and you’ll get money.”

Some individuals clearly were not in on the fraud; the money went straight to the institutions.

Cara Stern: You wrote a blog post pointing out that the province knew as early as late 2024 that there were bad actors in the private college sector.

You inferred that this scandal was used as justification to cut grants to public university students in the most recent provincial budget. Why did the government do that?

Alex Usher: That’s the $64,000 question.

The Association of Career Colleges had been warning them since 2023 about these specific colleges. Instead of cutting off those bad actors to make the system sustainable, the government cut grants for all public students in February. It wasn’t until May or June that they finally restricted funding to those specific private colleges.

Cara Stern: That’s wild. They knew so much money was being wasted, yet they didn’t act on it at the time.

Alex Usher: Not as far as we can tell.

Cara Stern: And now they’ve paused OSAP payments to all private institutions, not just the ones involved in the fraud. Why?

Alex Usher: My theory is that it’s a political distraction.

The last time we talked on your show, we discussed public-private partnerships and how the Ontario government kept pouring gasoline on the fire of international student enrolments. They got out of that situation without too much political damage by pointing fingers and saying, “Privates are bad actors.”

Private higher education doesn’t have a lot of friends in this country, so if you point at privates and say “bad,” people will forgive a lot of other stuff.

The statement the provincial government put out suggests we’re probably looking at March or April at the earliest before this is resolved, meaning companies will not be able to enrol funded students for six months. Larger operations like Yorkville University or the National Ballet School will be fine, but a lot of small mom-and-pop shops are in severe trouble. We’ve already had one in Sudbury announce it is ceasing intake.

Cara Stern: Were these private colleges also receiving funding through the Skills Development Fund?

Alex Usher: Some of them likely were eligible for and receiving those funds as well.

Cara Stern: It's interesting seeing how this government seemed to be trying to push money toward private sector universities and colleges while not funding the public ones, and now they're turning around and saying, "Well, private is bad." It's like, is it bad? Because you guys seemed to like it before.

Alex Usher: Clearly, one of the reasons they were defending these malfeasant colleges initially was precisely because they were private. I also think there could be questions about political donations from the people running these colleges.

Cara Stern: What happens to the students who are in the middle of a program at these places or expected to start? All of a sudden they don’t have any money—what’s happening to them?

Alex Usher: They’re going without and dropping out of school.

Cara Stern: It’s a wild story. They knew all this money was being spent fraudulently, and instead of stopping the bad actors, they just stopped handing out OSAP to all private colleges. That’s horrible for all the people stuck in the middle who are in school trying to get better career prospects, who might not even have the money to pay for it right now.

Are the colleges letting them continue and hoping this gets sorted out, or are they saying, “Sorry, if you can’t pay, you’re out”?

Alex Usher: I don’t think anyone is saying “can’t pay, you’re out” yet, but there are hundreds of career colleges in the province, so different things are happening.

Some places are just saying they aren’t taking new students. The province could have stopped this at any time—they have extensive powers over private colleges and can literally walk in and inspect files at any time. It seems to me they chose not to.

They haven’t gotten rid of everything in FOI. Journalists like Alison Jones at The Canadian Press and Kelly Grant at The Globe and Mail have done fantastic work using FOI and court files.

Since some of these colleges are now suing the province, documents are entering the public record about who knew what and when. We’ll get to the bottom of the story relatively quickly.

Cara Stern: That’s wild. We’ll definitely have you back once we have more answers!

I wanted to ask you about the broader picture, because one thing I hear a lot from young people is whether investing in post-secondary education is going to pay off for them the same way it did for their parents—many of whom are Gen Xers or Boomers. How different is that experience for them in reality?

Alex Usher: It’s pretty similar to Gen X—in some ways, actually better than Gen X. Gen X had a terrible time! Nothing was as good as what the Boomers had, so it just depends on who you’re comparing to.

Cara Stern: It seems like over time the number of credentials you need to do basic jobs has gone up, which leads to credential inflation. Boomers could make a lot of money earlier on in their careers, giving them extra years to spend making money instead of paying for school. Why was it different for Gen X?

Alex Usher: Sixty years ago, when the Boomers were in school, roughly 10% of the population got a university degree. Today, about 40% get a university degree, another 30% get a college credential, plus trades on top of that. So a lot more people hold university credentials now.

Just in this century, the percentage of young adults (ages 25 to 34) who have a master’s degree or above has gone from about 7% to 12%. That reflects some of the credential inflation you’re talking about—people asking, “Why do I need this second degree?” But that’s still a fairly small group (an extra 5%). The biggest increase in time spent in school is simply people moving from no university to a university degree.

Cara Stern: But having so many more people in university programs means that if everyone has a degree, you don’t stand out as much. It creates a difficult job market where, if you don’t have a degree, you’re competing against so many people who do for jobs that probably don’t even need it.

Alex Usher: There are at least two issues there. First, yes, there is credential inflation and increasing professionalization. Sixty years ago, journalism wasn’t a profession that required a degree; even 30 years ago, not everyone needed one. Now it’s practically 100%. Certain types of nursing and dietitians require extra credentials, which is gatekeeping by people inside the profession who want to limit entry.

Salaries dropped temporarily after the “double cohort” in Ontario when we eliminated Grade 13 (OACs) and pushed two classes through at once, but graduate salaries have risen again in the last decade. It varies by field: humanities and science haven’t done as well over the last 10 to 15 years, whereas math, business, and health fields have done very well.

Cara Stern: Do you think it’s still worth getting a post-secondary education if you can afford to do it?

Alex Usher: It always depends on what you’re paying in tuition. At a public university, paying $8,000 in tuition plus $1,500 in fees per year over four years comes out to about $40,000—the cost of a good car—and it will pay off over your lifetime.

What people get upset about these days, particularly as housing costs go up, is that they wish it took less time. It’s not so much the tuition that matters, but the number of years you pay it. We didn’t always have mandatory four-year degrees! In the late 20th century, three-year degrees were the most common in Ontario, and they still are in Manitoba and across Europe. People do three years for a bachelor’s, and only take a fourth year if they want an honours degree. People just want to get their careers started faster and get out of the classroom faster.

Cara Stern: That makes a lot of sense when you think about how many years you spend in school—that’s time you aren’t earning. We’ve been doing a lot of shows about why people are having fewer kids, and one thing I hear is that people don’t feel established in their careers until much later.

When it comes to costs, Boomers always talk about how they used to pay off tuition by working a summer job. Now, you can work all summer and still not cover tuition, and definitely not tuition plus rent.

Alex Usher: That depends on what you’re comparing to. If you compare to 60 years ago, absolutely. People could work on highways or cut down forests in the summer and make enough to pay for school.

One reason was that professors made less, so the cost of providing education was lower. Another reason was that only 10% of people went to university—it’s easy for the government to fund higher education when only 10% go, but much harder when 40% go. We funded that massification by shifting some costs onto students. They still make money over their lifetime, but it takes longer to get started.

Cara Stern: How do we solve this? Should universities stop requiring four-year degrees and go back to three-year degrees? How do we get out of this problem?

Alex Usher: There’s no simple way, because credential gatekeeping kicks in fast. But there are a lot of accreditation agencies in health, engineering, and other fields where we could simply decide we don’t need to keep adding years on.

Does it really need to take eight years to become a doctor? In other countries, it doesn’t. Does a bachelor’s degree need to be four years? In Europe, it’s three.

Cara Stern: That makes me think of teachers in Ontario! I remember when there were too many teachers, so they increased how long teacher’s college takes to two years. Then we had a shortage, so recently I heard they decreased it back down!

Alex Usher: That’s a perfect example—it’s ridiculous!

No degree is an automatic guarantee of a job, and that hasn’t been true since the 1973 oil crisis. Youth and graduate unemployment rates today are pretty close to where they were in 1976.

What’s better now than 20 or 30 years ago is student aid. Tuition was lower back then, but we give out far more non-repayable grants, scholarships, and tax credits now—about three times as much as 25 years ago.

The worst time to be a student was actually 1994 to 1998, with tuition rising, grants being cut, and students graduating into a terrible economy.

Before the recent OSAP cuts, Canada actually gave out more money in non-repayable student aid ($13 billion) than it collected in domestic tuition ($11 billion). We have what I call “net-zero tuition” on a system level. We have a generous system, even if the way we hand out the money is opaque.

Cara Stern: I’m looking forward to having you back once we have more answers about these OSAP cuts. It’s really frustrating to see a government see a problem coming, do nothing about it, and leave students facing all this collateral damage.

Alex Usher: Yeah, and it’s even sadder that there doesn’t appear to be a lot of accountability for it.

Cara Stern: That’s what you’re here for!

Thank you, everyone, for watching and listening. The producer of this episode is Meredith Martin—who, for full disclosure, our guest happens to be dating! And it was edited by Canadian Civil, who our guest is not dating.

If you have any thoughts about how your degree helped you or didn’t, post them in the comments on YouTube. And we’ll see you next time!

Additional Reading/Listening that Helped Inform the Episode:

The Contemptible OSAP Cover-Up

How Doug Ford’s OSAP changes are forcing Ontario students to make a choice: Go deep into debt or drop out

Court records show Ontario’s ‘serious concerns’ about three career colleges

This Ontario career college has suspended classes. Here’s why

$385M in OSAP grants sent to students at 7 career colleges last year, documents show

The State of Post-Secondary Education in Canada, 2026

In this episode of Classonomics, Sabrina Maddeaux and Mike Moffatt break down whether "funflation" is an actual economic crisis or simply a complaint of the modern era. They examine how runaway land costs and condo redevelopment are wiping out accessible third spaces like grassroots music venues and bowling leagues, and why shoebox condos and vanishing backyards effectively killed the casual dinner party. And how the rapid rise of the "alone economy" is fuelling isolation with real social and economic consequences.

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: There’s a name for the rising price of a night out: funflation. Concerts, games, a movie, a drink with friends—it all costs more than it used to. It's easy to file that under first-world problems, but we think it’s a much bigger cost-of-living story than it looks.

Mike Moffatt: When fun gets expensive, people have less of it, and the knock-on effects pile up fast. People see their friends less. They skip the date nights out that keep local businesses alive, and they lose the casual connections that lead to jobs, relationships, and a sense of community.

Sabrina Maddeaux: Younger Canadians who are already handing most of their paychecks to their landlords feel it first. Today we’re digging into funflation, the rise of what some call the alone economy, and what it means for our social lives and the wider economy. Mike, I’d like to set the stage with some Canadian data on what people are doing with their time, how that’s changed over the years, and who they’re spending it with, which is increasingly themselves.

This isn’t something people are choosing to do, really. More than 46% say they don’t spend enough time with their friends and family, up from about a third in the early 1990s. Canadians are feeling more pressed for time than at any point since StatCan started asking. I see this in my personal life as well; certainly over the last decade or 15 years, friends are spending less time together.

When you do see each other, it’s for shorter periods of time. That’s not by choice; it’s influenced by different factors: the cost of a night out and funflation, as we discussed at the start of the episode, but also people moving further away because of housing costs, making it harder to see each other.

It’s harder to coordinate because of bad traffic, construction, and how difficult it is to get around the city. All these things are adding up to people spending less time together and more time alone.

Mike Moffatt: I certainly see it too with people I know in their 20s and early 30s. I look at all the things I used to do in the late ‘90s and early 2000s and all the places I used to go. So many of them are closed now, like Call the Office in London, Ontario, which was one of the best places to see live music.

I think of all of these places I used to go to that are closed, and I haven’t really seen them replaced by much. Even as somebody pushing 50 who doesn’t spend a lot of time hanging out with 20-year-olds, I’ve noticed you don’t see groups of young people hanging out with each other nearly as much as you did in my day.

Sabrina Maddeaux: The places that do exist are increasingly expensive. My husband and I like to say that just leaving the house costs $200 these days. You go to a restaurant, buy two drinks and an appetizer, and all of a sudden you’re at $75, which certainly didn’t use to be the case.

But, Mike, how much of this really comes down to money? Is funflation real, or just a casual way of saying, “I’m broke, and ticket fees are evil”?

Mike Moffatt: It’s absolutely real. This is not just young people complaining - and I know we hear that from boomers and some Gen-Xers - it’s absolutely real.

Second, rents have gone up faster than inflation and faster than income, so your generation doesn’t have the same disposable income my generation did, leaving less left over for fun. Third is the cost of doing those activities: things like tickets and all the fees around them have grown much faster than inflation.

There’s going to be an episode where I tell a lot of stories about being a 20-something Gen-Xer, but back in the early 2000s, the Toronto Blue Jays had a promotion where you could get a ticket to every single home game for a dollar each - 81 games for $81.

We wouldn’t even go to a lot of the games; we just liked having them so we could go on a whim. You’d decide at 4 p.m., “What should we do today? The Jays are playing Texas. Let’s go do that”. Nobody would do that anymore.

That kind of cheap entertainment has really gone away.

Sabrina Maddeaux: That compounds: there’s the ticket price alone, but then you look at the cost of food and drink in a stadium, which has also gone up hugely. You find yourself going to a Jays game - something that used to be incredibly accessible - and now you’re likely spending easily a couple hundred dollars for what should be something you can do easily with friends.

Mike Moffatt: I really don’t want to pick on the Jays here, because Major League Baseball is still one of the most affordable tickets around in pro sports or otherwise. It’s really the big-ticket events where prices have run away. Pollstar tracks the world’s top concert tours, and they reported that the average ticket price for big-name concerts is up about 40% since 2019.

We can certainly say incomes aren’t up 40% since 2019 - that’s double the rate of inflation in Canada. Stadium shows, playoff games, the World Cup- we did an episode on that a few months ago - they’re all luxury goods territory now. The people who can afford them tend to be people like me rather than younger people.

It’s even true for less marquee events like movies. The Competition Bureau went after companies like Cineplex because they’re tacking extra charges onto the advertised price. It’s not just the price of the ticket, but all the junk fees around it.

Again, I’m going to go full Gen-Xer here: back in ‘97, my sister and I went to a Radiohead concert in London, Ontario. Yes, they actually came to London. The tickets were $20, which was real money, but it seemed fairly reasonable at the time. When I bought the tickets for the two of us, there was a service charge of about $1.50. I was outraged by this, thinking, “Oh my God, this is such a rip-off”. Nowadays, those charges are a lot more than that. I didn’t realize how good we had it.

Relative to my generation, on average, young people are spending more in real terms than we did. But you’re getting a lot less because you’re not getting those Radiohead tickets for $20. In the last ten years, that spending is flat. These concerts and sporting events keep going up in price, and while you’re spending the same overall amount in your budget, you’re getting less for it. Your generation really is getting cheated out of the experiences that my generation had.

Sabrina Maddeaux: The data shows that even in the last ten years, average real spending on recreation hasn’t changed that much, but my guess is that average hides a lot. Who’s actually feeling the squeeze here?

Mike Moffatt: Averages are absolutely misleading. I always tell the story about the statistician with one foot in a bucket of ice and one foot in a bucket of boiling water. On average, he was comfortable. It’s the same idea here.

If you’re someone like me who bought a home decades ago when prices were lower, you can absorb these higher entertainment costs because you’re not getting bled dry by rent and mortgage costs. But if you’re in your 20s or 30s and live in a city like Toronto, or even Ottawa, which is relatively less expensive, your rent takes the biggest bite out of your paycheck. Going to concerts is going to be one of the first things that gets cut when you’re trying to pay the bills. Doubly so if you’re single.

Yet I’m constantly reading headlines about Taylor Swift selling out arenas all over the world, which gives the impression that young people can not only afford these high prices, but are often willing to travel to see their favourite shows. That’s an extravagance not many people in my generation would have considered unless they were making bags of money. Make that make sense for us.

Sabrina Maddeaux: A few things are at play. First, because the cost of living has become so high and traditional milestones - like owning a home, starting a family, getting married, or taking a vacation - feel out of reach for younger people, they’re saying, “What the heck, I’m just going to throw money at having fun and having an experience. I can’t afford assets, but at the same time, I’m human and want to spend money in a way that feels good and creates memories”.

They’re spending sometimes more than they should on experiences because they don’t see the point in saving for a home they believe they’ll never be able to afford no matter how much they save. They’re often quite right about that.

These big events are marketed as once-in-a-lifetime moments, and everyone is posting them. Missing out often feels worse than overspending, so it goes on the credit card. We also see new ways to pay beyond credit cards: platforms like Afterpay, where you can put concert tickets, travel, or other experiences on installment plans. But at the end of the day, rent eats so much of the paycheck that “fun money” is the first thing to go. The fun that gets cut is usually the stuff that keeps you connected to friends and family.

I want to pivot to a Bloomberg piece I read recently by Allison Schrager with a great title: “Why Bowl Together When You Can Scroll Alone?” Bowling used to be that classic, cheap, social, middle-class night out.

I remember going to bowling birthday parties growing up and going as a teenager. Even though I don’t know the last time I went, if you go now, they seem to be luxury places that are more like cocktail bars than the bowling alleys of the past. What’s happening here, Mike?

Mike Moffatt: First of all, I love the title of that article. One thing people might not know about me is I absolutely love bowling. It’s a perfect case study here, and I have the credentials to back it up. Fun fact about me: in the 1982–1983 bowling season, I was named Most Valuable Player, Most Improved Player, and Rookie of the Year at Fairmont Lanes in London, Ontario. My parents still have the trophy somewhere in their basement. I should find it and bring it out on an episode.

But bowling has gone into substantial decline since I was terrorizing the lanes of East London. It was very popular in the ‘70s, ‘80s, and ‘90s; nowadays, not so much. Lucky Strike, the biggest bowling company in the US, has lost almost half of its market value in the past year.

For league membership, there were about 10 million people in the 1970s, and now it’s down to about a million - a 90% drop. The Bloomberg article is absolutely correct that we’re seeing this massive decline in activities like bowling.

Sabrina Maddeaux: What happened there?

Mike Moffatt: It’s mostly the same thing that happened to housing: land costs. These are businesses that take up a lot of land and carry a lot of debt. You have to build the lanes, maintain them, and so on, so the business model just doesn’t work as well anymore.

That’s the piece I think gets missed: looking at all the cheap places people used to hang out, whether bowling alleys, rec centers, community halls, or the bar with the pool table, all of that requires a lot of square footage. In many cases, these places have actually been turned into housing.

There was a mini-golf place in the West End of London that I spent way too much time at in high school and took a few dates to. That mini-golf place was sold off to build apartments. I’m not sure if they’re completed yet, but it shows that the housing crisis has bled into these activities.

We’ve really lost the lower-end, more affordable activities.

Sabrina Maddeaux: I want to stay on that because I think it’s the heart of this: How much has runaway real estate pricing driven up the cost of fun and wiped out third spaces where people used to gather?

Mike Moffatt: A lot of it. I would actually say most of it. Take the city of Toronto, for example. Only about 5% of grassroots music venues own their own buildings, according to the city itself. Everyone else is a tenant. Because they’re tenants, they’re exposed to every rent hike, redevelopment offer, and so on.

A lot of those places have turned into housing. The city lost about 30 of these venues in the years before the pandemic. The Phoenix Concert Theatre announced that it was closing to make way for condos, so Toronto now gives live music venues a 50% property tax cut just to keep the lights on.

It looks like it’s helping somewhat, but that can only go so far.

You have this supply-side problem, but you also have a demand-side problem: for younger people, every dollar that goes to rent or a mortgage is a dollar you’re not spending at the bowling alley or going to see live music.

Businesses are getting squeezed at both ends. They have both a supply problem and a demand problem: on the one hand, they’re getting squeezed by costs, and on the other hand, their customers are getting squeezed and have less to spend.

Finally, looking at music venues, a lot of local artists have also been priced out of living in places like Toronto. You can’t get the talent that people want to see, because that talent can’t afford to live in the city. So what do you do for entertainment? A lot of people might say, “If I’m not going to go out, maybe I’ll just have people over, play board games, or what have you”.

That has become really difficult now, too, because we’ve got all these shoebox apartments and condos. Do I really want to have eight people over in a 450-square-foot place? Probably not.

Sabrina Maddeaux: I see that for sure with smaller spaces. Even in my condo, there’s not enough space to have a full dining table. I love hosting; I would love to have people over for dinner parties, but that’s just not going to happen. You can have people over, and they can graze or eat on their laps, but that’s not the same.

You see that throughout the city: the ability to have a dinner party or host a larger group of people is limited. I have a relatively large condo in an older building - it’s a two-bedroom plus den, so I’m very lucky. There are many people who wouldn’t be able to fit the number of people I can in my condo if I want to have people over for appetizers or a couple of drinks.

It’s certainly discouraging people from hosting. I have noticed over the years people hosting less and less. Those who do host tend to be older and own their homes, partly because they have space that can be a designated living room, dining room, or hosting space. When you have people over, it’s not like they’re having drinks and appetizers right next to your wardrobe in the corner. It’s just a completely different atmosphere.

Mike Moffatt: It really is. That’s a good segue to a piece that went viral on social media: Derek Thompson’s article in The Atlantic on why Americans stopped throwing dinner parties. This is not just a Canadian phenomenon, and it’s not just a Sabrina phenomenon. Across North America, the share of Americans who have friends or family over at least once a month has dropped by about 70% since the mid-1970s.

I remember the dinner parties my parents threw with some of that awful ‘70s and ‘80s food, like Jell-O moulds with weird food in them. Maybe we don’t want to totally go back to the past, but, Sabrina, you mentioned throwing dinner parties. When was the last time you hosted one, and could you expand on why we’re not seeing more of it now?

Sabrina Maddeaux: I haven’t hosted a proper dinner party without having the table and the sit-down. Even just having a really small kitchen in a condo, it’s hard to cook for a large group. I’ve had people over, though, and certainly thrown birthday parties where I put out appetizers and drinks, and I love doing that.

I’ve actually read theories that a lot of older people don’t want to downsize because they feel they have to keep the home as the family gathering spot, so the kids can come home, have a bedroom to stay in, and have dinner.

It’s another doom loop where one thing leads into the other with cascading effects. In terms of the piece you mentioned, Thompson’s main explanation was busier dual-earner households, much more time spent on parenting, shrinking friend groups, and the home being so entertaining that nobody needs to invite anyone over anymore.

The reality is there are more options to entertain yourself alone these days. You don’t have to have a real person in your house - you can talk to an AI bot, watch Netflix, or scroll on TikTok, which more and more people are doing. There’s a class angle to it as well.

People are just staying in general, even if they’re not hosting, feeling it’s too expensive to leave the house.

Mike Moffatt: Absolutely. The housing story is a big part of it. You and I are very different people and probably have different expectations when we visit people. I’m more of a backyard barbecue guy, and that’s what we did.

That keeps costs low.

Sabrina Maddeaux: But Mike, there are no backyards, though.

Mike Moffatt: Well, that’s what I was going to get to: there are no backyards for your generation. For my generation, it was really cheap, particularly in the summer, because you’d make a bunch of hot dogs and hamburgers and everybody would bring some cheap beer. It was relatively inexpensive, but that necessitates having a backyard.

Those cheap get-togethers are harder to do now because we don’t have that green space at home. And that’s assuming young people even have a home of their own. In the 2021 census, more than a third of Canadians aged 20 to 34 lived with at least one parent; in the GTA as a whole, it was closer to half.

Not only do you not have a backyard, but you also don’t even have a home of your own, which makes it awkward having to ask mom and dad’s permission to host a dinner party or barbecue. And if you do have a home, it’s often not the kind of place where you can have a barbecue or even have people inside.

All of these factors around housing - the loss of backyards, the shrinking of apartment spaces, the shrinking of balconies - have made it really difficult to entertain.

Sabrina Maddeaux: That leads me to a term that keeps popping up: the alone economy, which refers to businesses built around people doing things by themselves. Is this just giving the market what people want, or is it something sadder?

Mike Moffatt: I think it’s a bit of both. Living alone is now the most common household type in Canada, and a lot of that is just people adapting to a new reality. That gives rise to things like single-serve groceries, solo dining, single-person travel deals, and so on.

A lot of people like living alone, but it does cause a certain level of inefficiency. When my then-girlfriend, now-wife and I moved in together, it was amazing because we went through our stuff and said, “Your coffee maker is nicer than mine, so we’ll keep that one”. We could get nice appliances and things like that because we were splitting the cost two ways, which creates efficiency. If you’re paying for things on your own, that crowds out spending - not just for nice appliances, but for things like cable TV, Wi-Fi, and so on.

By being able to couple up, you end up sharing a lot of costs, which certainly helps your ability to go out. But the economics of the era we’re living in have also caused a distributional issue where you’ve got things on the high end and things on the low end. We really do have a “missing middle.”

Sabrina Maddeaux: It’s the missing middle of fun.

This really matters beyond just what it does to people’s weekends. StatCan found that nearly 1 in 4 Canadians aged 15 to 24 felt lonely always or often in 2021, and my guess is it has probably gotten worse since then. Canada already tracks loneliness as an official quality-of-life indicator, and the UK and Japan both have ministers for it.

There’s a through line to everything we cover on this show: a housing system that squeezes young people, with costs spilling into places you wouldn’t expect, like whether you can afford to see your friends or family.

Thompson ended his piece with a line I keep coming back to: “Not all progress is progress”. We have TikTok and scrolling, and in theory there’s more to do than ever, so we’ve moved forward; but we’ve also moved backward in a lot of ways on that very human front, which is showing up in the social data.

Mike Moffatt: I think so too. I’m glad you said it, because I don’t want to be the old guy saying how much better things were in the past, but this is definitely one area where the situation has gotten worse over the last 20 to 30 years. Let’s see what we can do to bring back the bowling alleys, bring back the live music venues, and make sure that your generation, and the ones younger than you, can go back to having fun.

Sabrina Maddeaux: Thank you, everyone, 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 1980s youth bowling leagues, please send us an email at missingmiddlepodcast@gmail.com.

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

Additional Reading/Listening that Helped Inform the Episode:

NetNewsLedger - Funflation is raising concert, sports and streaming costs for Canadians

Bloomberg Opinion (Allison Schrager) - Why Bowl Together When You Can Scroll Alone? (Lucky Strike, league decline, third places)

The Atlantic (Derek Thompson) - Why Americans Stopped Throwing Dinner Parties (42% to 12% hosting monthly)

Pollstar - 2025 Year-End Business Analysis (average ticket $96.17 in 2019, $132.62 in 2025; stadium average $216.13, up 18.3%)

City of Toronto staff report (July 2026) - grassroots music venues: ~5% own their buildings, ~30 lost 2014 to pandemic, 50% property tax cut

Statistics Canada - Survey of Household Spending, 2023 (recreation $5,231; one-person households and shelter share)

Statistics Canada - Time pressure and time spent with friends over the last 30 years

Canadian Press - Canadians spending less time with friends

Statistics Canada - Canadian Social Survey: Loneliness in Canada (2021)

Asia Times - Asia’s lonely economy of one

Statistics Canada - Loneliness as a Quality of Life Framework indicator

Funded by the Neptis Foundation

Brought to you by the Missing Middle Initiative

In this episode of DemograFix, Cara Stern and Mike Moffatt break down the good, the bad, and the bizarre housing platforms of Ontario’s municipal candidates, why some politicians are proposing policies that throw middle-class homebuyers under the bus to appease older voters, the problem with forcing all new density onto polluted arterial roads, and what an actual, realistic blueprint for solving the housing crisis at the city level should 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:

Apple Podcasts

Spotify

Podbean

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

Cara Stern: It’s almost election day across Ontario. We’re just ten days out. For the past few weeks, I’ve been emailing campaigns with one request: send us your housing platform. We now have documents from many campaigns and offices in nine cities in this province. Some sent specific numbers and timelines, and some sent just a slogan.

Mike Moffatt: Housing is one of the few areas where a mayor has real levers. They have real powers, and you learn a lot from whether a candidate is willing to use those levers and powers, whether they try to blame another level of government, or whether they choose not to say anything of substance at all.

Cara Stern: Today on DemograFix, we’re going through these plans to help you figure out what to look for in a candidate’s plan if you, like me, are a one-issue voter on housing.

Mike Moffatt: I’m a policy nerd, so I spend way too much time scrutinizing candidate platforms, but you’re also into housing and almost equally as nerdy as I am. So when you were going through these platforms that all of these various candidates sent to you, what specifically were you looking for?

Cara Stern: There are kind of three things that I look for when I’m trying to see if their housing policy will help the middle class. First, do they remove barriers to building in neighbourhoods where people actually want to live? Second, does it cut the taxes and fees that add tens of thousands of dollars to a new home to make it cheaper to build? And third, does it shorten the time from proposal to the time that they actually have shovels in the ground?

Mike Moffatt: That’s pretty much my list, too. I mostly want to know whether the plan is grounded in reality and acknowledges that, yes, we need more social housing, but we really need more homes that middle-class families can afford. It’s not just one or the other—it’s both. I also want to know if they’re making expensive promises, and whether they make it clear how they’re going to pay for those promises. The plan should obviously recognize the limits of municipal powers and not make promises that can only be delivered by the federal or provincial government.

Finally, I want the plan to acknowledge that we have a particular shortage when it comes to family-sized homes—that cities shouldn’t just be setting an arbitrary unit target saying, “Okay, we need 10,000 homes,” and then hitting that target by building a bunch of shoebox condo units and nothing else, which we’ve seen in many of our cities.

Cara Stern: I compiled all of the different responses and sent them to you. What was your initial reaction when you saw these platforms?

Mike Moffatt: I’m going to do the ultimate Gen X thing while I wear my Atari shirt and quote something that hasn’t been relevant since 1986: my thought was, “Where’s the beef?”

Cara Stern: I noticed that, too. When some candidates emailed me, I would respond saying, “Hey, just wondering, is there anything for middle-class homebuyers or middle-class families?” Not necessarily just homebuyers, but renters, too. Most people are not aspiring to live in social housing. Despite the lack of content to analyze from some people, there were some proposals worth discussing—some good, some not so good. Let’s start with one that made both of us pretty annoyed.

Mike Moffatt: You selected this just to set me off, so gee, thanks! The first one on our list is from Mississauga candidate Alvin Tedjo. What made me so annoyed is that this is a guy who spearheaded upzoning in Mississauga to allow for fourplexes citywide. Historically, he’s been pretty good on housing, he’s young, and he seems to understand how challenging it is for young families. Yet he proposed an idea—and I’ll have you walk us through it—that is basically about taking resources from those who are already struggling to afford a home and giving those resources to people who are already well-housed.

Cara Stern: His idea caught more attention because it’s frustrating when someone you know understands the issue proposes something that goes against what they claim to believe in. Basically, he proposed a plan that allowed seniors to defer their property taxes if they’ve owned their Mississauga home for at least 20 years, live in it as their primary residence, and don’t own multiple properties. They would keep paying their baseline property tax, but the bill would never go up, and every future increase would be deferred to later. He claims that means young families wouldn’t be subsidizing it because the city still collects the money down the road.

Mike Moffatt: That argument really frustrates me because the city and taxpayers do subsidize it. What the city is essentially doing is giving an interest-free loan to seniors. If the city’s cost of borrowing is, say, 5% or 6%, then every year, every $100 they’re deferring interest-free is costing the city $5 or $6 in interest, and everyone else has to pay for it.

He’s a candidate who understood the need for infill before many others did and understood the need to help people struggling to afford a home, yet he’s throwing them under the bus to appeal to seniors in order to win an election.

What really frustrates me is that we have politicians and municipalities constantly talking in their official plans about how we need seniors to downsize. They say, “We don’t need to build that many single-family homes because all the seniors are going to downsize and young families can move into those homes,” but then they put policies in place to make sure seniors don’t downsize.

Cara Stern: His defence was that this is similar to deferral programs in other cities, which many municipalities have, but I don’t know of any other that has a 20-year tenure requirement. I want to give him the benefit of the doubt, but if you play out the situation: imagine you’re 70 years old, you’ve lived in your home for 25 years, your kids have moved out, and three bedrooms are sitting empty. Every year you stay, your tax bill stays flat and that deferred balance grows. As soon as you sell to downsize, not only do you have to pay that deferred bill, but you also lose the opportunity to defer going forward.

Mike Moffatt: As a parent—and even from my own childhood—I remember that the argument “Mom, the other kids were doing it too!” was never a defence for my bad behaviour. If it’s a bad policy, we shouldn’t be copying what other cities are doing. If seniors want to stay in those homes, it’s their right to, but we shouldn’t be subsidizing it. This is a terrible, terrible idea. He got flamed on social media for it, and I think he was appropriately roasted.

Cara Stern: Okay, let’s move on to something we did like. I liked Brad Bradford’s proposal for removing the Toronto portion of municipal land transfer taxes on the first $1.1 million of a home’s value, and completely eliminating them if the home is under that price. He arrived at that price by looking at the average sale price in 2025. That would apply to people buying principal residences, including first-time buyers, but not to investment properties.

Mike Moffatt: We like this because land transfer taxes discourage people from rightsizing their homes by taxing the act of moving. It should be well understood by now that if you want less of something, you tax it. If you want less smoking, you raise the tax on cigarettes; if you want fewer carbon emissions, you price carbon. If you want people to buy and sell homes less often, you put a tax on home sales, which is essentially what the land transfer tax is.

The City of Toronto is the only municipality in Ontario that has a municipal land transfer tax—I believe it’s the only one allowed to have one—and the city collects an absolute ton of money from it. How does that revenue get replaced, and what spending is reduced to make up for the shortfall? I really don’t get a sense of that.

Cara Stern: He estimates that it will cost around $300 million, and he says he’ll pay for it through his plan to turn Toronto Water into a public utility. He also says he’ll change how big projects are funded, which sounds like taking on long-term debt to pay for capital expenses instead of paying for them out of the current year’s operating budget.

Mike Moffatt: I’m all for municipal service corporations, but none of that really answers the question. Those reforms are really about lowering development charges; they don’t change the operating costs of how a city runs. It feels like a Rube Goldberg device—hugely complex, with stuff moving all over the place, but I don’t get it. If I don’t get it, I don’t know how anybody else is supposed to. That said, I love the high-level idea of limiting the land transfer tax, and finding better ways to pay for infrastructure is also a good thing. I just don’t know how those puzzle pieces fit together.

Cara Stern: Now I want to go to maybe the worst proposal I saw: incumbent mayoral candidate Drew Dilkens in Windsor. He promised that if council puts citywide fourplexes on the table—as many cities in Canada have—he will use his strong-mayor powers to veto it.

Mike Moffatt: Sadly, I’m not surprised, given both the mayor’s and most of Windsor City Council’s longstanding opposition to fourplexes. They famously got into a dispute with the federal government over the Housing Accelerator Fund regarding fourplexes. For what it’s worth, I think sometimes we focus too much on unit counts when there are more important things in rezoning, like harmonization and height limits. I don’t even think we should have arbitrary unit counts, but that’s a discussion for another time.

My big frustration is: okay, you don’t want fourplexes, but what are you going to do?

As a Londoner, it’s my job to pound on Windsor, and I’m playing that role here, but I just don’t get what they’re doing down there.

Cara Stern: I can’t let this one go without pointing out that Doug Ford said strong-mayor powers were supposed to be used to align with provincial policy. When council goes against something that doesn’t align with provincial priorities, mayors can use those powers to veto or override council. So I have to ask: Doug Ford, is keeping density low part of your priorities? I don’t think you’d want to say that. They’re supposed to be for increasing housing supply, not decreasing it. I’d love to see him come out and say something, but I think I’ll be waiting a while for that.

Here’s a response I really liked, though: Jim Lee in Oshawa, who is currently a city councillor. He wrote back to me highlighting what the city can do and what is out of municipal jurisdiction, which is a great start.

One of the things he wants to focus on is as-of-right fourplexes, garden suites, and mid-rises on transit corridors, ending the year-long rezoning and infill fights that kill small projects before they start. He also highlighted how Oshawa currently doesn’t charge development fees if you’re building in their downtown core as part of an effort to incentivize building there. He wants to expand that to rental and missing-middle homes citywide.

He says the money will come from provincial and federal infrastructure funding that rewards these cuts, so the existing tax base wouldn’t have to cover the hole in the budget.

Mike Moffatt: Municipalities have the ability to set development charges at different rates in different parts of the city. Ottawa does this as well: homes built near downtown pay a lower development charge rate than homes out in the suburbs, and you can set different rates for different housing types. All of that is doable, and a lot of it is actually a good idea.

Once again, though, my question is: how are you going to pay for it? I have an idea of what he means—that the money will come from provincial-federal infrastructure deals where cities get funding under a three-year development charge reduction plan—but those deals all have conditions attached on how the money is used. A city or mayor can’t simply do whatever it wants; it has to live up to the agreed-upon terms. I don’t see how that’s the case here. My understanding is that a city can’t just do that, and if it can’t, it would have to lower development charges in some areas and raise them in others. That might be worth doing, but that money isn’t coming from provincial or federal coffers.

Cara Stern: There’s another response I wanted to highlight in Guelph: Ken Yee Chew. He noted that he wanted to improve the approvals process to make guidelines clearer so projects can move faster. A lot of people mentioned approvals timelines, because that seems to be an area with red tape that municipalities can correct without facing a ton of opposition.

One thing I really didn’t like, however, is that he highlighted the need to prioritize density—including infill—along arterial roads, with what he called a more “tailored approach” to established neighbourhoods. That sounds to me like not allowing a lot of multiplexes in quiet residential areas.

I don’t love the idea that if you can’t afford a single-detached house, not only do you need to accept a smaller unit in a multiplex, but you’re forced to live on busy, polluted arterial roads that aren’t as nice for families. A lot of people look for quieter streets where they feel comfortable having their kids play outside.

Mike Moffatt: This really bothers me a lot, and it’s something we see from progressive politicians and urban planners alike. One of the historical arguments for zoning was keeping residential neighbourhoods away from dirty, polluting factories—keeping people away from sources of pollution. Over the last 20 years, we’ve flipped that on its head. We now have a cohort of urban planners who force people to live closest to the sources of pollution, which in modern cities are major traffic arteries.

We’ve gone completely backward. It shows that either we’ve lost the plot on zoning, or zoning was never really about keeping people away from pollution in the first place. Forcing everyone onto arterials isn’t good for kids, either. I couldn’t agree with you more: this focus on putting all density on arterials is regressive as hell, I’m totally against it, and I don’t know why it has so much support.

Cara Stern: Because it helps existing homeowners in quiet neighbourhoods avoid dealing with change, and that’s the political play. I understand why they do it politically, but it’s bad policy.

Guelph has a huge problem: a few years ago, there was a news story about a student’s parent who rented him a parking spot so he could live in a camper van because there were no student rentals available. That situation has improved slightly in Guelph, but the market is still very tight, and it won’t be fully fixed for a while.

Mike Moffatt: Student housing shortages across Southwestern Ontario have been really bad, but particularly in the Guelph and Kitchener-Waterloo-Cambridge area. A lot of that is due to the international student debacle, where hundreds of thousands of students arrived with no new student housing built. It caused massive shortages, vacancies dropped to zero, and rents shot up. They have come down a little bit, but they remain highly elevated. Things are far more challenging than they should be.

It didn’t just affect the student market, either—there has been a large loss of single-family homes as older properties near colleges and universities were bought up by investors and turned into de facto student rentals. It’s a massive problem, and while it has improved in the last couple of years, it’s still not an affordable situation for young students.

Cara Stern: That just shows that refusing to build multiplexes doesn’t mean the population won’t grow; it just means people who move there are forced into worse living conditions.

I keep seeing comments online—especially regarding Alberta forcing cities to downzone—where people say, “Well, we don’t want so many people moving here.” Restricting housing supply has nothing to do with stopping population growth. If people need to live in those areas, they will move there regardless and face overcrowding.

Mike Moffatt: I would also point out that Premier Danielle Smith promised to double Alberta’s population, so they’re talking out of both sides of their mouth over there.

Cara Stern: Let’s pretend for a moment that you have a blank slate to write the housing policy for a big-city mayoral candidate. Give me a few policy points that you would definitely highlight.

Mike Moffatt: First of all, I wouldn’t use the exact same template for every city, even among large cities, because context matters. In Ottawa, development charges are much lower than in Toronto. Ottawa also has the choice to expand outward to build family homes, whereas Toronto really can’t unless we call up the Dutch to figure out how to drain parts of Lake Ontario! So context matters.

Here are the core realities I look for in a candidate’s plan:

• Acknowledge population growth and supply shortages: The plan must recognize that population growth is real and that we have a genuine shortage of homes.

• Recognize housing diversity: Not all homes are created equal. We need a diversity of housing types—high-rise rentals, mid-rises, multiplexes—because we can’t house everyone in a single building type.

• Focus on family-sized housing: The biggest shortage of homes is for young, middle-class families who need three bedrooms, green space, and places for their kids to play.

• Reduce the cost to build: The only way to get prices and rents down to reasonable levels is to make it cheaper to build by lowering taxes on construction, lowering land costs, making efficient use of land, and streamlining approvals processes.

• Support homeownership: We have to recognize that young families want to own a home, and nine times out of ten, they will leave the city to go where they can afford to buy one. We need more rentals, but we can’t ignore the reality that middle-class families aspire to homeownership.

Cara Stern: Those themes apply across most cities. How do you turn that vision into actual municipal policy for a mayoral candidate?

Mike Moffatt: Politicians need to set that vision and describe the problem first, but here are specific policy ideas:

• Revise Official Plans: Commit to updating official plans to reflect actual population growth and explicitly accommodate families with children. Setting these conditions in official plans forces necessary downstream changes, such as rezoning or expanding urban growth boundaries, to house everyone.

• Implement Form-Based Zoning: Adopt form-based zoning for new low-rise neighbourhoods by aligning zoning rules with the building code to make it easier to build factory-built and gentle-density family homes.

• Streamline Approvals: Cut approval times by integrating technology. Cities like Edmonton are using AI—similar to spell-check or Grammarly for planning documents—to identify errors in hours rather than the weeks it takes human reviewers.

• Audit Development Charges: Review development charge plans to ensure cities aren’t collecting money for infrastructure projects that will never actually be built, which unnecessarily drives up home costs.

• Reform DC Rate Structures: Restructure development charges to charge less for small, entry-level starter homes and more for McMansions. It makes no sense that a 1,200-square-foot bungalow pays the exact same dollar amount in development charges as a 12,000-square-foot McMansion.

Cara Stern: I wonder whether good, detailed housing policy can actually win elections, or if politicians need to make broad promises about the kind of city they want, while keeping quiet about the specifics until they’re elected so they don’t set off NIMBY voters.

There are areas where good politics and good policy align. Reforming development charges to lower the price of starter homes is something 80% to 90% of people can agree on. Almost everyone I talk to asks why we can’t build small bungalows like we did in the 1950s and ’60s. A politician can explain that tax policy is part of the problem and offer a clear fix. That kind of policy is popular and faces very little opposition.

Cara Stern: And I guess you get people who then can analyze the specific plans and are able to say, “This is good, this could actually work.” Maybe that helps.

Thank you, everyone, for watching and listening. Our producer is Meredith Martin, and this episode was edited by Canadian Civil.

Mike Moffatt: If you have any thoughts or questions about 1980s Wendy’s commercials, please leave us a comment on YouTube!

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

Additional Reading/Listening that Helped Inform the Episode:

Why Toronto’s Next Council Could Be Decided by Renters

Affordability: Keeping Costs Down for Mississauga Families — Alvin Tedjo

The Priorities — Ken Yee Chew for Mayor of Guelph

Brad Bradford Will Eliminate Toronto’s Land Transfer Tax for the Average Homebuyer

Dilkens Vows to Use Strong-Mayor Powers to Block Fourplex Changes if Re-Elected; Francis Calls It ‘Fear Mongering’

In this episode of Classonomics, Sabrina Maddeaux and Mike Moffatt unpack how Old Age Security actually works, why the idea that seniors have “paid into” the system is misleading, and how generous benefits for retirees contrast with clawbacks to programs like the Canada Child Benefit. They explore how Canada’s approach to supporting seniors can deepen generational inequality, shift the financial burden onto younger workers, and undermine the country’s economic future.

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: There was a federal Conservative campaign sign at an event in Quebec recently ahead of a federal by-election, and it read “plus d’argent pour nos aînés” or “more money for our seniors.” I think whoever printed it assumed English-speaking Canada would never bother to translate it. Today we’re talking about that sign and the two policies sitting behind it.

Mike Moffatt: You wrote a National Post column about this, and there’s a line in that column I keep coming back to. You said that once you know who these seniors actually are, that sign may as well read “more money for the rich.” What did you mean by that?

Sabrina Maddeaux: It might as well, because seniors in Canada are by a vast margin the wealthiest demographic in the entire country. A lot of people still picture the struggling pensioner who’s low-income when they hear “more money for our seniors,” but that’s not who this is aimed at. They want to send money to all seniors, including the vast majority who are doing quite well and sitting on a lot of wealth, in particular asset wealth. That picture in people’s heads is decades out of date. Seniors are now the wealthiest age group in Canada, and senior poverty is very low and declining. We did a great job of fixing that over the last few decades.

The honest version of the sign might as well read, as you said, “more money for the rich, paid for by people with a lot less.”

Mike Moffatt: Absolutely, and the data backs that up. If we look at 2023, which is the latest year we have data for, the median net worth of senior couples is around $1.1 million. For couples that aren’t seniors, it’s half of that.

Or, we could look at the poverty data: children are twice as likely to live in poverty as seniors, and so too are persons with disabilities. Despite all of that, the vast majority of financial transfers from the federal government that go to individuals go to seniors and not other groups.

Generation Squeeze has done some terrific work showing how benefits to seniors are the single biggest expense the federal government has, and it’s growing quite quickly. Old Age Security by itself is about one in six federal dollars, and by the end of the decade, senior benefits are set to grow to over $100 billion in annual spending. So when a party says “let’s add more,” they’re proposing to grow what is already the single largest thing the federal government does.

Sabrina Maddeaux: A lot of people hear Old Age Security and assume it works like a pension - something you paid into over your career and then it grows - but that’s not actually how OAS works. Can you walk us through the mechanics?

Mike Moffatt: So many people don’t seem to understand this.

The money seniors get from OAS is taxed as income, and there is some means-testing, but that means-testing is incredibly generous. A senior couple can have a combined income of nearly $200,000 and collect the full amount, and even at $300,000, they can still collect some OAS - there’s no complete clawback.

Keep in mind, when we talk about an income of $200,000 or $300,000, almost all of that is passive income, not from working. You can have a senior couple where neither of them works; they own a $5 million home and a $2 million cottage outright with no mortgage, and they have an RRSP of $4 million from which they’re pulling $200,000 every year. Despite that net worth of over $10 million, they are still collecting OAS, and in some cases collecting near the full amount. It’s absolutely maddening.

Sabrina Maddeaux: That’s wild. What really got me when I dug into what the Conservatives were proposing is that it’s not just one giveaway; it’s two. They resurfaced the election promise to make the first $34,000 of a senior’s income tax-free, and on top of that, they’re pledging to raise OAS for the 65-to-74 age group. That’s two separate transfers stacked on top of each other. Mike, when you put both of those together, what are we really looking at?

Mike Moffatt: It really does compound and stack together. You have this OAS piece that’s worth billions, but you also have this other piece that interacts with it. That tax-free threshold is money that the government simply never collects, so it doesn’t show up as spending on the government books; it shows up as a hole in revenue. The Parliamentary Budget Office estimated that just the increase in that tax threshold would cost the government roughly $2 billion a year, with those costs going up over time. We’re talking about some serious money here.

Sabrina Maddeaux: What also gets me is how that compares to benefits aimed at younger families who we know are in desperate need. A lot of people aren’t even having families because they feel they can’t afford them. We apparently know how to means-test for young parents and young people, but not seniors.

Mike Moffatt: Absolutely. When you look at something like the Canada Child Benefit, those start to get phased out at under $40,000. That’s one of the reasons why poverty rates for children are so much higher than they are for seniors - it’s because those benefits are clawed back at much lower levels of income.

Sabrina Maddeaux: The Canada Child Benefit uses family income, not individual income, and it starts getting clawed back once family income passes about $37,000 -which, ironically, is just above the amount Conservatives would like to tax-exempt for seniors. A young family starts losing support at $37,000, while a senior couple can earn $182,000 and keep every single dollar of OAS.

Mike Moffatt: Absolutely. Again, you’ve got seniors who can have $5 or $10 million of wealth and can collect, while a child raised by a low- to mid-income family is having some of that money clawed back.

You wrote a column arguing that this whole thing has lost the plot. The part that struck me is that you didn’t just object to the OAS increase, though you certainly did; you said that one of the two Conservative proposals could actually be a good idea. Could you walk me through that?

Sabrina Maddeaux: Just to recap for anyone who missed the top two proposals: the tax-free threshold and the OAS boost. I said that tax-free threshold could actually be a good policy idea; letting people keep more of their paycheck is something we should want, and I do think we’re grossly overtaxed in Canada. The problem is that they’re gatekeeping this to seniors.

If they wanted to make that change for everyone, I’m on board. But if they’re going to carve it out for the wealthiest demographic in the country and fund it off the backs of struggling young workers, that’s going in the wrong direction.

The OAS boost is the one that really sets me off. From an economist’s chair, is it as bad as I think it is, or am I being a little bit unfair here?

Mike Moffatt: I don’t think you’re being unfair at all, because there’s a generational fairness issue at play here. When governments talk about increasing OAS, they’re talking about taking money from young workers who are struggling to buy a home, struggling with a labour market that’s not hiring many people, and struggling with tax brackets that treat someone earning $90,000 while trying to live in Toronto as being wealthy.

Taking money from a group that’s already struggling and giving it to the wealthiest cohort in the country - most of whom got a lot of that wealth by buying a house 40 years ago and sitting on it - seems like compensation in the wrong direction.

Let me pivot away from the economics a little bit. My regular column at the Globe is on economics and personal finance, and yours at the Post is about politics, so I’m going to give you the political question here. I think this promise must poll well, or else parties wouldn’t keep making it. We’ve seen Liberals, Conservatives, and others all run on making OAS and programs like it more generous. Why is transferring money to already comfortable seniors such a reliable political move? Why is nobody willing to touch it from the other direction? It doesn’t seem like even the NDP or Greens, who try to appeal to younger voters, are willing to go there.

Sabrina Maddeaux: The simple answer is seniors vote in large numbers and baby boomers are a huge demographic, and every party knows that. Unfortunately, younger Canadians still vote at lower rates, so the political incentive points one way. Particularly for this by-election in Quebec, it’s a riding that has a large senior demographic.

The fact they printed it in Quebec tells you they knew exactly who the message was for and probably assumed the rest of the country wouldn’t be paying attention.

What makes it worse is the framing: “more money for our seniors” sounds compassionate, but this isn’t going to seniors living in actual poverty. It’s not targeting low-income seniors dealing with real inflation and a soaring cost of living. Instead, it’s going to everyone almost as a vote-buying bribe, no matter how much they already have.

It’s not just a fairness complaint, either. There’s also a real economic cost to running the system this way, and I think that’s the part people miss. I’ve written about how our ultra-low fertility rate is partly a story of young people feeling like they can’t afford the kids they otherwise want. When you keep pulling money out of that generation, you’re not just making them poorer; you’re making a bunch of decisions for them.

So, Mike, from the economic side, where does that show up?

Mike Moffatt: It shows up in a lot of places. Every dollar you take from a younger worker and send to comfortable seniors is a dollar that’s not going into starting a business, buying a first home, or making a bigger family feel possible. If you aggregate that over an entire country, you get a drag on productivity, entrepreneurship, population growth, and long-run growth overall.

Those are the things that determine whether a country gets richer over time: Are we being more productive? Are we able to do new things and grow the economy? These things compound, and if you slow that growth over time, you’re not going to be nearly as well off as you could be. You’re not just moving money around here; if this were just regressive redistribution, that would be bad enough, but it’s also slowing down economic growth, so we’re getting hit twice.

Sabrina Maddeaux: All of this is happening while we’re already deep in the red. It’s not like this is a government with the luxury of sitting on a surplus deciding how to spend it.

Mike Moffatt: Not even close. Soon federal and provincial debt combined is going to be around $3 trillion CAD, and the most recent federal update had a deficit around $67 billion. Our governments are already spending well beyond what they bring in.

We should make a distinction between good debt and bad debt: if we were borrowing to build a transit line or something that makes the economy more productive down the road, that can pay for itself. That’s the kind of debt you want to take on, like what households do when they build a house.

But this is the other kind: purely discretionary spending. It’s like if a family that doesn’t really have the money goes on an expensive vacation and puts it on their credit card.

Again, this is going to the wealthiest cohort in the country and making future generations either pay down that debt or be stuck with ever-increasing interest payments. It’s really not good for the economy, and it’s not a good form of debt.

Sabrina Maddeaux: If the goal was actually to support the seniors who need it without throwing money at the ones who don’t, what would a more sane version of this look like?

Mike Moffatt: We need to start being honest about what these programs are meant to accomplish. OAS and GIS were built to keep seniors out of poverty, which is a really important thing to do and something we should be doing more of. At least initially, they were a real success: senior poverty is low, about half of what it is for other groups.

This isn’t about abandoning seniors; rather, we should focus on fixing a badly calibrated program.

Sabrina Maddeaux: Absolutely. I think that’s the headline here; this isn’t about abandoning seniors or ignoring the fact that there are low-income seniors who need more help. But they need help targeted at them, rather than their tax dollars going to wealthy seniors who don’t need it. We need to make the system fairer for everyone of every age group.

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 bad discretionary spending to put on your credit card, please send us an email at missingmiddlepodcast@gmail.com.

Sabrina Maddeaux: We’ll see you next time.

Additional Reading/Listening that Helped Inform the Episode:

Sabrina Maddeaux column (National Post) — CPC seniors benefits promises

Old Age Security — overview, amounts, and clawback thresholds (Government of Canada)

Why Are Young People Paying for Wealthy Seniors?

Canada Child Benefit — income thresholds and calculation

Parliamentary Budget Officer — fiscal analysis of seniors benefits and OAS projections

Generation Squeeze — generational fairness and intergenerational transfers

Net wealth data

Poverty data

Parliamentary Budget Office costing

Funded by the Neptis Foundation

Brought to you by the Missing Middle Initiative

In this episode of Classonomics, Sabrina Maddeaux and Mike Moffatt break down whether creating brand-new cities can actually solve Canada’s housing affordability crisis, how our metropolitan numbers compare globally, the failed history of planned-city experiments like Ontario's Townsend and Australia's Monarto, and why central planning can't replace the organic economic realities that make cities thrive.

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: If you write about the housing crisis like Sabrina and I do, you’ll often get comments like this one.

Sabrina Maddeaux: Not everybody can live in Toronto, so Canada should create more cities to give young people new places they can afford.

Mike Moffatt: Sometimes it’s from someone who already got their home, but sometimes a version of it even comes from people looking to buy a home for the very first time.

Sabrina Maddeaux: If a home in Toronto and Vancouver is too expensive, why does it feel like the only other choice is to move somewhere without jobs or to spend enormous amounts of our lives commuting? Today on Classonomics, we’ll talk about why it seems impossible for Canada to create a new city, and whether we’d even really want to if we could.

Creating new cities is a nice idea in theory. Toronto wasn’t always this giant metropolitan area. If we did it before, we could do it again. In theory, the people who are trying to get into the housing market at this point could get in early in this new city where homes would presumably be much cheaper. They could invest early, set down their roots, grow families, and not have to deal with the challenges that come with density—buying in an older city with infrastructure that wasn’t originally built with so many people in mind. And let’s be honest, Canada has a lot of space. A lot of it isn’t easy to develop, but there’s no reason why we couldn’t see London, Peterborough, or Kingston become big cities similar to Toronto or Vancouver.

Mike Moffatt: To be clear, everybody should move to London. But when we look at this practically, in my mind it comes down to two questions. First, what do we mean by a city? It turns out that’s not pedantic—that really matters. Secondly, what is the mechanism that people have in mind when they say we should create new cities? Because in a very real sense, we are creating new cities, and Canada always has.

If we go back 25 years to 2001, since then, the City of Toronto’s population has grown by less than 30%, and the City of Montreal by less than 20%. But at the same time, Milton’s population has grown fivefold. It’s gone from 30,000 people to 150,000 people. Brampton has more than doubled in size - it’s added half a million people. Vaughan, Surrey, and Markham have nearly doubled. Kitchener is twice as big as it was in the mid-1990s. Even places like Chestermere, Alberta, which used to have 4,000 people, are soon going to have 40,000. So we are seeing new cities getting created, but they’re doing so in an organic way rather than a planned way.

Sabrina Maddeaux: Right. I really don’t think that’s what people have in mind when they talk about Canada needing more cities. I think what they’re actually picturing is having more metro areas like the GTA. Most of the places you just mentioned, while technically cities, are really just Toronto expanding outward.

Mike Moffatt: Exactly. I do think that is what people have in mind when they say Canada needs more cities.

Now, it certainly feels like the GTA has rapidly grown over the last couple of decades. But if you go back to 2001, it’s actually only the 14th fastest-growing metro out of 41. Vancouver is only 12th, and Montreal is all the way down to 34th out of 41. So if you look at our fastest-growing metros, Calgary and Edmonton are one and two.

You might think, okay, those count as big metros. But if you look at the next four after that, it’s Kelowna, Red Deer, Chilliwack, and Saskatoon. These aren’t big cities; they are not places with NHL teams, or CFL teams for that matter - though I do think the Roughriders claim the entire province of Saskatchewan, not just Regina. But the point remains that these are not places that would be considered big metros, yet they are growing faster than Toronto, Vancouver, and Montreal.

Sabrina Maddeaux: Yeah, that’s really interesting that our existing big metros are falling behind smaller ones on growth, which very much has to do, I would think, with the cost of living - especially housing in these cities. And then you add to that decreased benefits like high unemployment and stagnant wage growth in what are supposed to be the country’s economic centers. So essentially, if you’re choosing to live in these places, you’re getting all of the cons of city life without a lot of the historical pros.

That said, even with all this growth among smaller metros, it still feels like we don’t have that many metros for a country of our size.

Mike Moffatt: It certainly feels that way, but it turns out we’re right where we should be. Canada has six metros that have a million people or more, which are our six metros with NHL teams. We do have a seventh NHL team in Winnipeg, and my apologies to Winnipeg: you don’t make the cut here; you’re not in the million-person club.

Italy and Spain only have five metros with a million people, France has seven, South Korea has eight, and the UK has ten. These are all countries that have larger populations than Canada, but are still in the same ballpark. So it simply isn’t true that Canada has an unusually small number of metros. We’re right where we should be, or even arguably have more than you would expect, given the fact that we are only 40 million people.

Sabrina Maddeaux: Right. All those places are geographically smaller than Canada, though you’d think with our massive size we’d spread out more and have more metros, or that’s what a lot of people say, anyway.

Mike Moffatt: Yeah, and I do think it’s one of the reasons why we have six and not, say, five or four.

It’s hard to compare Canada to a lot of other countries, because there are not that many other countries that have both our size and our population. Canada’s population density is less than five people per square kilometre, and there are only four countries in the world that have more than 10 million people and a population density of under ten, let alone under five.

Two of those countries, Australia and Kazakhstan, have fewer metros than Canada. So we look at those and say we’re not behind them by any stretch of the imagination. If we expanded our criteria to look at every country with a population density under 20, we add five additional countries to our list, and four of them have fewer metros than Canada. The remaining exception is Saudi Arabia, which has seven, to our six. So geographically speaking, big countries with small populations generally don’t have that many metros, and Canada really isn’t an exception.

Sabrina Maddeaux: Part of the problem, though, is obviously that while we’re geographically large, a lot of that square footage is inhospitable and has climates most people don’t want to live in. There are already enough complaints about weather in “southern” Canadian cities like Toronto or, worse, Ottawa. So I’m curious, what other country is the exception to this rule you mentioned?

Mike Moffatt: Well, I’m sure everyone’s guessed by now, but the one exception here is Russia. Russia has 17 metros of over a million people, which is three and a half times as many as Canada. But Russia’s population is also about three and a half times as large as Canada. So it’s scaled that way, though when the Soviet Union broke up, Russia’s population was over five times that of Canada, so we’re growing quite a bit faster than they are.

And I particularly say that to you because Vladimir Putin banned you from visiting Russia, and I have to say, that’s a badge of honour I’m still jealous of! Because of that, and because we want to keep you around, I will say Canada should not emulate Russia.

Sabrina Maddeaux: Definitely not. The solution is by no means rounding up young people and forcing them to migrate to rural areas or northern areas in hopes that cities will magically sprout up around them.

Mike Moffatt: Yeah. When people ask why Canada doesn’t simply create more cities, I often wonder what exactly they’re picturing, because I’m quite certain they don’t mean Stalinist relocations of working people. So I’d love to get more details on what exactly they have in mind.

Sabrina Maddeaux: Yeah, there have got to be other options besides that, though.

Mike Moffatt: There certainly are, and the history of them is not great. The success story of creating new cities that people typically point to is in the United Kingdom. These were initiatives done between the end of World War II and the late 1960s, called New Towns, and there was a whole new towns movement around them.

These were built under some fairly unique circumstances, and the most successful new towns were ones fairly proximate to existing big cities like London. So it’s really not that much different than how Milton is growing so quickly. These new towns were built a little bit more planned and a little bit less organically, but a lot of these new towns were still in the orbit of big cities - they weren’t necessarily creating new metros. Those are your success stories.

But if we look at the research, back in 2002, the UK government studied the effectiveness of these new towns, and they came to the following conclusion:

Those are the same basic criticisms that urbanists make about suburban communities in the 905 around Toronto. So I fail to see the distinction here between what was done in the UK and what Canada has done organically, again with the subtle difference that the UK did it in more of a planned way and we did it in more of an organic way, but we got to the same place.

Sabrina Maddeaux: Has Canada ever tried creating new towns like that?

Mike Moffatt: Yeah, we have. Not all of our initiatives were organic in nature. The most famous example is Don Mills, which is now part of the City of Toronto. It was built as a planned new town in the early 1950s. But again, that’s not creating a metro—it’s creating a suburb of Toronto, part of the GTA.

Now, there are cases of countries or provinces trying to create entire new metros, not just new suburban towns. My favourite example is in the late 1960s, when the province of Ontario developed a plan to create a new manufacturing metro on Lake Erie, just south of Brantford. They called it Townsend, and Townsend was meant to have a population of a quarter of a million people—basically becoming a metro the size of Kelowna or some of the ones we mentioned earlier.

The core idea behind it was that Townsend would attract all of these manufacturing plants, which would attract workers and develop a new metro to take pressure off Toronto. But as it turns out, it didn’t go anywhere because it didn’t make sense for manufacturers to locate there. Townsend wasn’t near supply chains, nor was it near amenities like Highway 401 or Highway 403.

Australia is also famous for such schemes, and most of those ended up in failure as well. Similar to Townsend, the Australians were trying to create a new city called Monarto that was supposed to take population pressure off Adelaide. It was about 80 km away, and they wanted to build a metro that would reach about 200,000 people by the year 2000. Today, it has a population of 203. Not 203,000, but 203 people total.

Sabrina Maddeaux: Minor difference.

Mike Moffatt: Just a little bit of a difference! That’s a failure by any definition. No matter how much slack you’re willing to give government, being off by 100,000% is not good.

My favourite thing is that all this land set aside to be an industrial park and homes is now a zoo - a safari reserve, which I hear is quite nice - but what they basically did was create a place for zebras to live, not people.

If we look at Australia or other places, the only real success stories are places like Canberra, where Australia created a whole city to house their government. So unless the province of Ontario is going to move Queen’s Park to Wawa or something, these plans always end up being a massive waste of tax dollars that end in failure.

Sabrina Maddeaux: All of these initiatives you mentioned are “big government” approaches where the government is trying to get people to move to a specific location of their choosing in a highly centrally planned way. Isn’t there any free-market version of this where, instead of government doing more, it does less through lower taxes or regulations in underpopulated parts of the country?

Mike Moffatt: It’s a fair question, because a lot of this really does show the failures of central planning. Can we achieve the same outcomes through a free-market approach? Obviously, taxes and regulations matter on the margin, and they determine why a tech firm might choose to locate in Silicon Valley or Austin, Texas, or why a manufacturer might locate in South Carolina versus Ohio.

But all of the incentives and deregulation are not going to get a tech firm to move to West Virginia. Like the manufacturers with Townsend, companies need access to supply chains, talent, and infrastructure, which are only located in a handful of places. So it doesn’t make sense for companies to move there, and changing regulations and taxes doesn’t really change that. Frankly, if companies are so mobile that they can do business anywhere on the planet, why would they move to northern Ontario when they could move to Bangladesh or Mexico or somewhere where wages are far below what they would ever be in Canada or the United States?

At the individual level, people already have a massive incentive to move to places like northern Ontario, where housing is five times cheaper than in the GTA. But people, for the most part, aren’t making that move. How much more incentive can there be for people to make that move? It’s a bit of a chicken-and-egg problem: workers need to move somewhere that has work, and companies are going to locate somewhere that has workers. So these schemes don’t really work either.

And it always leads me to ask: if we could reduce these regulatory barriers with no side effects, why wouldn’t we just do that everywhere? If we have a regulation that doesn’t make sense in the GTA, why would we only abolish it for northern Ontario instead of getting rid of it entirely?

Sabrina Maddeaux: To be honest, even if we could create a new city and tell job seekers and priced-out families to move there, the idea strikes me as unfair because it divides the country into haves and have-nots.

But fairness aside, would that even be practical?

Mike Moffatt: You’re right. It’s not only unfair, but it’s also really not practical. The idea that young people can all move to one city while older homeowners remain in existing cities simply doesn’t work. You can’t have all the rich older people living in the City of Toronto, and all the personal support workers and nurses living in Thunder Bay or southeast Saskatchewan. A society simply can’t function that way.

There needs to be room in every single community for people of various wealth and income levels, or else you’re not going to have the workers you need in the healthcare system, the education system, and so on. Every community has to have a diversity of age and income levels. This idea of shipping all the young people off to more remote parts of the country fails to understand why people live where they do and why businesses locate in one place or another.

A lot of these businesses are in specific locations for specific reasons, and you can’t wave that away by government diktat. People are going to locate where it makes sense for them.

Sabrina Maddeaux: For sure. Beyond economic reasons, people choose to live in existing cities because of culture, access to the arts, and all these other things that would take a very long time to build up somewhere else - if they ever could be. So there’s that entire aspect of it as well.

Thank you so much, everyone, for watching and listening, and thanks to our producers, Meredith Martin and Cara Stern, and our editor, Sean Foreman.

Mike Moffatt: And if you have any thoughts or questions about why everybody should move to London, Ontario, please send us an email at missingmiddlepodcast@gmail.com.

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

Additional Reading/Listening that Helped Inform the Episode:

UK New towns

Townsend

Monarto

Funded by the Neptis Foundation

Brought to you by the Missing Middle Initiative

On this episode of DemograFix, Mike Moffatt and Cara Stern explore what research tells us about the relationship between the housing crisis and young people’s political views across North America, Europe, Australia, and New Zealand.

Does declining housing affordability deepen the divide between younger and older voters? Is it pushing young people away from centrist parties, or toward the left or right? And what happens when an entire generation loses faith in its ability to ever own a home?

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 isn’t the only country in the world where younger generations are struggling to buy a home or rent an apartment they can afford, as over the past two decades, many countries have seen rents and home prices rise faster than wages.

Mike Moffatt: It’s true. Over the past 20 years, the home price-to-income ratio—one measure of housing unaffordability—rose by over 30% in Sweden, Australia, Norway, New Zealand, Austria, Switzerland, and a host of other countries. But when it comes to being the worst, Canada was the best, as we had the biggest rise in price-to-income ratios of any high-income country in the world.

Cara Stern: On DemograFix, we’re examining how reduced housing affordability is reshaping the political views of young people across the globe.

Mike Moffatt: Naturally, I worry about what a lack of housing affordability means at the family level—you know, how we’re seeing couples have fewer children, or having to move far away from family and job opportunities in order to find a place to live.

Cara Stern: So the big hope for people choosing to stay here is that other places are going to be bad, too, and so maybe it’s relatively okay to stay here.

Mike Moffatt: Yeah, absolutely. That’s not what we should be counting on to retain our talent—having other countries do poorly. Rather, Canada should be doing well at a societal level beyond this migration. I think my biggest concern is what a lack of housing affordability might be doing to our politics in particular. I’m worried that the housing crisis could lead younger voters to understandably lose faith in the system entirely, or go down some pretty dark roads.

Cara Stern: You’re not the only person concerned about that.

Mike Moffatt: Yeah, and that was a really worrying piece. I’d probably be less concerned about the potential political impacts if we heard politicians talk about this issue more, or if we saw more policy put into place in order to try and help out young people. I also think it’s an issue that academics haven’t studied nearly enough.

Cara Stern: There has to be some research out there, at least, that could maybe link housing affordability issues to changes in political views.

Mike Moffatt: There absolutely is—not as much as I’d like, but it is out there, and what is out there is worth discussing. So let’s do that today. Instead of simply citing a bunch of studies at you, Cara, or at our audience, I think today we’ll try something a little bit different. I’m going to give you six statements related to the intersection of housing and politics in North America, Europe, Australia, and New Zealand. I’d like you to tell me if you think the statement, based on the research, is probably true, probably false, or give the Avril Lavigne answer of “it’s complicated”—and I’ll respond with what the current evidence seems to show.

Cara Stern: Sure, let’s do it! Although, can we start with defining what “young people” means?

Mike Moffatt: Fair question. Most of the research cuts it off at age 35, so voters or non-voters between the ages of 18 and 35. Obviously, different research studies will define things differently, but roughly, that’s what we’re talking about: people in their 20s and early 30s.

Cara Stern: Okay, fair.

Mike Moffatt: First statement: Declining housing affordability is likely increasing the political divide between older and younger voters. Is that probably true, probably false, or it’s complicated?

Cara Stern: I would think that’s probably true because it kind of pits people against each other. You can look at how NIMBYism has played out, and a lot of people see it as the incumbents having prevented newcomers to the market from getting in. Usually, that does have a bit of an age divide just because of the birth lottery of when you were able to be in a position to buy your home.

I’m not sure about the rest of the world, but you don’t seem to get too many places with big parties that say, “We’re going to represent the young people who don’t have a home, and we’re willing to do what it takes even if it sacrifices the equity of people who have one.” So I would guess it’s not strictly by political party, but there is a generational divide.

Mike Moffatt: Well, it turns out in polling data across North America, Australia, and Europe, it seems to be likely true. Polls taken over time in a variety of countries show an increasing political divide between older and younger voters. That divide is based on priorities, with younger voters tending to prioritize a different set of issues—housing being an obvious one—than older generations.

Cara Stern: That makes sense. As wealth inequality has grown, you see middle-class people becoming fairly wealthy on paper—at least because of their home ownership—versus people who don’t have any hope of getting in. That has changed a lot over the last 10 to 15 years, so that makes total sense to me.

Mike Moffatt: Yeah, and you raised an interesting question a moment ago when you said, “How is this necessarily manifesting itself in voting behaviour?” It’s one thing to prioritize different issues, but it’s another thing for parties to cater to those issues. So let’s investigate this in statement two:

Declining housing affordability is likely increasing political polarization among young people and reducing their support for mainstream, centrist parties. Is that probably true, probably false, or it’s complicated?

Cara Stern: I think it’s complicated because you can look at the States where there are a lot of people voting for candidates in the Democratic Party who are democratic socialists, holding positions very much outside the status quo of the party. We saw it here with younger Canadians moving to the right and breaking with status quo ideals on things like immigration.

Mike Moffatt: I would say this one is likely true, though as you point out, geography matters, and it’s also a little bit complicated because sometimes it’s hard to separate what is anti-centrism versus what is anti-incumbency, particularly in countries where centrist parties usually win. But we do see in exit polling data, particularly in Europe, reduced support for centrist parties.

There’s an academic article with a title that I just love called “How to Lose Friends and Alienate People: The Social and Political Consequences of Europe’s Housing Crisis.” The article notes how voters under the age of 35 have largely abandoned centrist parties in Europe. Now that same author has another academic article called Three Inconvenient Truths: How to Stop Housing Radicalizing the Young and Killing the Political Centre. Man, does this guy have a talent for titles, because academic articles usually have really boring titles, but those are fantastic! His third inconvenient truth is that the centre—particularly the centre-right’s most important voter group—tends to be older homeowners without a mortgage. That’s who the party caters to. His inconvenient truth is that those parties need to contribute to ensuring a more sustainable economic model for younger generations, or else they’re not going to be able to attract voters across the political spectrum.

Finally, you’re right that we haven’t seen this play out as much in Canada. I suspect—though there isn’t really great research on it—that it’s more of a Trump-effect rally-around-the-flag effect than anything else, or it could have to do with the electoral system.

Cara Stern: If there are more parties, like in the UK, you see a party like the Reform Party having a chance of actually forming government. If the election were held today, I believe they’re frontrunners or at least neck-and-neck. It’s making parties that were never viable in the past more viable. I am watching their system to see if they change it, given how disproportionate the last election was for them and how different the next one might be depending on which party ends up winning.

Mike Moffatt: I totally agree—something I’ll be watching as well. That’s actually a very nice segue into statement three:

Declining housing affordability is likely causing younger people to increase their support for left-wing parties. Is that probably true, probably false, or it’s complicated?

Cara Stern: I would think this one’s complicated too. Left-wing parties tend to push for more social safety nets, which more people need as wealth inequality grows, so you’d think it would push people to the left. But what we’re seeing more of is an anti-incumbency effect.

It took an outsider to pull the party back to the centre to keep them from losing here. So even though the incumbent won, it’s a party with very different priorities than the last one. In other countries, we saw the opposite: if their incumbents were to the right, it moved people against whatever the status quo was in their own country for the most part.

Mike Moffatt: I would put this one under “it’s complicated” as well. A 2021 article in the journal Economy and Space makes it clear that while the housing crisis increases radicalization of younger voters, there doesn’t seem to be any predetermined pattern to which direction people will become more radicalized, particularly at the population level. Sometimes that disproportionately helps parties more on the left, but other times, it helps parties more on the right. In a number of countries, including Portugal, Belgium, and Finland, parties on the far right of the political spectrum out-poll every other party, particularly among men under the age of 35.

In that piece “How to Lose Friends and Alienate People…” that I cited earlier, it quotes one Dutch voter who says, “I’m really not racist, but...” Whenever a sentence starts that way, it’s never going to end well! But he says, “I’m really not racist, but when it comes to my own country, I think I should get priority access to a house.”

Cara Stern: That’s the kind of thing that a few years ago people would look at and say, “That’s racist.” The culture has changed so much that a lot of people would hear that now and go, “Yeah, maybe that’s reasonable.”

Mike Moffatt: The data bears that out—that has become a more accepted political view. It’s not necessarily the case that a housing crisis turns young voters more left-wing; sometimes it does, sometimes it doesn’t. In part, it really is determined by political actors and which politician can capture the imagination of young voters, rather than an ideological shift.

Cara Stern: Okay, that makes a lot of sense.

Mike Moffatt: Let’s pivot to statement four:

Declining housing affordability is likely causing younger people’s political preferences to be more polarized along economic lines, as affordability issues hit well-off young people differently than less well-off young people. Is that probably true, probably false, or it’s complicated?

Cara Stern: I would say that’s probably true—maybe complicated. In Canada at least, I think that has been true in the last few years, although things like tariffs and Trump’s childish threats to Canada have united people as Canadians in supporting the government, so you see less of a political divide.

My guess would be you’re seeing a split in the younger generation more than in the past few decades, where wealth plays a role as much as or more than age does. The degree to which it plays a role has grown.

Mike Moffatt: The research bears that out, so I would put this under “probably true.” We could say complicated because the research isn’t as robust as we’d like it to be, but there is interesting research out of the UK showing a divide between younger voters. For those who have access to inherited wealth—parents who can help them with a down payment or give them a home—or who have a high income relative to their cost of living and are able to purchase a home, they’re going to have more mainstream political views. They’re not going to want to burn down the system because the system is still working for them, and they don’t necessarily want to see radical changes.

It’s those who have been left behind who want to burn down the system. This is where some of the left-right divide comes in.

In essence, there is a divide between the “haves” and “have-nots” when it comes to younger people, and those “have-nots” can be split between supporting left-wing solutions and right-wing solutions.

Cara Stern: Even the people on the right who are looking for supply-side solutions would probably still rather have an economic system that works than one where they have to get help from their parents. But if they see a path forward, they can say, “Okay, well, at least it might work for me, and maybe if we can fix things we can get it back to that”—versus the people who are completely hopeless, have no hope left of being able to own a home, and want to see a lot more redistribution. That makes sense.

Mike Moffatt: A lot of it has to do with identity. You have folks who say, “I’m a forever renter”—sometimes by choice, sometimes by circumstance. That creates different support for a set of policies than for folks who see themselves as potential buyers.

Let’s pivot to statement five:

Declining housing affordability is causing young people to be more disenchanted and disenfranchised from the political system than they were a decade ago. Is that probably true, probably false, or it’s complicated?

Cara Stern: I would say that’s true. In Canada, none of our main parties seem to really want to burn the system down—they’re all variations on the status quo. When you’re locked out entirely, it seems like there’s no one going to bat for you, so it’s very easy to disengage. Voter turnout in Canada has dropped with pretty much every election in the past decade, though I don’t know if that’s entirely because of housing affordability. But we can see turnout has dropped elsewhere too—the UK, for example, had an election with its lowest turnout in the past century.

Mike Moffatt: Current research shows that it’s probably true that there is less engagement. But there’s a really important distinction to make between being less likely to vote and being less politically engaged, because a lot of the engagement we’re seeing from young people takes on different forms than voting. That makes sense: if you believe the system is rigged against you, participating in that system feels like a waste of time, but you might still try to effect change in other ways—through social media, getting like-minded groups together, and so on. So we can’t completely infer disengagement from politics just from disengagement from voting.

Cara Stern: We’ve seen a lot of young people get involved in movements asking for political change. It’s too bad a lot of people feel like it’s not worth showing up to vote, but I can understand how they get there, and I’m glad there are alternative outlets for them to get involved politically, even though voting is still important.

Mike Moffatt: That takes us to our last statement, statement six:

Declining housing affordability has reduced the desire for young people to own a home. Is that probably true, probably false, or it’s complicated?

Cara Stern: That one rings very false to me. I don’t think there’s a decreased desire; I think there are decreased expectations.

Mike Moffatt: This one is probably false. Poll after poll across countries shows there’s been no meaningful drop in people’s desire to own a home over the last 10 or 20 years.

Both you and I are parents, and we see that with our own kids! If anything, the more you can’t have something, the more you want it. I’ve done that with my kids where I’ll say, “This vegetable is only for grown-ups,” and they’ll say, “No, no, no, I want to try the broccoli!” It’s a little Jedi mind trick parents use because human nature dictates that the more an option is denied to you, the more attractive it looks. Being denied that option breeds resentment.

In my view, politicians are playing with fire if they think younger people will simply get used to the idea that they’ll never have an opportunity to purchase a home, so long as we make renting a pleasant enough experience. To be clear, renting should be a pleasant experience! Renting is a fantastic option and the best choice for a lot of people. You should have a diversity of options to choose from, and right now we are seeing that younger people still want the option to buy a home, but are often denied that option.

Cara Stern: Oh man, I’m worried politicians will listen to this and think, “Oh, the solution to the housing crisis is reverse psychology! Just convince people it’s something they want, do the same thing we do with kids and broccoli—it’ll work great!” I hope that’s not the takeaway from this episode.

Thank you so much for watching and listening. Our producer is Meredith Martin, and this episode was edited by Canadian Civil.

Mike Moffatt: And if you have any thoughts or questions about Jedi mind tricks you can use on your children, please leave a comment in our YouTube comments section.

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

Additional Reading/Listening that Helped Inform the Episode:

The Dangerous Disillusionment of Young Canadians

How to lose friends and alienate people: The social and political consequences of Europe’s housing crisis

Three inconvenient truths: How to stop housing radicalising the young and killing the political centre

Economy and Space piece

What drives support for largescale housing reform?

In this episode of Classonomics, Sabrina Maddeaux and Mike Moffatt examine how Canada’s outdated Employment Insurance model leaves young professionals and gig workers behind during record spikes in youth unemployment. They explore why current rules penalize urban renters, how maximum benefits fall short of basic living costs, and what practical policy reforms could fix the system for the modern workforce.

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: There’s a line on your pay stub called EI. You’ve probably been paying into it since your first summer job, and you’ve probably never thought too hard about it, because the entire point of insurance is that you get to ignore it until the day you really need it. Today, we’re talking about what happens when a whole generation goes to make that claim and finds out the policy doesn’t cover them, especially during a historic unemployment spike.

Canada’s employment insurance system was built for a way of working that has largely stopped existing, and the people falling through the cracks in this policy are overwhelmingly young.

Mike, before we get into who EI misses, give us a quick history. When was this thing actually built, and what did the labour market look like when it was designed?

Mike Moffatt: This is a time for one of “Professor Mike’s” famous history lessons, but I promise I’m going to keep this short.

Canada got its first national unemployment insurance all the way back in 1940. There was a big rebuild of the program in 1996. That’s when it switched its name from unemployment insurance to employment insurance, and it switched from counting weeks of work to counting hours of work.

EI was built under the assumptions of long job tenures, full-time work as the default, layoffs arriving in waves from factories and resource towns [when there was] a clean line between who was an employee and who was a business owner. The system never really worked well for everyone.

Back in the 1990s, I had a series of summer jobs. I was paying into EI all the time, and I was never eligible to collect, and that really bothered me at the time. I could understand why young people would be upset. But nowadays we have an economy that has a lot more gig work, a lot more blurred lines between who’s an employee and who’s an independent contractor. It’s made all of these gaps even worse.

Sabrina Maddeaux: Walk me through the mechanics then. If I were to lose my job tomorrow, what actually determines whether I qualify?

Mike Moffatt: Like most things in government, it’s actually more complicated than it should be.

The first thing is, it depends on the local unemployment rate in your region. In an odd but real way, it’s determined by your postal code - where you live. The higher the unemployment rate in a region, the fewer hours you need to qualify.

The range of hours is somewhere between 420 and 700 hours. If you clear that bar and are eligible, you get about 55% of your average insurable weekly earnings, capped at $729 a week, with that amount changing from year to year. How many weeks of coverage you get will also run off of your hours and your regional rate, anywhere from 14 to 45 weeks of coverage.

Sabrina Maddeaux: Right. That seems pretty unfair, but that regional map was drawn around seasonal and resource economies. A young worker in Toronto or Calgary is on the wrong side of that line now. That was never drawn with them in mind at all. Now the cities with the entry-level jobs are also the cities with the highest rents, and they’re also the ones where you need the most hours to qualify.

That’s the double whammy. Every dial seems to be set against that same young professional, and nobody picks their region. There’s no way to plan around it. Most people only find out while they’re on the phone with Service Canada, which is the worst possible moment to find out that you don’t qualify.

That regional design did make sense when unemployment showed up as a regional problem. What we have right now is a national crisis concentrated by age rather than geography. So let me put a number on it: in a given year, of everybody who is unemployed in Canada, how many actually end up collecting regular EI?

Mike Moffatt: It ends up being fewer than most people assume.

StatCan surveys this every year; the latest data is from 2024. Back then, an average of 1.4 million Canadians were unemployed at some point in the year. Once you filter in who paid into the EI system, who had a valid job separation, who had enough hours, and so on, only about half of those folks were actually eligible for regular benefits.

The split by job type is a tell - over 90% of workers who lost a full-time job were eligible for EI, but for part-time workers, it was just over 40%. That situation I described as a student in the 1990s- about young workers paying into the EI system but being ineligible to collect - is pretty common because those are your part-time workers, with roughly half of young workers aged 15 to 24 being ineligible to collect anything.

Sabrina, you’ve been writing about this job market for a while. If you take those numbers that I quoted and couple them with a youth unemployment rate that last year was above 14%, what does that mix look like?

Sabrina Maddeaux: The dominant framing is still that young people aren’t trying hard enough. Meanwhile, that insurance program has quietly written them out of the policy entirely. Stacking those two numbers you gave us, fewer than half of unemployed young people had paid in at all, and of the ones who did, only half cleared the hours bar.

The share of unemployed young Canadians who can actually collect regular EI lands somewhere around 1 in 5, which is dismal. You add the timing on top of that, which is the real insult: youth eligibility has fallen two years running at the same moment youth unemployment climbed to its highest level since 2010 outside of the pandemic years. That net has loosened as more people started falling.

That’s caused a lot of pain, and it’s nowhere in our public policy conversation. This one’s visible to people who get hurt by it in a way that a lot of policy failures aren’t. It’s a line item on every pay stub. People can see exactly what they paid, and when they don’t qualify, it just adds insult to injury.

There’s a whole other group that gets missed even more completely. Where do gig workers and contractors sit in all of this?

Mike Moffatt: As we said from the outset, this system was not designed for them, but it is something that the government is aware of. It’s kind of bolted on this side EI onto main EI, where self-employed workers can opt in, but only for special benefits: maternity, parental, sickness, caregiving, that kind of thing.

Regular benefits for lost work are just unavailable at any price. We’re talking about 3 million self-employed workers across Canada. It’s a massive population, and about a quarter of those 3 million would be considered in the gig economy. Gig economy workers obviously skew much younger than the rest of the population. What that means is that EI doesn’t work nearly as well for the young as it does for the old.

Sabrina Maddeaux: There’s a whole other layer on top of that where it’s even old school to say there’s a divide between full-time employed workers and gig workers. Now you have a lot of young people who might have that full-time job, but a good third of their income comes from having that second gig job or extra contracts, and there’s no coverage if they lose that part of their income.

There’s a version of this that’s even more common right now that I think is even worse. Let’s say you get laid off, and it takes you six months to find full-time work. You get hired, but three months into that new job, it ends, and you get laid off.

You rack up about 500 insurable hours on that job, which isn’t enough for you to qualify in much of the country, so you’re not going to be getting EI, and you’re now out of luck. You’re staring down another search that will probably run six months with no floor underneath it all.

You’re penalized if you take that job for three months if it’s a little bit rickety; you might have been better off just staying on EI. The program effectively penalizes you for how long your last job search took, which is the one variable you have the least control over, and disincentivizes you from taking another job unless that job looks very secure.

Sabrina Maddeaux: That’s wild, especially in an economy where layoffs are so unpredictable right now. It’s a very real scenario that people can find another job, and then that job disappears very quickly.

We know that job searches in general are taking longer and longer these days. It’s not just the unemployment rate for young people that’s gone up; it’s the long-term unemployment rate - unemployment for longer than six months for young people - that’s also risen really quickly.

Then there’s the other end of it: say you do actually qualify, what happens when the benefits simply run out, but maybe you’re still looking because of that longer-term unemployment?

Mike Moffatt: That’s a real problem because those regular benefits run from about 14 to 45 weeks depending on several factors. Given the state of the economy, particularly for young people, it can take longer than that to find a job. In the last year, we have data that about a third of claimants used up their entire entitlement before finding work.

They’re basically running out the clock and then receiving nothing. Right now, about a quarter of unemployed Canadians have been looking for work for at least 27 weeks, which is up substantially from a couple of years ago. But there haven’t been any changes to EI in recent years to reflect that it’s taking longer for people to find work than it used to.

Sabrina Maddeaux: Which brings me to the tariff response, because Ottawa did move on some EI patches, and they moved fast. But every one of those measures looks like it’s aimed at a mass layoff from a factory that’s about to happen. Could you walk me through what those measures were? And what about the people who are already out?

Mike Moffatt: There have been some additional measures, and they are real. That one-week unpaid waiting period has been waived because of the trade war, so that certainly helps. Severance stopped being deducted, so you can collect while holding on to your package, so that’s good. Regional rates were bumped up a point on paper, which lowers the number of hours you need.

All of those are good things, but they’re all marginal. A big headline piece basically dominated all of those: they added up to 20 extra weeks of EI collection for so-called long-tenured workers. To qualify, you have to have paid at least 30% of the maximum annual premium in seven of the last ten years, and you have to have collected fewer than 36 weeks of regular benefits in the last three.

Ottawa ran two full rounds of EI modernization consultations back in 2021–2022 looking at the issues that gig workers and others have. Both of those reports were published, but then there were no major restructurings that followed. We got another round of temporary measures that were designed more for older, stable workers and not for younger gig workers.

I feel a little embarrassed because I’m telling Sabrina things she already knows and, in fact, knows better than I do. I would love you to walk me through the actual politics of this. Why do we keep seeing these quick patches instead of serious reform?

Sabrina Maddeaux: Patches that seem to always favour older voters rather than younger ones. Shocking these days, right? But a patch is cheap, and a rebuild is a fight, and that’s what it comes down to. Temporary measures get announced at a podium, get some nice headlines, and then expire on their own, and nobody has to defend them at the next election.

Rewriting the entrance rules means picking a fight with every region and industry that does well under the current formula. Also, a fight between demographics, especially those older voters who still have a very hard time understanding the realities facing younger workers these days, both in terms of the employment situation and cost of living. Of course, there’s still that stigma that persists that if you’re unemployed, you’re just not looking hard enough and it’s your fault, even though that’s really not the reality at all, especially these days in this current economy.

The books make it worse. The EI operating account was carrying a deficit of about $17.2 billion at the end of 2025, and premiums are set specifically to work that off by 2032. The default setting of the whole system is actually set against widening access.

Then the pattern repeats: CERB, wildfire pilots, tariff measures. Every crisis gets its own temporary workaround, and each one is another piece of evidence that the permanent program can’t do the job. If we’re having to patch it this often, that says it’s broken at a systemic level. But at some point, the workarounds are the system.

I’d also like to talk about the size of the EI check, because I think a lot of people assume EI replaces something you could actually live on. Run the math against, let’s say, a Toronto rent for me.

Mike Moffatt: If we look again, the maximum you can collect in EI is about $729 a week. Put that in monthly terms, that’s about $3,150, but that’s considered taxable income, so that’s $3,150 before tax. When the average asking rent for a one-bedroom apartment in Toronto is about $2,200, you don’t have a lot left over after you’ve paid your rent and taxes on that $3,150. That’s assuming you’re getting the max, so there’s really not much left over for food and everything else.

That 55% replacement rate was set when housing took a much smaller bite out of a paycheck. That percentage has stayed put; the bite hasn’t.

It’s really tough to live off 55% of your income when housing costs are often 40%, 45%, or 50%. There’s a big squeeze there, and you really can’t make ends meet. It’s one of the reasons why we’ve seen a big increase in food bank usage in Toronto - because of that gap between EI and rent.

Sabrina Maddeaux: Costs are rising everywhere, not just housing. That’s assuming a young person is living on their own - they could have a young child. We keep talking about why young people don’t have families. What happens if you lose your job? How are you going to pay for anything when $3,150 a month before tax is against a $2,200 one-bedroom?

What if you have a larger place because you’re trying to raise a family or just had a child? That’s the program working exactly as designed for somebody who’s cleared every single hurdle and is living in a very specific circumstance. 55% of a wage that already lost the race against housing is 55% of a number that stopped being enough years ago.

This formula just assumes that your rent is a manageable slice of your pay. In Toronto and Vancouver, the reality is it’s actually more than half of your pay a lot of the time. People organize their whole lives around this: you stay in a job you should leave because a gap in your hours means there’s no floor underneath you.

A program meant to make the labour market more flexible ends up freezing people in place. When a check can’t cover the rent, all EI buys you is a slightly slower slide towards the same outcome: you lose the apartment in month four instead of month one.

So I’d like to get practical: if you were redesigning this, what actually changes? Give me the honest version, including the best arguments against.

Mike Moffatt: There are a lot of proposals out there. I’m going to choose a few that I’ve seen that make sense to me, and none of them are particularly radical—which I know is unusual for me. I’m not looking to blow up the system, but there are some tweaks we could do.

One is setting a national entrance requirement instead of this regional ladder that discriminates based on where people live, and setting that requirement lower. If we set it around 360 or 420 hours, more people would qualify, particularly younger people. When you widen that qualifying window, you can make it so that a decade of premiums counts towards something on your second claim if you have one. That would be the first area I would look at.

The second one is we really need to figure out what gig workers are and have a better system of classification, because right now they’re neither fish nor fowl. We need to have a bunch of reforms there to make sure those folks aren’t falling into the gap.

You asked me for honesty: the challenge on those first two things, particularly the first one, is that it’s going to cost more money. Where does that money come from? Which brings me to my third change: we probably have to change how EI is financed.

Sabrina Maddeaux: Those reforms make a lot of sense to me. Relatively small tweaks can make a massive difference; this doesn’t necessarily need to be a burn-it-all-down-and-build-it-up-from-scratch situation.

I also agree that there needs to still be robust protections in place so that people are being verified and we make sure it doesn’t have unintended consequences, like young workers not getting hired, choosing not to enter the workforce, or any inflationary impacts, which we saw some of with CERB.

The point is, with EI, the word “insurance” is doing a lot of work. It’s something you pay into and cannot claim, which really makes it, in many situations, a tax that’s just wearing a friendlier name. There’s a through-line here to everything we cover on The Missing Middle: a system designed around one generation’s working life, still running and still funded by a generation that works entirely differently and gets far less back out of it.

The cost when it comes to EI goes past just the money. What it erodes is the basic belief that paying into the system gets you something, and that having good faith in the institutions and the social contract will generally work out fairly in your favour. That idea holds up a lot of the rest of the social contract more broadly, and young Canadians keep watching it fall on their pay stubs every two weeks.

We know the fix is well understood. Those things you listed have been brought up by others over the years and haven’t been acted upon. Those two rounds of consultations just a few years ago already told the government what to do. What’s missing here is anyone willing to spend political capital on people who often don’t yet vote in the numbers that would make it worth their while.

Mike Moffatt: This is really one of those issues where young people really aren’t getting the support that they truly need.

Sabrina Maddeaux: So we’ll keep an eye on it. I hope that politicians do act, because there are a lot of young people in a lot of pain right now, and they deserve better from government.

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

Mike Moffatt: And if you have any thoughts or questions about the downsides of having a student job in the 1990s, please send us an email to missingmiddlepodcast@gmail.com.

Additional Reading/Listening that Helped Inform the Episode:

Statistics Canada - Employment Insurance Coverage Survey, 2024 (youth eligibility 50.3%, part-time 41.6%)

Statistics Canada - Labour Force Survey, July 2026 (youth unemployment 12.6%)

Service Canada - EI regular benefits eligibility and the qualifying period rule

Service Canada - EI benefit amount (55%, $729 weekly max, $68,900 MIE for 2026)

ESDC Digest of Benefit Entitlement Principles - long-tenured worker definition and 20 extra weeks

ESDC - EI Monitoring and Assessment Report 2024-25, Chapter 2 (34.4% entitlement exhaustion rate)

Canada Gazette SOR/2026-64 - 25.4% of unemployed were long-term unemployed in January 2026

Rentals.ca March 2026 Rent Report - Toronto one-bedroom asking rent $2,206

Statistics Canada - Experiences of self-employed workers in Canada, 2023

Canada Employment Insurance Commission - 2026 premium rate and $17.2B Operating Account deficit

ESDC - EI modernization consultations, Phase 2 What We Heard report (2022)

IRPP - Canada’s EI Is Once Again Failing Its Stress Test (benefit exhaustion as the coverage driver)

C.D. Howe Institute - Should gig workers be covered by the EI regime? (the case against)

Brought to you by the Missing Middle Initiative

For some women, including U.S. Representative Alexandria Ocasio-Cortez, the solution is freezing their eggs, hoping they’re buying themselves more fertile years.

In this episode of DemograFix, Mike and Cara break down what egg freezing can and can’t do, the real costs and success rates, the lack of transparency among Canadian fertility clinics, and the misleading marketing claims that can make the procedure sound more like an insurance policy than a gamble.

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: We all know milestones have gotten pushed back for younger people. School goes longer, people are getting married later if they get married at all, and obviously buying a home now takes years longer than it used to—if you can do it at all. All of that you can delay, but there’s one milestone that doesn’t actually bend the same way: fertility.

Mike Moffatt: There is technology, though, that can help—or at least partially. Egg freezing is a huge industry that offers hope to people that they can delay fertility while the rest of their milestones catch up.

Cara Stern: But the question we want to discuss today is: does it work? Can you really delay your fertile years?

Mike Moffatt: You may have heard about U.S. Representative Alexandria Ocasio-Cortez freezing her eggs.

She literally showed the world the process behind it, injecting herself with hormones and explaining the what and the why. We saw a lot of comments on social media that had a lot of misinformation.

We’re going to clear some of that up today, along with discussing the broad economic and social trends causing an increase in the use of the procedure.

Cara Stern: I really loved seeing AOC share her egg-freezing journey online. It was wonderful that she was so open about the process and peeled back the curtain so people could see what goes on behind it. Knowing what it is, how it affects you, and seeing someone go through it will probably lead more people to feel comfortable with the process. She did a wonderful public service, because not having information makes it so much scarier.

Mike Moffatt: Before we get into the mechanics of egg freezing, we should step back a little bit and look at why egg freezing has become so increasingly popular in the first place. There are a number of reasons why someone might want to freeze their eggs, so we don’t want to overgeneralize, but obviously one of the biggest ones is that it allows families to delay having children.

For many middle-class families in the postwar era, there was a certain pathway of events: you finished school, you started a career, you got married, you saved some money, you put a down payment on a home, and you started having kids. A lot of people deviated from that pathway in one form or another, but it was common enough that it became a stereotype for the middle class.

Cara Stern: Nowadays, there’s no clear path at all.

Mike Moffatt: You can shuffle them all around, but at the end of the day, every step on that pathway has gotten delayed. In the 1950s and 1960s, many people started careers right after high school. Then we transitioned to starting them after three or four years of undergrad or college. Nowadays, people are adding a couple more years of postgraduate work and sometimes a gap year, which often comes with student loans that need to be paid off. It takes longer to just hit financial sea level. Having to pay back those student loans and adding extra years of schooling makes it even harder to save for a house.

And, obviously, those homes are so much more expensive now, so you have to save more money. For my parents’ generation, it wasn’t uncommon to hit all of those milestones on this pathway before the age of 25. But for the current generation—millennials now going into Gen Z—they’re having to wait until age 35 or longer to hit all of those milestones.

Cara Stern: It’s such a big problem in today’s society that we require so much schooling to access jobs and incomes that never needed that much education before, and we seem to just accept that it takes longer and longer to get people to a place where they feel ready to have a kid.

Mike Moffatt: I don’t think that’s a very sustainable solution, and I don’t think it’s nearly as generous as it looks. I hope that societies and governments start to address all of this, because it feels like we’ve hit an equilibrium that isn’t particularly sustainable. An obvious place to start is the cost of housing: if we can get that cost down, people are going to be able to have families earlier. But until then, until we address all of these points of the pathway and how long they’re taking, families are going to increasingly opt toward egg freezing.

Bringing it back down to the individual level: Cara, you were following this much more closely than I was—what were your thoughts when you heard AOC’s story?

Cara Stern: Honestly, I was thinking that she’s probably experiencing a lot of what other people her age are experiencing, but doing it publicly. She’s the same age as me. I hear these stories among my friends, particularly ones who are still looking for a partner and are worried that they’re going to run out of time.

Often, they’re still single at the age when they thought they’d have a kid. Look at AOC, who brought viewers into her journey at the same time her breakup with her fiancé became public. I’m sure she’s dealing with the same thoughts as a lot of people her age who didn’t expect to be single at 36 or almost 37. She’s probably thinking, “I need to find a partner, I need the time to be sure they’re the one, make the decision to marry them, and try for a kid.” Everyone knows that takes time, and if you feel you only have a few years to do it, it makes sense why she decided now was the right time—just like many other people reach that same conclusion at this age.

Mike Moffatt: When you lay it out like that, it makes sense at an individual level. The pieces fit together, and you can see that being common for a lot of people, not just AOC. It shows why this has become such a huge business across North America and globally.

It’s also an unusual part of the healthcare industry because it’s not in response to a medical concern; rather, people are trying to proactively fight their biological clock by opting for a procedure like this. Ultimately, it comes down to trying to force biology to match the way our society has changed, where all these markers of adulthood—including starting a family—have been pushed back and no longer align with our biological development as humans.

Cara Stern: It’s also a weird part of the healthcare system in that the providers know this is a very emotional decision. I think there’s a tendency for companies to prey on this massive question in a woman’s life: whether she’ll be a mom one day.

Mike Moffatt: You’ve got a situation with a ticking clock where people have to make decisions, and that creates an environment where providers can start making big promises and using high-pressure sales tactics. To be clear, we’re not suggesting any one particular provider does that—obviously, there are a lot of responsible companies out there—but it creates the incentive for providers to use high-pressure sales.

Cara Stern: We’re lucky that there are some numbers on this in Canada, thanks to reporters at the Investigative Journalism Bureau who worked with the National Post. They spent eight months going through the websites and social media of 42 Canadian fertility clinics that market egg freezing, looking into the promises these clinics made. They found that five out of every six used language that reporters judged to be misleading or overstated—phrases like “guaranteed baby program” or telling women egg freezing lets them “take control of your reproductive future.”

Mike Moffatt: That’s a clear sign that at least some providers are responding to incentives to do a hard sell, knowing the mindset of their potential customers. In fact, as these reporters indicated, only 25% of the embryos created from frozen eggs actually turn into a live birth.

Cara Stern: To get a little more into the data, the Canadian Assisted Reproductive Technologies Register noted that at each step of the process—from thawing to fertilization and transfers—you lose eggs.

Mike Moffatt: There’s a huge caveat to that number: most people who have frozen their eggs haven’t tried to make a baby from them yet. The rate of people freezing their eggs more than doubled from 2020 to 2024. A lot of the money spent on egg freezing is from people who still hope to use them one day, or who are using it as an insurance policy while still trying to use their body’s fresh eggs when trying for a kid.

Cara Stern: A big part of that increase after 2020 was people having time to reflect on their lives during the pandemic, plus the disruption it caused to dating. I’m sure it made a lot of people wonder how long it would take them to find a partner in a period where no one was really meeting up, so egg freezing seemed like a good option to take back those years as much as they could.

Mike Moffatt: The pandemic really accelerated a lot of trends that were already happening, from people working from home to families moving out of cities to smaller communities. This may just be another example of that.

Cara Stern: There’s so little data out there on the success rates of individual clinics because they aren’t required to publish their results. It’s very hard to know if the clinic you’re looking at is the right one to use, and it costs so much money. Of the small number of Canadian women who have gone all the way through the process, the registry data showed that in the decade leading up to 2024, there were only 70 babies born in total. That number shocked me. There’s so much money being spent right now, yet so few babies were actually born from it over the course of a decade.

Mike Moffatt: That shocked me as well when you showed me—I would have guessed the number was closer to 7,000 or maybe 70,000 rather than just 70. Out of everyone who came back to actually try and use their frozen eggs, roughly only a third ended up with a baby. That’s a substantial number of people, but it’s a long way from marketing it as an “insurance policy,” which is the exact phrase a lot of Canadian clinics use in their marketing.

Cara Stern: The lack of data is a huge problem. It’s not a quick decision you can make, but a lot of people want to move fast once they’ve decided to freeze their eggs. It’s a long process that often starts with tests, and you have to time everything to your cycle. By the time a lot of people try freezing their eggs, they’re already racing against time, let alone trying to parse through non-existent data in Canada to find the best clinic.

But most women aren’t even thinking about egg freezing at that point—it’s very normal not to have a kid in your 20s these days, especially in urban areas where the timeline pushes later. Most people in their late 20s aren’t thinking about fertility decline because, even if they’re single, they assume they’re on track with modern timelines to find a partner and have kids without going through egg freezing.

Mike Moffatt: When you lay it out like that, it’s no wonder birth rates are falling in so much of Canada, particularly in our cities.

Cara Stern: Clinics suggest that below 35 is the ideal time to freeze your eggs, which makes sense given the big drop in fertility after that age. To get a good chance of a successful pregnancy, you might need multiple egg retrievals, and the odds of needing multiple cycles increase with age. It costs at least $10,000 per cycle, and often more like $20,000 with medication, so the earlier you do it, the better.

Mike Moffatt: There’s a really grim irony here: egg freezing is becoming more in demand because people in their 20s can’t afford a house, which also means they’re unlikely to be able to afford egg freezing. We’re trying to solve a problem with a solution that shares the exact same affordability issues as the problem itself.

Plus, the median number of eggs retrieved in one cycle often isn’t enough for a clinic to consider it likely to result in a pregnancy, which probably has something to do with the median age of patients going in for these treatments. People need to realize that it’s going to cost $20,000, $40,000, or even more, and it is far from a slam dunk.

Cara Stern: In Canada, public health coverage for egg freezing is virtually zero if you’re doing it for age-related or personal reasons. There is coverage in some provinces if you’re going to lose your fertility due to something like cancer treatment, but no one funds it if you’re just trying to buy more time. Your best bet for funding is a workplace benefits package, but even then, you’re paying a substantial amount out of pocket.

Mike Moffatt: When women do come back to use the eggs they’ve frozen, about a third are between the ages of 38 and 40, and just over 40% are older—so the vast majority are over the age of 38, assuming they come back to use them at all.

Cara Stern: I want to go back to clearing up some of the misinformation out there.

It helps, but it’s nothing close to a sure thing, and it’s not something we should start counting on as a society as a standard way for women to push their fertile years later.

Mike Moffatt: Exactly. The higher risks of pregnancy complications as you get older are still the same, even if the eggs themselves are younger.

Cara Stern: Another piece of misinformation I saw with AOC’s post was from people thinking she was too old to freeze her eggs. There were comments saying things like, “What eggs is she freezing? She’s almost 37, she has no good eggs left.” That’s not true either.

One thing that would make the situation a lot better is if Canada started regulating these clinics. If you’re about to spend tens of thousands of dollars—where one cycle could be a full year’s worth of rent money—you want to know if a clinic has good success rates or not. Clinics currently don’t have to publish their results. Quebec has a public registry, but it’s an outlier in this country. I’d like to see other provinces start taking this seriously. Whether it should be a federal initiative or individual provinces stepping up, we need regulations to make sure people understand what they’re getting into when taking this giant step.

Mike Moffatt: Increased transparency seems like an obvious first step. To be clear, none of this is about telling anyone not to freeze their eggs. For some people—especially in their early 30s who haven’t found the right partner yet and know they want kids—it’s a reasonable option to try. But you need to understand the odds, and we need transparency before people hand over their money.

Cara Stern: In the end, the big story here is that egg freezing can work, especially if you’re younger or if you have the time and resources to do multiple cycles. It’s not a complete pause button on your biological clock, but it can help. You just have to go into it with realistic expectations.

Cara Stern: It doesn’t fix those underlying problems. It’s like a big, expensive attempt to buy time in a system that’s out of whack with our biology, and a lot of changes need to be made to get us back on track.

Thank you so much for watching and listening. Our producer is Meredith Martin, and this episode was edited by Canadian Civil.

Mike Moffatt: If you have any thoughts or questions about the best pathways to take in the game of Life, 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:

CARTR Plus Annual Report 2025

Fertility Inc - Investigative Journalism Bureau

Elective Egg Freezing for Age-Related Fertility Decline

Mount Sinai Fertility - What to know about egg freezing

With Big Choices Ahead, Ocasio-Cortez Navigates New Territory

Ocasio-Cortez’s decision riles some on right, while also winning admiration

AOC’s egg-freezing posts on Instagram

And her TikTok

Brought to you by the Missing Middle Initiative

Mike Moffatt sits down with The Wealthy Barber author David Chilton to discuss how Canadian personal finance advice must adapt to skyrocketing housing costs, easy credit, and shifting markets. They explore renting versus buying, low-cost ETF strategies, and economic brain drain, before offering tailored advice for policymakers, recent graduates, and mid-career professionals.

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: Hi everyone. Today we’ve got a special guest. We’re happy to welcome financial advice guru David Chilton, author of the Canadian classic The Wealthy Barber, and former co-host of Dragon’s Den. I remember reading The Wealthy Barber back in the 1990s, when I was in my 20s, and picking up some great advice. David has an updated edition that came out last year that we thought it’d be great to have him on and chat about how his advice for young people has changed over the past 40 years. Welcome. Thanks for being here today.

David Chilton: It’s great to be here, Mike. I’m a fan. I followed you for quite some time. You are the best-looking economist in Canada, and I’m drawn to you because of your outstanding hair. You are fantastic.

Mike Moffatt: Thank you. We’re a team.

David Chilton: We are a team.

Mike Moffatt: I appreciate that. My goal in life is to either be better looking than any economist and a better economist than any good-looking person.

David Chilton: I think you’re nailing both.

Mike Moffatt: The Derek Zoolander of economics.

We’re going to do something fun. We’re going to play back your own words to you. Specifically, we’re going to start by playing a clip of you talking to a friend of ours, the friend of the podcast, Steve Saretsky, who you had on your podcast not too long ago.

When I first read The Wealthy Barber back in the mid-1990s, the one piece of advice that really stuck with me was the idea that you should save 10% of your income and invest it in long-term growth. I still do that to this day. What about that piece of advice made writing the newest version harder this time?

David Chilton: It’s getting the 10%. The cost of living is so high. The other thing is, the ubiquitous availability of credit has made some things very challenging. I can have people pay themselves first, the most important commandment in The Wealthy Barber, but still neutralize those savings by building up debt on the other side of the balance sheet, accessing lines of credit, overusing credit cards, etc.

Remember when I wrote the original book back in ‘87, ‘88 - It came out in ‘89 - people carried one credit card, and often it had a max of $1,000. Lines of credit were not available to the vast majority of people, so people had mortgage debt only, for the most part.

I think the CPI doesn’t fully capture what the costs have done to the average Canadian family. Younger families are up against it for the most part.

Mike Moffatt: It’s an exercise I play with my dad sometimes. His inflation rate is different from mine, and it would be different from my kids’. My parents have a fully paid-off mortgage, so they don’t have to worry about home prices, and they don’t really have to worry about interest rates, or at least not in the same way I do. I’ve still got a mortgage. I don’t worry about home prices, but I’m affected by interest rates, and somebody new on the market gets hit both ways. When you look at CPI, it is an average of all of our expenditures, but at different points in your life, you’re going to be hit differently by it.

David Chilton: Absolutely, look at the last year, we had all these mortgage renewals and a lot of people have seen their mortgage costs go up 25, 30%. If you don’t have a mortgage, that hasn’t come into your life at all. Everything else related has gone up at a greater-than-CPI pace: property taxes in most areas, insurance, obviously the cost of the home. If you look at general upkeep and major renovations, they’ve all gone up, especially since 2020, well past the CPI rate. It is expensive to own a home.

There’s no question: from every angle, it’s very, very difficult. The ripple effect of that is huge on society. You have lower savings rates; you have less money available to invest.

Mike Moffatt: Back in the late 80s, early 90s, when the first edition came out, there was this term, “brain drain,” that was really in vogue. It was mostly Canadians looking for economic opportunities and higher wages in the US. Now we’re starting to see, particularly after the pandemic, this “brain drain” pick up again among younger folks. It seems to be more driven by affordability concerns and particularly house prices. You talk so much about making the financially responsible choice. Is there a point where we look at this country, or even just the GTA, where we say the financially responsible choice is just not to be here anymore and to go somewhere more affordable?

David Chilton: You’ve nailed it. The good news is home prices in the GTA and parts of Ontario have come off as much as 25 and 30% in some instances. Rents have been heading down over the last little bit. We’ve had so many purpose-built rental units come on board, and that’s helping the supply side. But the general problem still exists.

Since I wrote the book, home prices have risen three times faster than incomes. Obviously, that’s put people up against it. Today’s interest rates, 4.1% on a five-year mortgage, are lower than they’ve been on average during that 35-year term, and that negates some of the pain, but not all of it. Building the down payment is incredibly tough.

They’re going to have to go to a high-rise condo for a family, which isn’t ideal, instead of being in a detached home, which is what their dream was. The reality is a lot of people are going to have to start living with that kind of trade-off going forward.

Mike Moffatt: Even where we’re from in southwestern Ontario, if you want a single-detached home, you’re looking at 600, 700,000. I was always taught never to buy a home that’s three times greater than your income. You’ve got to be making quite a bit even in some of the secondary markets to hit that threshold.

David Chilton: You’re exactly right. Let’s go to London, where you are. You can go into some of the centers, like Byron, and get a relatively small house right now for $600, $650 000. But if you use the three-times multiple, you’re still looking at a family income need of over $200,000. Two teachers don’t quite get there in many instances. This is not something we’ve seen before. It is very challenging.

Remember, all the other costs I mentioned with homeownership have risen at a greater-than-CPI pace, alongside so many other costs in life.

For people like you and me, we understand that intuitively, but a lot of people don’t seem to grasp that. They’ll say inflation is under control, but high prices are still there, and incomes for the most part haven’t kept up. Now we’re running into some economic challenges with tariffs and everything else. It’s very tough, and a lot of families are squeezed.

A lot of families are doing well, too. In fact, as I put the book together and did all the writing and research, I was amazed at how tough it was to put people in buckets and speak to them. Everybody’s situation seems so different. Some people have parents helping out, and grandparents helping out. Some people don’t live in the big centers. Some people have one good income. It’s really tough.

One of the things The Wealthy Barber really helped me with was having multiple characters in the barbershop, and that let me cover a number of different scenarios because we’re all so different now.

I’m jumping all over the place, but I want to talk about a point you brought up. You did an excellent job on your podcast trying to address why aren’t builders building smaller homes? If there’s a marketplace for that, why aren’t we servicing it? That’s normally what you see in capitalism, and you nailed it. The math doesn’t work, and it’s because of the stubborn land costs, especially. There are other factors in the construction costs, but the stubborn land costs have been a big part of it. You have to amortize the cost of land over a certain number of square feet and at a high enough price to get back the investment you put in. We’re really in a bit of a tough spot here. The good news is it’s a less tough spot than it was a year or two ago because prices have come down a bit.

Mike Moffatt: We have seen those land costs come down. We’re seeing governments try to get some of those taxes, like development charges, down. I remember talking to some policymakers a few years ago who suggested getting a little bit more innovation and more productivity on homebuilding. I’m all for that. But if we look at large parts of southwestern Ontario or eastern Ontario, you could rub a magic lamp and have a genie construct the home for free, and a lot of people still couldn’t afford it because of the land costs and development charges. Understanding all of those costs is important.

David Chilton: Over the next little while, we’ll look at ways to mix modular home building with conventional home building. All of those things help. But to your point, that’s only one component of the total cost. Development charges, the land, all of these things come into play. Fortunately, rates are still relatively low, but it’s really difficult out there for younger people.

Imagine if you’re single right now. You’ve decided not to take on a romantic partner, and you really want to own your own home. You’re happy to own something relatively small. Good luck putting together the down payment. It is very difficult on a single income. You’re trying to save 20% of that 600,000 you mentioned. That’s $120,000 after tax off a single income in a high-cost environment. Very challenging indeed.

Mike Moffatt: It really is. It does feel like we’re moving to an almost dynastic society where your ability to own property is a function of who your parents are.

I’m really appreciative that you brought up the winners and losers. I’m one of the big winners in this, at least directly. I worry a lot about what this means for my two kids, but I’ve had years where my home has made more than I have. When it comes to a home, it is housing, but it’s also this strange savings vehicle. It’s one of the reasons why my parents would often tell me, buy a home because you can live in it and save at the same time. Does that advice still hold today?

David Chilton: There’s lots of truth to that. It is great for savings; there’s no doubt about it. You have to make the mortgage payment to the bank. It’s very annoying. People say, I’ll rent, and I’ll invest the difference. We don’t always invest the difference. It’s tempting to go on a trip and do other things, especially in a high-cost environment. Of course, we have the tax break on capital gains upon sale later in life. If the house has gone up dramatically and you choose to move down, rent, or use a reverse mortgage, there are all kinds of equity there that can do wonderful things.

There’s lots of merit to owning a home. Psychologically, it’s very important. Research says more so for women. I don’t know if that’s always the case, but on average it seems to be. For a lot of us, it is. We want our kids to have a yard. I have a dog, and owning your own home gives the dog more access to a yard. For most people, it’s still important.

Interestingly, we think times have changed so much, but when I did all the pre-research for the redo of The Wealthy Barber, almost the exact same percentage of people wanted to own a home as they did back in the 80s, and 80 to 90% of them wanted to own a detached home. Nothing had changed on the desire front from when I wrote the book almost 40 years ago. The reality is, though, it’s more challenging.

I’m very sympathetic to the challenges that young people are dealing with. There is one oddity I see where I just shake my head. That same group, people talk about them spending too much on travel. Some do, some don’t, as we did. Everybody makes mistakes with their spending, but too high a percentage spend too much on cars by any common-sense measure. Even though there’s a great case to be made for the fact that homeownership is unfairly expensive now, you don’t have to spend as much on cars as so many younger people do, often two good cars in one family. I recognize that cars in general are expensive. All cars have risen a lot in price, especially since 2020. That’s one area where people have to do a better job of staying on top of their money.

I advocate doing that for all younger people. But again, it doesn’t solve the problem that things are very expensive.

Mike Moffatt: It really doesn’t. At least nowadays there are apps to help you with that. Not all progress is leading us to necessarily borrow and spend more money. There has been at least some progress to help us save.

I’m going to give you a case study here. Let’s say you’ve got a young renter who’s decided homeownership isn’t for them. They don’t like the roller coaster up and down, and they don’t think they’re going to be able to afford a down payment. One: What should they be doing on the spending side, or not doing? And two: How can they build up financial security without having the forced savings of homeownership?

David Chilton: Interestingly, it’s very possible. In fact, you can make a fairly compelling argument right now that in certain parts of Canada, you’re better mathematically to rent. You have to have the discipline to see the difference between the overall cost of homeownership - not just the mortgage, but the property taxes and everything else you add in - and the rent, set it aside, and invest it for long-term growth. You have to more or less match expected market returns.

If you think the broad market averages are going to average 7%, you have to capture that, meaning you can’t have a lot of high-cost products in your portfolio. If you can do that, Ben Felix and other very sharp researchers in the States have said you may well end up ahead of the game. I am seeing more people think that way.

If they want zero or one child, they’re thinking, “Do I want the hassles of homeownership? I may be willing to rent instead. Maybe I’ll rent a small home or a larger-size condominium. I like the flexibility it gives me. I don’t have to take care of things. I don’t have to remove the snow and do the lawn work. I can take off and do a little travel that may match up to my job.” It’s important to remember that as positive as that sounds, almost the same number of people want to own a home now as they did 40 years ago. That group is maybe getting a little bigger, but not dramatically bigger. Most younger people still want to own a home, and if they’re going to have a traditional relationship and have kids, they really do want a detached home in most cases.

You asked, what else am I seeing careless spending on? I would say two things:

I’m amazed when they show me their spending summaries from some of the trips they’ve taken relatively cheaply, and they get a lot of knowledge from those trips. It’s a wonderful bonding experience in their early 20s; I get it. I’m actually quite supportive of that one. For the most part, they are doing a good job watching their spending on meals out. Obviously, younger males are gambling too much. The data is starting to get borderline scary on how much males under 35 are spending on gambling right now, and it really is wreaking havoc on their finances. Females tend not to fall into that trap nearly as much.

A lot of the people I run into are doing a pretty darn good job with their finances. You mentioned the apps. The problem isn’t lack of discipline. It’s income relative to expenses, and they don’t have full control over that. Expense costs keep running hot. There are ways to rent to do very well, but it does require discipline.

Mike Moffatt: It really does. I often feel that young people are unfairly maligned for their spending habits. There are greater temptations than there used to be. I remember all the stupid stuff I bought in my 20s. Part of that was a lack of options. I used to spend $100 to $200 bucks a month on CDs.

David Chilton: Just think about how much money you have spent on hair care products.

Mike Moffatt: We’re talking tens of thousands of dollars here. But I’ve got my money’s worth. I figure it’s a capital investment. Once I figure out how to write it off on taxes, I’ll be happy. I’ll look at whether there is a countervailing tariff on hair care products. My personal CPI might be going up a little bit this month.

David Chilton: You mentioned something there that we should explore a little bit.

One of the things I preach now is to inject a 24-hour waiting period before making any kind of significant expenditure. When you do, in most cases, you forget about it. You don’t just decide against it; you forget about it.

With the redone book, chapter nine, which is on Saving Savvy, shares all kinds of tips that I’ve learned over the years from watching adept people and what they do to save more efficiently. That’s been the most well-received chapter in the book. I thought for sure it would be Pay Yourself First, compounding, or TFSA versus RRSP. Chapter nine has been the number one chapter for feedback because it’s such a struggle to save now. If you can pick up some tips on how to avoid giving in to that temptation, it’s absolutely crucial.

I preach this, though nobody listens to me, but using cash is still a wonderful way to go. Instead of using credit cards, if you force yourself to see the money leaving, you feel the pain. You realize it’s finite, and it slows you down. All those things are positive. But I’ve learned not many people are going to go that route.

Mike Moffatt: As a believer in behavioural economics, I will tell you that the cost of that isn’t so much getting the money, but you do get some eye rolls, particularly from the younger generation.

Speaking of the habits of Gen X and Boomers, one of the challenges I have with dealing with the housing crisis is that older generations understandably see some of these issues as, “If younger people want cheaper homes, that’s going to mean my home value goes down.” How do we navigate that? How can we convince Boomers and even Gen Xers like me that that’s a necessary thing to do, instead of just telling Millennials and Gen Z to knock off the avocado toast?

David Chilton: That part of The Wealthy Barber really went over well. One of the characters says, “What about this housing crisis?” Another responds, “What housing crisis? My house has gone dramatically up in value. That’s not a crisis. That’s a windfall.”

To your point, there’s a trade-off here. If we have lower-priced housing for the younger generation, that means those of us who are a little bit older have to accept less back in return for our home when we go to sell it. Interestingly, I don’t find that the media has this right. I find most Boomers are okay with that. When I have one-on-one discussions with people, they’re sympathetic. They have kids, they have grandkids. They want those people to be able to get into the housing market at an affordable level for their income, and they know they have to take a little less for their house.

It’ll be interesting, as Steve Saretsky and others have pointed out, what’s going to happen 10, 15 years down the road as all the Baby Boomers go to sell their homes. If they try to maintain these types of price levels - let’s say interest rates are low, or there are fewer foreign buyers - how are people going to be able to afford to buy them in the numbers that they’re going to come to the market? All of that’s going to be fascinating to watch.

In general, when the media says the Boomers don’t want the price of their homes to fall at all, of course nobody really does. But when they think through the fact that it’s better for the younger generations, I’ve actually found them pretty cooperative and fairly open-minded.

Mike Moffatt: I think politicians might overestimate that.

I know an anecdote isn’t quite the same as a scientific poll, but back in the 2021 election, a friend of mine, a Member of Parliament, was running for reelection. He told me it was the most remarkable thing. He and his volunteers had been knocking on doors, asking people what their issues were. Home prices were particularly picking up. He said, “I’m getting an earful at the door about housing prices.” Not surprising. But he added, “Here’s the surprising thing. The people I talk to who are angriest about it are not people in their 20s; they actually seem kind of resigned to their fate. They’re disappointed and upset, but they’re not necessarily angry for the most part. The group I find angry are moms in their 50s, usually, who have a 20-something in their basement that they’d like to see fly away.” Many of them thought at first their son or daughter was just lazy and not trying hard enough. Then they sat down, did the math with them, and realized this truly is broken.

I can’t speak for the Boomers, but I do think Gen X is sometimes unfairly maligned. Many of us do understand that prices need to go down.

David Chilton: That is a great anecdote and very much matches up to my experience with both Gen X and the Boomers. When they think it through, and you have a good conversation, they’re very aware that this isn’t fair to younger people and some sacrifices have to be made. If policies come in that knock the value of their home down, I think they’ll accept that better than you think, especially if it’s well positioned and well explained by politicians.

On the other hand, if you go to Boomers and try to take any of their OAS away beyond the current clawback rules, that is not well received at all.

For the most part, it’s not a zero-sum game, but that could involve some sacrifices from older people. How do we share those sacrifices to make sure that the people who are older but in trouble aren’t hit at all, and instead it’s others? Then people start talking about redistribution and taxing the rich too much. All of this is very tricky stuff. I wouldn’t want to be a politician in today’s times.

Mike Moffatt: I totally agree. I would not want to be a politician right now. I also agree about the third-rail nature of OAS, because we hear it here.

When you wrote the first edition in 1989, there were indications throughout the book that if you do the right thing - save and invest early - you can reasonably expect certain things in your life: an annual vacation, a nice car, a comfortable home, early retirement, the ability to give kids what they need and want, and baseball season tickets. That one is near and dear to my heart. Does that list still apply today, or would we have to amend that?

David Chilton: First off, I don’t think even I, the author of the first book, thought it would work out that well. The markets were so strong, both real estate and the stock market, that anybody who read The Wealthy Barber in the 80s and 90s and bought in did very well. Not because The Wealthy Barber is so smart, just because the markets were incredibly supportive. If you do those same things now, you can’t count on the same market returns.

Real estate had an unbelievable run because interest rates fell significantly over a 35-year period. The stock market returns have been robust. Precisely because they’ve been so strong, valuations are now stretched, and future performance may not be as good. The techniques will still work, but will they work as well going forward? The odds don’t favour it, but that makes it even more important that you save the appropriate amount, the 10 to 15%, because you may not have strong returns backing you up. How do you save 10 to 15% of your income when you have so much going on with housing and school costs?

That wealth divide is having spin-off effects that are quite dramatic in terms of costs in certain spending areas. I see it right now when I’m travelling. A lot of the high-end restaurants are doing exceptionally well, but many middle- and lower-end restaurants aren’t doing as well. It all ties into what income levels you’re servicing. It’s a fascinating time in history right now, and it will get more so with AI coming on and about to impact society on many levels.

Mike Moffatt: It really does seem that rich people are able to buy more baseball tickets and things like that. It does seem that sports leagues have been catering to that. The Rogers Centre has significantly fewer seats than it used to have, but more boxes.

David Chilton: You’re from London. Are you a Jays fan or a Tigers fan?

Mike Moffatt: I’m a Jays fan now. I actually grew up a Montreal Expos fan. I got into baseball just young enough before the Jays were good, during the Dawson, Raines, Valentine era. I’m a huge baseball fan. How can you not be growing up in southwestern Ontario? You had Tom and Jerry with the Jays. You had Ernie Harwell with the Tigers. There was always so much to listen to. I’ve got to ask, you’re from Sarnia. Jays or Tigers?

David Chilton: Listen, if I’d known you were a Jays fan and not a Tigers fan, I would not have done this interview.

Mike Moffatt: My brother-in-law is from Bright’s Grove and is a Tigers fan. I have to deal with this almost every day.

David Chilton: It’s my hometown area. I’m a Detroit Lions fanatic. I hate to say this, but I care more about the Lions than I do about my family. But the good news is my family cares more about the Lions than they do about me. We’re all working on an even playing field here.

We’re big Detroit sports fans to the n’th degree. Obviously, they collapsed in baseball recently, but the Jays have come on and have a very good chance to make the playoffs again.

Mike Moffatt: As a Lions fan, I think you then understand the suffering that young people are going through.

David Chilton: Exactly.

Mike Moffatt: Your dad gave you some good advice.

I want to go back to something you said before we started talking about baseball. You mentioned how difficult the environment is to invest in these days. The stock market looks overvalued, and we had this massive run on real estate. How should you invest these days?

In particular, one of the pieces of advice you’ve given in the book is to work with a financial planner, but you’ve got a lot of people doing the opposite, figuring that’s going to eat into their returns. Nowadays we have low-margin, expense-ratio ETFs. Does the advice about using a financial planner still hold today, or would younger people just be better off investing their money in a handful of ETFs?

David Chilton: I think younger people, for the most part, are better off just using the low-cost ETFs, the all-in-one asset allocation funds. You get 25 basis points or fewer per year. That’s tremendous. You get built-in diversification. I’d invest in the same way I taught 34 years ago: dollar-cost averaging into equities. You’re going to have some tough times and long downturns, but that’s fine. You’re still in there buying on an ongoing, monthly basis. You’re worried about long returns ten, 20, and 30 years down the road. Even though the markets are a little rich now on the valuation front, I wouldn’t pay much attention to that.

People like my father have been very good at that—he pays no attention and has done very well.

I do think these low-cost ETF products are worth a look. Later in life, as people hit 50 or 55 and are looking at retirement planning, accumulation, and estate planning, financial expertise is needed. At that point, you often need to sit down with a financial planner. It can be an advice-only planner, or somebody who is very competent, has their CFP, and does AUM. The advice changes a little bit then.

For younger people, keep it simple, keep your costs low, dollar-cost average, and automate everything.

That is still the biggest message I push.

Mike Moffatt: I think that’s fantastic. Are there any other pieces of advice from 1989 that you feel still hold up today?

David Chilton: A lot of the common-sense advice, like buying a smaller home than you can afford or qualify for, is still very good advice. Some people watching might say, “Dave, had you bought the biggest home possible, it would have gone up even more on an absolute basis, and you get the tax break on capital gains.” True. But it also would have had a lot of side costs hitting your cash flow: higher property taxes, higher insurance, higher hassle factor.

Go way back to The Millionaire Next Door, that famous book that has stood the test of time to the nth degree. One of the fundamental principles is buying a relatively small house compared to your income. Keep it simple. Keep your costs low. That tends to lead to more happiness, not just better financial results.

We still don’t do a good job of teaching that in the education system. That’s why books like The Wealthy Barber are important, and it’s why getting messages out there about housing is important. I think the information out there is very good now.

Mike Moffatt: I do as well.

I think there are three groups here I’d like you to provide some advice to. Your first group is the politicians and policymakers who listen to this podcast. What do you want to see from them? What would help the financial security of younger Canadians, whether it’s an attitudinal change or an actual policy?

David Chilton: I wouldn’t do something specific to financial planning. I wouldn’t necessarily introduce more instruments or expand the TFSA. What really helps younger groups prosper and have hope for the future is strong economic growth. We’ve got to get back to higher productivity. What does that look like? We need to attract more capital, and therefore we need to be attractive to capital. We’ve got to watch our tax levels and our regulation. We can overwhelm the marketplace.

I’m more concerned with those big-picture policy issues than little things to do with RRSP and TFSA tinkering.

To expand on that, you mentioned the brain drain earlier and how real estate is pushing some people away. I really saw that in Waterloo over the last few years, where founders have told me they’re probably going to start their company stateside. People say they’re turning their back on Canada, but they didn’t leave because of taxes or regulation. They left because they couldn’t attract talent in Canada. They could in the States because of real estate prices. People look at it and say, “If I locate in Texas, real estate is so much less expensive than it is in Canada.”

The other thing they bring up regarding attracting talent is the weather. A lot of Canadian talent says, “These winters are killing me.” We can’t do much about that one. But you can see the spillover effect of extremely expensive real estate impacting a lot of different things in our lives.

The big picture answer is we need more growth. We need more productivity gains. What can we do to help on that front?

Mike Moffatt: Now we have an answer if politicians say that that’s too tough. We can say the alternative is changing the weather. Pick your battle here.

Next, I’d like some advice for younger people, because you’re retiring and have gone through the lifecycle of your employment; I’d like the advice to be non-financial in nature. If you have a 22-year-old graduating from Western, what advice would you give them?

David Chilton: First off, be optimistic and be hopeful. There are a lot of wonderful things happening in the world. It is so easy to get caught up in the negativity now. You watch the news, trade battles, what’s happening in the Middle East, but all of us are living better lives now than people did 50 and 100 years ago by a dramatic margin. The trends in most areas are up and to the right, not down and to the right. We’re going to have major breakthroughs in things like health care over the next few years because of AI and all the smart people out there. It’s a world full of opportunity. Do not buy into the negativity. Look at the possibilities with side gigs, old-fashioned businesses, AI, and Facebook Marketplace. I meet so many younger people in their 20s and 30s making thousands a month doing things on the side.

Something else I learned from 35 years on the road is that 98% of people out there are wonderful. They’re kind, polite, cheering for you, and onside. They just want to add value and raise good kids. When you get all your news from the news, you get a distorted perspective that there are a lot of bad people out there. When you’re out there every day meeting new people in new environments, most people are very good, caring people.

Mike Moffatt: That’s true. As somebody who’s travelled from coast to coast to coast, we are really a country of great people.

The third group is a group of one: me. What advice would you give a minor celebrity podcaster who’s about to turn 50? This can be financial or non-financial.

David Chilton: On the financial front, I would go see a very competent financial advisor. Maybe an advice-only planner. You want to do some of your pre-retirement planning in your early 50s. Some people wait to go in for those meetings until they’re 60, and certain opportunities could be lost. That’s the one thing I would do. The other thing you have to think through when you’re 50, which I didn’t do a wonderful job of, is when you think you want to retire and what that looks like.

In general, I don’t think you need much advice. You seem like a very happy, content person. As I’ve gotten older, I’ve learned certain lessons. One of the things that stands out in the last few years especially is that friends are family. Spend as much time as you can with your friends and loved ones. As you get to be 55, 60, or 65, health issues start cropping up among some people in your friend group, and it can jolt you back. Take advantage of the time while you can. Don’t get too caught up in all this money stuff.

The overriding message I’ll give you is the same one I just gave to the younger people. We are lucky if we are healthy and live in Canada. Problems aside, we are very fortunate people. Instead of complaining, let’s get out there, make a difference, start something, grow something, and get involved in the community. Be a wonderful parent. There are so many ways to add value in life, and I find too many people are too negative now. There’s too much complaining.

Mike Moffatt: That’s good advice. I have someone who knows I complain too much, so it’s nice to be reminded of that. I’m going to need to bring you back on because I’m going to need help with my fantasy hockey pool. I haven’t won in decades. I seem to be better at it younger.

Thank you so much for coming on. As I said before we started recording, you’ve always been a bit of a hero of mine. I first read your book in my late teens, so you’ve always been someone way up here to me. To be able to have this conversation is great.

David Chilton: I enjoyed it immensely. I have a lot of respect for you. You’re a very sharp guy. The podcast is excellent, and I enjoy your Twitter account too. You have a lot of good thoughts on things, and you’re very good at explaining concepts. When you talked about why the builders are building less expensive homes, that was a very helpful piece. People need to understand that type of thing. Even a lot of policymakers don’t necessarily know all of that, so it’s good you’re drawing attention to it. It was an honour to be on the program. Thank you so much for having me.

Mike Moffatt: One of the life lessons that I try to teach younger people is don’t be afraid to ask what seems like silly questions. All those things I found out about the cost of building a home, I basically went up to builders and developers, acted like a five-year-old, and just kept going, “Why, why, why, why?” You learn things you otherwise wouldn’t know.

David Chilton: I’ll tell you a cute story. When I was about ten, one day my father said to me, “You can ask me; there’s no such thing as a stupid question.” The very first question I asked after that was actually stupid. He said, “You proved me wrong. Apparently, you can come up with a stupid question.” Anyway, I enjoyed it immensely, and I’m sure we’ll do it again at some point.

Mike Moffatt: We’d love that. Thanks again.

Thank you to our audience for watching and listening. Our producer is Meredith Martin and our editor is Sean Foreman. If you have any thoughts or questions around the economics of southwestern Ontario, please send us an email at the missingmiddlepodcast@gmail.com

Additional Reading/Listening that Helped Inform the Episode:

The Wealthy Barber 2025 Indigo Exclusive: The Fully Updated All-Time Canadian Classic

The Wealthy Barber (Wikipedia) | The Wealthy Barber (Official Site)

Steve Saretsky: Canadian Real Estate—CRAZY Times Have Led to CRAZY Times | TWB Podcast #26

Why Developers Only Seem to Build McMansions

Brought to you by the Missing Middle Initiative

In this episode of DemograFix, host Cara Stern sits down with Tom Babin, creator of the urban cycling channel Shifter, to unpack the fierce “bikelash” sweeping Canadian cities. They explore how bike lanes were weaponized into a high-stakes culture war pitting suburban drivers against downtown commuters, why provincial governments are stepping in to override municipal street designs, and why solid transportation data so rarely shifts public perception. From the political friction in amalgamated mega-cities to practical solutions like "road diets" and safety-first messaging, this discussion breaks down what is really driving the fight over who owns the road.

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: When looking into generational differences, one of the first things that came across was that younger people are delaying getting their driver’s license compared to previous generations. I find that really interesting, not just because it says something about how differently young people are living their lives, but also because it makes me think about the cost of living. Cars are typically the second biggest expense in household budgets, so for generations struggling with the cost of living, being able to live without a car can make a huge difference.

That raises a bigger question: if fewer young people are driving, are our cities and streets actually adapting to that? Across Canada, street design has become a major political issue, showing up in municipal campaigns and increasingly pitting cities against provinces. At the centre of a lot of those debates is one particularly contentious question: what happens when we take space away from cars and give it to bikes? Today, we’re talking about “bikelash”—the growing backlash against bike infrastructure happening across this country.

Tom Babin runs a YouTube channel called Shifter, which he describes as a channel about urban cycling, bike commuting, and the ways we get around our cities. We’re so grateful that he took the time to join us today. Welcome!

Tom Babin: Thanks for having me.

Cara Stern: Why do bike lanes make such a great wedge issue for politicians?

Tom Babin: Urban cycling has been coded as this urban elite thing. Bike lanes traditionally are in urban areas, but we’re seeing a lot of governments that are voted in by suburban electorates, so it becomes this culture war issue pitting the suburbs against the inner city. Of course, those broad stereotypes don’t apply to most people, but I think that’s why it’s become a good wedge issue. It’s a visual thing: when someone sees an “urban elitist” riding a bike, it’s an easy target to point to.

Cara Stern: I want to go over some of the places fighting about this in Canada. Ontario is probably the biggest example. A law came in stating that new bike lanes cannot take away a lane from cars without approval by the provincial government, and they put through a bill expressing the intent to remove three arterial bike lanes. Alberta seems to be taking inspiration from Ontario, talking about creating similar legislation to put city street design under provincial jurisdiction. They even created a tool where you can report your concerns about bike lanes with a multiple-choice selection on what you don’t like about them—with no option to say “I like them” or “I don’t care.”

Then there’s more: Montreal’s municipal race had a major focus on bike lanes, and in Halifax, the premier threatened to take over city street design just like Ontario if they went ahead with a bike lane plan, causing city council to back away. These are just the big ones, as there are others happening too. What is going on here?

Tom Babin: The one thing I’m fairly confident about is that none of this is based on transportation policy. If you look at what works for moving people around in cities, bike lanes have a lot of evidence in support of them. You actually see this in the original Ontario court case. The judge’s original ruling in favor of blocking the legislation noted that there was so much evidence that bike lanes increased mobility and safety, that they’re good for cities, and that there are no concerns about increasing traffic congestion. On the other side, there was basically no evidence that bike lanes increase traffic congestion, which was the main contention of the Ontario government. The judge was quite scathing, saying there’s so much evidence on one side and no evidence on the other.

Clearly, it’s not being driven by transportation policy; it really is a political issue. My sense is that it’s an easy topic for politicians to go after if they’re counting on a suburban or rural electorate. But if you talk to people in the suburbs, there are a few who really hate bike lanes, while most people just don’t care. We’ve seen this in elections in lots of places where politicians try to make it a big issue, but most voters are thinking, “There are way more important things to worry about here; I don’t know why we’re getting so fixated on this.” It feels less about transportation policy and more about wedge issues and culture wars, which also makes it really difficult to combat.

Cara Stern: You can even look at the States and see Donald Trump talking about bike lanes—it seems to be all over the place. We have all these amalgamated cities, so in order to run in Toronto successfully, you need to appeal to both suburban-minded and downtown-minded people. There is a tension between those two groups. I wonder if this is inevitable when you have these big cities that include suburban areas.

Tom Babin: You’re right about Trump—the Trump administration literally called them “DEI bike lanes.” I think that says everything you need to know about how they’re looking at them: not as transportation policy, but as a culture war. I absolutely think you’re correct about the makeup of the city. If you look at the cities in Canada that have made the most progress in alternative transportation and providing safe places for people on bikes, it’s Montreal, Victoria, and Vancouver. The commonality between them is that they have multiple jurisdictions rather than one single “unicity.”

The places where you are seeing problems and where provincial governments are stepping in are places like Calgary, Edmonton, and Toronto, which have bigger, amalgamated municipalities. In practice, you have people living in inner cities, many of whom don’t own a car because they don’t need one. They understand the value of bike lanes and use them all the time, so they vote for parties that offer different ways of getting around the city. That can bleed out—for example, Victoria has made great progress in the last few years, which has created pressure on outer municipalities to build more bike lanes because commuters see the benefits too.

When you get to those outer rings, people aren’t seeing those benefits as directly. A lot of people out there live with a car because they have to—it’s the only way of getting around. It’s just people living very different lifestyles: car-free versus car-dependent. That’s where the tension comes from, so the makeup of the city is a huge part of this.

Cara Stern: In some of the responses to the recent court case in Ontario, as you mentioned, the court initially said they couldn’t rip out the bike lanes. Then it went to an appeal process, and that court said yes, they can—it doesn’t matter if it’s based on data, it’s provincial jurisdiction. I’ve seen op-eds talking about how if you want change, don’t go to the courts; you should show up to vote.

What I keep wondering is how you do that when people in Toronto did vote for pro-bike-lane candidates, and the policies were passed through city council with staff recommendations. In the last mayoral election, the candidates who ran against bike lanes didn’t win. Even if you look at polling in places like Etobicoke—which probably has the most controversial bike lane—a majority of people don’t want them gone. Most people want them to stay, don’t care, or want to see more bike lanes. Why does this keep coming up if it’s not even a winning policy in cities?

Tom Babin: I think you’re right. The same thing happened in Edmonton: the previous city council was very favourable toward bike lanes and passed a $100 million investment in them, which was pretty controversial in a city like Edmonton. Everyone thought it was going to be a huge election issue, but most of the politicians who were most in favour of bike lanes got re-elected. It’s not a winning strategy there either because, again, for most voters, it’s just not a huge issue—they’re more concerned about jobs, housing, and other important priorities, and they see this as a distraction. For a certain type of politician, it lets them show off their credentials, signal to a specific electorate, and say, “I’m going to score points by dumping on those woke urban bike riders.”

Cara Stern: How did this form of transportation become a left versus right issue? I don’t understand the history of how we got here.

Tom Babin: It’s bizarre to me too, because traditional conservative values like self-reliance, efficient use of taxpayer money, and taking responsibility for your own health fit into cycling so well. I don’t think it’s strictly left versus right as much as urban versus suburban, which is how the vote breaks in a lot of Canadian cities now. Calgary never used to be like that, but as it has grown, more of the city is voting that way, creating an urban-suburban split. That might be the biggest difference in our elections these days across a lot of issues.

Cara Stern: When I hear from people who really don’t like bike lanes, the main thing I hear is, “Nobody uses them, they are empty.” Sometimes the variation I get is that they are only used by delivery drivers and nobody else. We know there is data showing that isn’t true, so why is that perception so prevalent?

Tom Babin: Because they can feel empty. If you don’t live downtown and you only drive in occasionally, bikes are small and don’t take up a lot of space. If you’re not there at rush hour, the lanes look empty. But you could say the same thing about roads—a lot of times they aren’t full either. On my commute here in Calgary, which is mostly on bike lanes and multi-use pathways, there is some traffic, but there’s also not a lot of car traffic on those specific roads because planners chose routes that aren’t the main arterial streets.

The data is clear that bike lanes work, but I have a lot of sympathy for people who struggle with car commutes. A lot of people choose a car because it’s their only option, so if they’re driving downtown, struggling to find expensive parking, or sitting in congestion while looking over at an empty bike lane, I get why that would annoy them. It’s an emotional reaction: “I’m wasting my time on this commute.”

As a cycling community, I think we’ve done a good job of getting the message out to decision-makers and politicians who understand the value of bike lanes, but we’ve done a bad job of winning the hearts and minds of people in the suburbs. In marketing terms, you have to raise awareness before you push people down the funnel to make a purchase. We’ve put all our effort into making the “purchase” without putting time into raising awareness about the value of transit and cycling in those areas.

When I go to public meetings around cycling, even with politicians advocating for transportation alternatives, I’m amazed that many attendees have never thought about cycling as a legitimate mode of transportation. If you’ve never traveled to a city with great cycling infrastructure and you live where a car is necessary for every trip, you’re just not getting it. Long term, we need to do a better job of spreading that message.

We’ve also spent too much time messaging around congestion, street life, and urban vitality, and not enough around safety. I noticed this recently in Seattle, where advocates are very on-message: it is always about safety. A couple of years ago, they passed the “safety stop” law, allowing cyclists to treat stop signs as yields. In other places, that got rejected because people argued, “We should all follow the same rules.” But in Seattle, they focused on evidence showing that allowing cyclists to yield and clear intersections quickly is safer. Keeping people safe on bikes is probably the strongest message we have, and we need to stick to it.

Cara Stern: When you mention safety and winning hearts and minds, I wonder how you do that for people who might never experience cycling as transportation. In Toronto, for instance, the main mayoral opposition candidate suggests putting bike lanes in ravines. That appeals to people who view cycling purely as a recreational activity, where riding through a ravine sounds much nicer than riding on main roads—even though that doesn’t work for most urban commutes. How do you square that?

Tom Babin: A lot of our messaging as cycling advocates focuses too heavily on commuting. There’s a concept called the “mobilities of care”—offering transportation alternatives to get kids to school, go to a soccer game, or take an aging parent to a doctor’s appointment. That is a great use case for alternative transportation, but we put a lot of focus on upper-middle-class professionals getting to their jobs downtown.

If we broaden the scope to include people living in urban areas taking a two-minute bike ride to the grocery store or the pub, that’s a better narrative. The reason people suggest cycling through ravines is because they view it strictly through a commuter lens. If you live in the suburbs, riding through a park sounds great, but it doesn’t help people living in those neighbourhoods who need cycling to get around for everyday life rather than just commuting.

Cara Stern: Critics often argue that the data supporting bike lanes assumes the most optimistic version of reality—like good weather rather than freezing cold or snow. Realistically, most people don’t want to bike in the winter in our current culture. What do you make of the argument that the data is too optimistic by not accounting for seasonality?

Tom Babin: You’re talking to someone who wrote a book about winter cycling! My answer is always to look at the winter data: it mirrors the summer data in that as infrastructure gets more connected, safer, and well-maintained, the number of winter riders climbs at the same rate as summer riders. There’s always a gap—usually, with good infrastructure, about 30% of summer riders will also ride in the winter—but as conditions improve, that number rises. That tells me it’s not just a core group of extreme winter cyclists.

Realistically, it’s harder in the winter because you need proper clothing and preparation, but fewer people walk or use sports fields in the winter, too. That doesn’t mean we don’t build those amenities. Bike lanes are an amenity we build for the summer; if we maintain them in the winter, people will still use them, and ridership will continue to grow.

Cara Stern: In the Ontario Court of Appeal ruling that allowed the provincial legislation to proceed, the judge wrote that “common sense” dictates an additional lane would make traffic faster. That reasoning rings true for a lot of people. You can talk about “induced demand”—the idea that adding a lane attracts more cars until it’s congested again—but the court described that as just a theory. It feels counterintuitive to people to think that taking away a lane won’t increase congestion.

Tom Babin: It makes intuitive sense, and that’s how people make decisions. Induced demand is a counterintuitive notion, so it takes education to understand it. We have to demonstrate it over and over again. There is tons of evidence that it’s real, especially in Toronto.

Cara Stern: We had a perfect real-life example with Highway 407 when the province permanently made a section of the toll road free, and it quickly became as slow as any other highway. I don’t know why it’s so hard to extrapolate from examples like that.

Tom Babin: Long-term education is part of winning hearts and minds—helping people understand that adding “one more lane” isn’t going to fix traffic. The same argument applies to transit. Most people don’t spend their free time thinking about transportation policy; they just want to get home to their families after work, and when they get delayed, they get angry and look for a culprit. They think, “I need one more lane,” or “That bike lane is in my way.” It takes work to help people look deeper at real solutions.

Cara Stern: When provincial governments override cities—which they are legally entitled to do in Canada—it makes it challenging for municipal leaders to push back. It makes you wonder why we vote for city council if their decisions can be overridden, but given that reality, municipal leaders try to find compromises. Is there a way to keep bike lanes without taking away car lanes? Are there specific street designs that accommodate cyclists while preserving space for cars, even on existing road conversions?

Tom Babin: In my more optimistic moments, I think having a second set of eyes on bike lane projects isn’t a terrible idea. Sometimes cities build poor bike lanes, and having a review process to adjust and improve them is great if that’s the genuine motivation. If we can replace a bike lane that isn’t working with one that works better somewhere else, that’s a positive outcome.

In North America, we’re still not great at building bike lanes. I see projects where planners seem to be reinventing the wheel with custom designs from scratch. We had one put in here recently with an unusual intersection design that pops the cyclist up into the pedestrian space to cross in the crosswalk before returning to the street. The first time I used it, pedestrians stopped and wondered what I was doing riding in their space!

We need to get better at concepts like the “road diet.”

Cara Stern: What is a road diet?

Tom Babin: On a four-lane road, you squeeze the existing lanes a little tighter to make room for a bike lane. This works well in North American cities, especially out West, because our road networks are overbuilt with wide lanes. Squeezed lanes have the added benefit of slowing drivers down, which addresses the common neighborhood complaint about speeding.

There was an interesting project in Edmonton involving an overbuilt road from the 1970s where traffic never reached half of its projected volume. The city repurposed that extra space to add a bike lane, green space, and a row of trees. Because there were about ten schools along that stretch, kids could walk and bike to school more safely, and residents felt much more comfortable letting their kids play out front with that added buffer. Even though it was criticized as a “bike lane project,” it delivered broad community benefits.

Cities should be more strategic with holistic planning rather than installing disconnected lanes wherever it’s easiest. If there were a clear 10-year network plan that everyone could debate and then execute, we wouldn’t have to fight over every individual bike lane. When Calgary installed its downtown bike grid, there was initial pushback, but city administrators got creative by reallocating parking into underutilized nooks and crannies, making the cumulative parking loss minimal. Constructive pushback that forces creative thinking isn’t a bad thing; I just wish that was the motivator rather than culture-war politics.

Cara Stern: For anyone interested in learning more about these issues or getting involved, Shifter is a great place to start. Thank you so much for taking the time to speak with us on The Missing Middle today.

Tom Babin: Thanks for the plug, and thanks for having me on!

Cara Stern: Thank you so much for watching and listening. Our producer is Meredith Martin, and our editor is Sean Foreman. If you have any questions about putting your kids on a bike in winter, check out the Shifter YouTube channel or email us at missingmiddlepodcast@gmail.com. We’ll see you next time!

Additional Reading/Listening that Helped Inform the Episode:

Ontario just made a ruling that could inform bike lane removal cases across Canada

Removing bike lanes will cost at least $48M: city staff report

Government of Alberta: Report concerns about bike lanes

Edmonton council approves $100M for bike infrastructure across city

Washington State’s new bicycle “Safety Stop” law allows people biking to treat stops signs as yield signs with some exceptions.

Guest Tom Babin’s official urban cycling and commuting YouTube channel

Can Canada build homes that are better, cheaper, and more sustainable? Adam thinks we can.

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: In large parts of Canada, particularly Lower Mainland B.C. and southern Ontario, it seems the only housing built in the last 10 to 15 years is either small apartments in high-rises or large homes well outside our major cities. Missing middle housing is truly missing.

Today’s guest is working hard to change that. Adam Mongrain was recently named the executive director of More and Better Housing, an organization tasked with finding the ways and means to deliver millions of new, affordable, low-carbon, and resilient homes to Canadians everywhere. Adam is a longtime resident of Montreal, a city that has historically punched above its weight when it comes to building missing middle housing. So, Adam, thank you so much for being our guest today.

Adam Mongrain: Mike, thank you for having me on.

Mike Moffatt: Let’s talk about More and Better Housing, an organization that has always had a close affiliation with the Missing Middle Initiative. Your organization was originally called the Task Force for Housing and Climate. It was co-chaired by former Conservative Deputy Prime Minister Lisa Raitt and former mayor of Edmonton Don Iveson. I acted as secretariat for that group. For those who don’t know what that means, the secretariat’s responsibility is to herd all the members of the task force - which is like herding cats - take all their great ideas, lock yourself in a dark basement with an unlimited supply of coffee, and bang out draft after draft of a final report or blueprint. That eventually became the blueprint for More and Better Housing. That blueprint contained dozens of recommendations to all three orders of government, many of which have since been implemented.

There were about a dozen other members of the task force, including well-known names in housing policy like Cherise Burda and Richard Joy. Adam was one of the members. I remember we also had someone named Mark from Canada 2020. What was his last name again? Oh, yeah, Carney. Mark Carney. I heard he went on to another job afterwards. Prime Minister of something or other.

Jokes aside, out of that report, an organization was created that took on the More and Better Housing branding from the blueprint, which you now run. What made you decide to take on this challenge?

Adam Mongrain: First, I want to thank you, Mike, for herding us cats. I was in there, and I know it’s really hard to get 15 people to agree on housing in the best of circumstances. I’m pretty proud of the work we managed to do under that stewardship. That’s really what made me decide to say yes to this. When you think through what we managed to do in the short time we had, with the means we had, it’s really impressive that we got so far. But the work is never done.

One key difference between the work we did initially and where we are now is that we were working off the CMHC recommendation in 2022 to build 5.8 million homes, and we wanted to make sure those homes would be low-carbon without bankrupting the country. Our recommendations led to improved outcomes, but things are changing rapidly. The work ahead for me is to take that great foundation and move it in new directions to adjust for how the world is changing before our eyes.

Mike Moffatt: When you have a blueprint with 140 recommendations, you might think, “How could we have missed anything?” But looking back now, I see things I wish we had included. I’m glad you’re filling in those holes and stepping back from specific policies to a 30,000-foot view of what the organization is trying to accomplish, particularly the word “better” in More and Better Housing.

One challenge when talking about infill-missing-middle housing, or gentle density, is that people can’t visualize it, or they catastrophize and picture the worst-case scenario of cramped homes that are less livable than what we have now. How can we show people that it’s possible to build homes differently in a way that improves their quality of life?

Adam Mongrain: This is going to be a big part of our activities going forward. Better housing can’t just be a promise; it has to be something real and tangible that everyday people can attain and dream about. To deliver that kind of better housing, we have to pass ambitious reforms to make denser housing legal and improve building codes. These things are complex, take time, and demand committed leadership. When you can’t imagine the outcome of these big swings, it’s hard to stay focused and commit to the reform.

Mike Moffatt: I love that you’re giving positive examples. The Missing Middle Initiative is often fairly criticized for coming across as negative - telling governments all the things they’re doing wrong. You’re approaching this by saying we get a lot of things right, and we just need more of those things. This touches on trade-offs. The biggest challenge with infill or multiplexes is the belief that building green or dense comes at the cost of affordability during an already severe affordability crisis.

The ethos of More and Better Housing acknowledges that while trade-offs exist, building differently can simultaneously make life more affordable and yield better environmental outcomes. Can you walk us through how we can achieve better affordability and better environmental outcomes at the same time?

Adam Mongrain: Even without extra requirements, the cheapest housing we can build right now is still expensive compared to prices 20-years-ago. We are paying top dollar for homes that are, in many respects, pretty crummy. Looking at it that way, it feels unreasonable to consider improving quality when we struggle to find buyers for entry-level homes. But maybe the problem with new construction isn’t just that it’s too expensive; it’s that it’s not worth the asking price.

Who wants to pay a million dollars for a house that is smaller, uglier, or darker than their current home? People with a million dollars to spend are usually currently housed, and they see the trade-offs at a consumer level. It’s a false choice between better homes and cheaper homes.

Mike Moffatt: Having that North Star around what success looks like is exciting. Moving down to the 20,000-foot level on how to get there: More and Better Housing has five focus areas called “game changers.” The first is legalizing density. People often ask what that means. What does legalizing density mean to you, and what specific changes do you have in mind?

Adam Mongrain: When we see pictures of beautiful, naturally lit European flats, people look happy, and their housing needs are solved. But when we try to build that in Canada, the response is usually either: “You can build it, but you’ll spend years arguing over feasibility,” or “No, you should feel bad for attempting to build that here.” If the law doesn’t make this explicitly possible, delivering improved housing and climate outcomes is extremely challenging.

Mike Moffatt: It’s not deregulation; it’s rewriting the rules.

People often ask if we can create incentives for builders to construct certain types of housing, but often those housing types are completely illegal under current rules. Aside from zoning, building codes are a major barrier. Can you give examples of changes you’d like to see in Canada’s building codes?

Adam Mongrain: A study by the Center for Building in North America showed that elevators for a four-story building in Canada are four times as expensive as those for a four-story building in Switzerland. In Europe, provisions in building codes keep costs down. Because our code inflates costs, we have very few elevators per capita compared to places like Spain, Greece, or Switzerland, which creates serious issues for our aging population and people with disabilities. We can lower elevator costs by changing the building code.

Another practical recommendation is adopting a Quebec provision: if you add a mezzanine on the fourth floor that takes up only 40% of the third story’s floor area, the building still counts as a three-story building. Once a building crosses into four stories under our current code, thousands of costly requirements trigger, which is why so few four-story buildings get built. Modernizing building codes is a critical game changer for untangling these issues.

Mike Moffatt: The risk aversion here is wild. Suggesting European standards gets pushback as if it’s too risky, despite no evidence of safety issues over there.

Moving to the third game changer: modern methods of construction, such as factory-built homes, low-carbon cement, and mass timber. What specifically should governments do differently to advance modern methods of construction?

Adam Mongrain: The primary problem is a lack of standardization. Because the industry isn’t standardized, every prefabricated or industrial component is a bespoke solution, with everyone creating their own rules as they go. When governments issue calls for proposals, they often fail to define modern methods of construction or specify how components should integrate across vendors.

Mike Moffatt: The fourth game changer is framing climate resilience and location. In plain terms, it boils down to: don’t build homes where they are likely to burn down or flood. What is the role for government here?

Adam Mongrain: Homes are increasingly exposed to extreme weather events. When disasters displace families, it puts immense pressure on the housing market. If we know certain areas are at risk of flooding or wildfires, we shouldn’t build there.

The fourth game changer is building for a changing world. We have the data and intelligence to ensure new homes are safe for the future. While nothing is completely future-proof, we can do much better, and these considerations must be folded into all housing plans.

Mike Moffatt: The fifth game changer is building far more social and not-for-profit housing, millions more units. How can Canada afford to scale not-for-profit housing to that degree alongside competing spending priorities like healthcare and defence?

Delivering millions of community housing units at current construction costs is financially unfeasible. However, the other four game changers directly address that problem. As we work to deliver housing to those who need it most, driving down overall construction costs through regulatory and technical reform will make scaling community and not-for-profit housing financially viable.

Mike Moffatt: This has been fantastic. Thank you so much for being here. Where can people find you to learn more?

Adam Mongrain: You can find us at More and Better Housing. We want to hear from people across Canada about their challenges, opportunities, and policy ideas. Get in touch with us at More and Better Housing.

Mike Moffatt: Thanks again to Adam Mongrain, to our producer Cara Stern, and to our editor Sean Foreman. If you have thoughts or questions, please email us at missingmiddlepodcast@gmail.com, and we’ll see you next time.

Additional Reading/Listening that Helped Inform the Episode:

More and Better Housing Canada website

This is how we could fix a problem Canada has been overlooking for decades

Blueprint for More and Better Housing: https://housingandclimate.ca/blueprint/

Four Pathways to Housing Affordability report

Funded by the Neptis Foundation

Brought to you by the Missing Middle Initiative

In this episode of The Missing Middle, Cara Stern and Mike Moffatt unpack how disenfranchising 7 million young citizens actively skews Canadian public policy. As our demographic profile ages, politicians face a clear incentive: cater to older, reliable voters with short-term entitlements while deprioritizing the critical long-term economic growth, housing, and education investments that younger generations desperately need.

To fix this structural imbalance, we explore the provocative idea of proxy voting for children. Essentially, this allows primary caregivers to cast ballots on behalf of their kids from birth. We examine how treating children as full citizens could force politicians to represent every Canadian, how existing tax law (like the Canada Child Benefit) already provides a seamless blueprint for designating primary caregivers, and why the biggest obstacle to electoral fairness isn't logisitics, but political self-interest.

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: What if I told you we could make our democracy stronger by representing every citizen who lives here in Canada? Would you go for it?

Mike Moffatt: Because I’m a Gen Xer, my reflex is to say no, I would think it’s a trap. I also took improv in high school, so I’m going to say yes, because that’s the rule. I love the idea of making democracy stronger, so I’d love to hear what you have in mind.

Cara Stern: We’ve talked a lot on The Missing Middle about how Baby Boomers vote in far higher numbers than Millennials and Gen Z. What that means is politicians listen to older voices a lot more and try to cater to their interests, because they’re more reliable votes for them.

This plays out in various ways, including by increasing entitlements like Old Age Security and the higher spending we’re doing on healthcare compared to things like education spending, which benefits younger people. But what if there’s a way to represent the interests of young people right from the minute they were born?

Mike Moffatt: I’m sure many of you are now picturing a baby going into the voting booth, like an even less entertaining version of the movie Baby’s Day Out, which is John Hughes’s worst movie by far. But I’m guessing you’re suggesting something a little bit more practical here, like a parent voting on their child’s behalf.

Cara Stern: Exactly. Today on DemograFix, we’re going to explore the idea of giving parents the right to cast a ballot not just for themselves, but by proxy for their children, and how that might incentivize politicians to represent all citizens right from the moment they’re born.

Mike, you recently wrote an article in the Globe and Mail about the kerfuffle that broke out when Shopify co-founder Tobi Lütke tweeted about taking away the rights of retirees to vote because they were no longer contributing to the economic growth of the country. And we did a whole episode of Classonomics about it. But what stood out for me wasn’t the problem portion of that episode, but the solutions proposed, particularly one that you mentioned involving proxy voting.

Mike Moffatt: The proposed solutions in the piece, including the proxy voting one, were tacked onto the bottom, but they were actually the inspiration for why I wrote it. In response to Lütke’s tweet, there was a lot of online discussion that was adamant that democracy was all about one person, one vote, with many citing that angrily at Lütke, saying you’re an awful person because you don’t believe in one person, one vote. Many of them cited section three of the Charter of Rights and Freedoms, that every citizen of Canada has the right to vote in an election of members of the House of Commons or a legislative assembly.

But meanwhile, there are roughly 7 million Canadian citizens who have no vote, who are excluded from our electoral system entirely due to their age. I found it deeply weird that on the one hand, people are absolutely appalled at the idea of putting an upper age limit on voting and say that violates one person, one vote, but have no problem whatsoever with a lower age bound on voting. The disconnect struck me as deeply weird.

Cara Stern: As someone with two young kids, they probably wouldn’t have great voting patterns. It would be for more cookies, more treats, and maybe more screen time. That’s what they would want.

Mike Moffatt: And that’s where the proxy part comes in, so that parents would vote on behalf of the kids in the best interest of kids. Who gets to vote actually matters, not just for them as individuals, but it also impacts what policies are likely to be enacted and which are not.

Cara Stern: And as your Globe piece makes clear, demographics does impact public policy. Over their lifetimes, Baby Boomers have benefited from being able to influence the world they live in just by the sheer size of the demographic cohort and the political strength they hold. They have strength in numbers. Now that they’re nearing retirement in large numbers, it means the types of political issues that they’re interested in changes, and that has an impact on the whole economy.

Mike Moffatt: Exactly. When the economy is doing well, as it was for much of the Baby Boomers’ adult lives—GDP was growing, unemployment was low—governments tend to get rewarded at the ballot box. That’s not necessarily because voters are putting the country’s economic interests ahead of their own self-interest; it’s because those voters generally understand that a strong economy is good for them and good for their families. But an aging population changes that math.

Cara Stern: I can see how this plays out when I would hear about the “elbows up” thing that happened with the Liberal Party. I heard a lot of Boomers saying things like, “We don’t care what it takes, we need to get off of our dependency on the US.” And I heard younger people being a lot more concerned about the job losses that would come.

Mike Moffatt: That’s a perfect example. You don’t have to be directly concerned about job loss if you are past working age. The incentives that different voters have from a self-interest point of view differ based on their age.

Cara Stern: So while Boomers historically voted in large numbers for pro-economic growth policies, now that they’re retiring, we see prioritization of entitlements that they might get to make their retired lives easier and tax policies that directly benefit them. But those tax policies are often paid for by younger generations.

Mike Moffatt: Absolutely, with increasingly generous Old Age Security benefits being a prime example of this phenomenon.

Cara Stern: The obvious fix is for more young people to step up, run for office, and turn out to vote. Millennials and Gen Z together outnumber the Boomers. If they showed up to vote, that would actually help their own generation. It’s kind of like fighting fire with fire. That’s what the Baby Boomers did. I’m thinking of Bob Rae, who became the leader of the NDP in Ontario when he was only 34, and he was premier when he was only 42.

Mike Moffatt: To a certain extent, that happened. If we look at the last federal election, all three of the federal party candidates were Gen Xers born in the 1970s. That can certainly help, but none of that addresses the fact that 7 million Canadians are excluded from the electoral process.

I’m not against more young people running for office—that’s a good thing—but it doesn’t fix the core issue here, which is that we’re excluding 7 million people from the process, and the fact that those 7 million people skew young causes our voting pool to skew old.

Cara Stern: That’s fair. There are solutions that represent the interests of more young people that don’t necessarily have them running for office themselves. I would love to see a five-year-old in office, but I don’t know how likely that is. They might get my vote!

Realistically, I’ve talked to many politically engaged people who find that there are many reasons why it’s not only hard to get elected young, but you take on so much risk and sacrifice. Especially in today’s social media world, it can be really brutal.

Mike Moffatt: It can be. If that young person wants to win, they still have to appeal to an electorate that is disproportionately old. Prime Minister Trudeau, a relatively young prime minister, increased Old Age Security. We can’t simply think that if you’ve got a politician in their 30s with kids under the age of 18, that they will necessarily cater to that population, because they have to follow where the electorate is.

Cara Stern: In the article, you mentioned we could lower the voting age by having parents cast ballots for their children in their household. I never heard of this idea until you brought it up to me. Where did it come from, and what is the history of it?

Mike Moffatt: It’s actually a rather old idea. The concept of proxy voting for children goes back to at least the 1840s, with advocates having a variety of motivations for advancing this idea. In Canada, the modern conception of the idea is closely associated with Miles Corak, a University of Ottawa alum and fellow economist now at the City University of New York. Back in 2012, he wrote a blog post on the idea, which we’ll link to in the show notes.

Globally, the modern conception is most closely associated with demographer Paul Demeny in his 1986 article, Population and the Invisible Hand. He originally published this to help with fertility rates, as he was concerned even back in the 80s. But Miles Corak takes it a step further: he argues that it’s about basic human rights because kids are citizens too. Right now, their voices just aren’t being heard in the voting booth.

Cara Stern: When you said this was meant to increase fertility rates, I was like, is someone having another baby just to get another vote? But I can see how it could lead to more family-friendly policies, which might help people who want to have more kids. Votes of parents over time become more valuable to politicians, whereas right now they are not nearly as valuable as retirees’ votes. Retirees are a much bigger group and they show up more, so their votes matter a lot more to politicians. Do you think that parents voting on behalf of their children could increase fertility rates?

Mike Moffatt: Nobody is having another child to get another ballot. We complain that people in their 30s and 40s don’t vote enough, and now all of a sudden they’re going to have a kid in order to get a second ballot when many aren’t using their first one? That’s not what economists are suggesting at all. The argument is more subtle: if children’s interests were included in the electoral system, then you start to see policies like enhanced Canada Child Benefit payments become more politically salient. Higher payments lower the cost of having a child, so families would have more children. Including children in the electoral system creates a virtuous cycle: child-friendly policies create more children.

Cara Stern: I see one big problem with the system: as a teenager, my politics were quite different from my parents, and I loved arguing with them about politics. If I was a teenager and told my dad to vote for a party, he might actually go and get two votes that go against what I actually wanted.

Mike Moffatt: I find that a deeply weird argument, because every day parents make decisions in the best interest of their child—medical decisions, choices about what school they should go to, whether to open an education savings account, and so on. I don’t get this idea that the decision of how a child’s ballot is cast is somehow more consequential to the child than whether or not the child is vaccinated, a decision we currently trust parents with.

At the same time, people argue that voting has little value in Canada’s first-past-the-post system and that most elections at the riding level aren’t particularly close. We have to place some faith in parents that they’ll do the right thing, in part because our entire society already places faith in parents to do the right thing. Otherwise, society simply doesn’t work.

Cara Stern: I don’t think it’s that weird if the whole purpose is giving every citizen a chance to vote and have them represented. On average, younger people tend to vote differently from older people. If we’re not actually giving them the option to vote when they feel ready, or lowering the voting age at all, then it’s not really about representing votes of children—it’s really just a weighted voting system.

Mike Moffatt: It’s not really increasing the ballot power of parents, but rather the parent has their own ballot plus another ballot or two that they’re using as a proxy for their kids. There is an expectation and a requirement that they act in the best interest of their children. If I have an older family member with dementia and I’m tasked with making financial decisions on their behalf, that elderly person’s money doesn’t suddenly become my money and get pooled together. I have a fiduciary duty to act in the best interest of the person I’m representing.

Cara Stern: There’s no enforcement here. So it is just giving a weighted vote to parents.

Mike Moffatt: Sure, because there’s no way to really determine whether or not they voted that way. But that doesn’t mean 100 percent of the votes are misused. If we had lax enforcement on financial matters, it doesn’t mean 100% of people making financial decisions on behalf of somebody with dementia are going to steal all their money. There is still an expectation to act in a way that meets that child’s best interest. You mentioned that older people have different voting behaviours than younger people, but “older people” is doing a lot of heavy lifting there—we’re not giving proxy votes to a lot of 97-year-olds.

Cara Stern: As a 14 or 15-year-old, I had a lot of opinions that differed from what my 40-something parents wanted.

Mike Moffatt: Sure. And our solution to that was basically to exclude you from the system. Not only are we excluding you from the system, but we are excluding children who actually have parents who will do the responsible thing.

Cara Stern: So if we did find a way to make the system a reality, what are some of the consequences, good and bad, that you think would come out of it?

Mike Moffatt: I think it would change our politics and our priorities, and actually live up to the spirit of one person, one vote—which online people think is really important unless that one person is 17, in which case, forget them. But I also think it would be very educational for children. I typically take my kids to the ballot box with me and try to educate them on elections, democracy, and what the parties stand for. If we were to implement a system like this and they had a vote, even if it’s just by proxy, they’re going to become more invested in the process.

My daughter and I could work together: we can discuss the candidates and issues and work together in determining her ballot. Hopefully, that creates a tradition where when they’re in adulthood, they continue voting. I see it as a way of increasing the voter turnout of people in their 20s and 30s, because you introduce them to the concept early and they continue on with those patterns through adulthood.

What do you think of that idea?

Mike Moffatt: There’s not just precedent for the idea—that’s how our system already works. There is a common objection to the idea of proxy voting that we’d have to figure out which parent should get the vote, or if it is split 50-50, or what happens if there’s shared custody in a divorce situation. All of those issues have already been settled in other domains, particularly in our tax and transfer system. In tax law, there’s a concept known as the primary caregiver. To go back to our Canada Child Benefit example, in Canada only the primary caregiver can apply for the Canada Child Benefit. By law, in a heterosexual relationship, the female parent is automatically presumed by law to be primarily responsible, and they must apply for the benefits or fill out paperwork to shift the primary caregiver status over to the other spouse.

For our kids, for example, I couldn’t apply for the CCB, but my wife could, or she could do the paperwork to designate me as the primary caregiver. For same-sex couples or shared custody arrangements, there are different rules, but a whole host of case law already exists to draw from. We wouldn’t be starting this from scratch; we could port the same rules that exist in tax law over to voting law.

Cara Stern: On the whole, I don’t necessarily mind the idea of proxy voting. My big problem with it is it feels like completely reinventing the wheel. It seems like there are already things that work well in other countries that improve our electoral system and get increased turnout. Increased turnout would definitely help with some of the outcomes we’re looking for, because we would get younger people and parents more likely to go out and vote.

But we know that Canadians are reluctant to change the electoral system at all. We have a first-past-the-post system where unless you’re in a swing riding, your vote does not matter to politicians at all. Swing ridings have outsized influence in policy.

The Trudeau government ran in 2015 on a platform that included changing that system, and as soon as they were elected, they dropped it. Given how hard it is to change the electoral system to one that already exists and works in many countries, why would Canadians have the will for this type of reform?

Mike Moffatt: I think there are two parallel issues here: one is the electoral system, and two is who’s allowed to vote. You can make those decisions independently. Even if you thought there were another electoral system that produces fairer outcomes than first-past-the-post—whether proportional representation, ranked ballots, or whatever—it still matters who gets to vote and who doesn’t. Even the most ardent proportional representation supporter would admit that a PR system where voting was limited to people who are at least six feet tall would be unfair, even if it eliminates concerns about swing ridings and gerrymandering. Setting arbitrary limits around who can vote and who can’t is deeply unfair, even if you happen to like the particular electoral system.

Cara Stern: I would think a six-foot-tall limit is a lot more arbitrary than the age that someone is considered an adult in society. A lot of the outcomes you’re trying to get here could be achieved with a simpler or more tried-and-true system used in other places.

I was thinking about how sometimes you and I get into arguments about things like proportional representation or high-speed rail, because I get the sense that you think it’s never going to happen, so why talk about it? When I’m thinking about proxy voting, my thought is this is never going to happen, so why are we talking about it? Do you think there’s any chance of it ever happening?

First, you have this status quo bias where we can’t imagine a world that’s sufficiently different than the one we live in. Had those reforms been successful in the 1840s and we had a proxy voting system in place for the last 180 years, today we’d be absolutely appalled at the notion that we take votes away from children. People would be appalled by that idea, but they’re not, because that’s how we’ve always done things. The status quo bias is real.

Cara Stern: It makes me think of an article you sent me from about 100 years ago, talking about whether children should get the vote, saying we should maybe consider giving women and children the right to vote — as if those are two equivalent things.

Mike Moffatt: The argument that was made against giving married women the vote was that it would essentially give two votes to the husband, making married men’s voting power twice as much as single men. It is interesting that the same arguments used 100 years ago to disenfranchise women are now being used to disenfranchise children.

Cara Stern: There is a difference between women and children.

Mike Moffatt: Absolutely. To be fair, nobody is suggesting that we should have proxy voting for women—I want to be very clear about that.

Mike Moffatt: That’s the practical problem here: any change like this takes power away from the powerful and gives it to the powerless. And who’s more powerless than children? If people are voting in their self-interest, why would they adopt an electoral system that increases the pool of voters and gives them less proportional say?

Cara Stern: To sum up this conversation, Baby boomers and older generations vote in much larger numbers than Millennials and Gen Z. As they age, this voting power means that our economy is being pulled in a direction where economic growth is deprioritized, and younger generations are suffering as a result.

Mike Moffatt: Proxy voting, where parents could represent their child by casting a vote in elections on their behalf, could lead to policies that better reflect the needs and wishes of Canada’s future generations and children, and make Canada a more representative democracy.

Cara Stern: But it’s probably not coming to a polling station near you anytime soon.

Thank you so much 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 the filmography of John Hughes, please send us an email at missingmiddlepodcast@gmail.com.

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

Additional Reading/Listening that Helped Inform the Episode:

Vlandas study

Tobi Lutke’s idea that pensioners be excluded from voting is offensive. The concern behind it isn’t

How to give children the vote

Citizenship as a privilege or as a right: should children be given the vote?

Should Children be Given the Vote?: Miles Corak at TEDxWaterloo 2013

Should children vote? I argue that there are reasonable ways to give children the vote in an interview with CBC radio

Why we should give children the vote

Do Husbands and Wives Pool Their Resources? Evidence from the United Kingdom Child Benefit

Brought to you by the Missing Middle Initiative

Sabrina Maddeaux and Mike Moffatt unpack the “last mile” infrastructure bottleneck stalling developments across the province, how historical energy policy created today’s friction, and practical policy fixes, from tax-exempt utility bonds to reforming the 90/10 tax rule, to keep the housing market moving.

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: Ontario has pledged to build 1.5 million new homes by 2031, which is now, if you can believe it, only five years away. It’s an ambitious goal that will be very difficult to achieve. Even if we could build that many new homes, could we also provide them with electricity?

Mike Moffatt: That’s a really big, important question. Ontario has a pretty big electricity infrastructure problem. We need to generate more power, but we also need to get that power to people, and the distribution side of that equation is often overlooked. It’s a massive system, and it’s in a lot of trouble.

Over the next 20 years, local utilities are facing a funding gap of roughly $100 billion to $120 billion just to upgrade things like poles, wires, substations, and switches. That’s becoming a real obstacle to building housing. In some areas, aging equipment and a lack of capacity mean that utilities simply can’t get enough power to new neighbourhoods.

Sabrina Maddeaux: That’s crazy, and something we definitely need to dig into. In this episode, we’ll answer the question: is Ontario’s electricity grid robust enough to meet today’s demand for new homes?

Sabrina Maddeaux: Both the federal and provincial governments have talked about Canada being an energy superpower. While the feds are building new pipelines, Ontario is putting a lot of money into the power grid.

Mike Moffatt: While those big infrastructure projects are extremely necessary and welcome, it’s actually not the big power corridors that are the most pressing problem in terms of building the number of new homes Ontario needs. It’s the last section where developers need to hook up to that expansive grid, called the “last mile.”

It’s that last mile where developers of new neighbourhoods are running into trouble. There’s a whole different set of issues to deal with in getting enough power to infill projects and existing neighbourhoods, which we’ll discuss in a future episode. For now, we’re just focusing on getting power to new homes in new neighbourhoods.

Sabrina Maddeaux: There’s a great example of this that The Globe and Mail highlighted recently, where a development in Brooklin, Ontario - just north of Whitby on the other side of the 407 - seems to have stalled because of the lack of ability to connect to the grid. The Globe reported that the local utility provider couldn’t connect 10,000 new homes without expanding its infrastructure, which would mean building two new low-voltage feeder lines from a transmission station in Whitby.

Mike Moffatt: This shows why it’s so difficult to build new housing. It’s an interrelated set of problems. Infrastructure gaps are just one reason why Ontario municipalities have struggled to meet their provincial housing start targets, but it’s one of many.

As of the latest data, Whitby has built less than half the homes they need to reach their provincial targets, and Ajax has built less than one-fifth; they’re 80% behind. Whitby and Ajax also happen to be smack in the middle of this electricity load capacity desert.

We’ll share the Ontario Energy Board map that highlights this, which is really telling. It shows the lack of capacity in this part of the province. If you’re listening on audio, you might want to check out the YouTube version, but we’ll also link to it in the show notes.

To be clear, there are a lot of reasons beyond electricity why these communities haven’t hit their provincial housing start targets, but given the Brooklin example, this electricity situation certainly isn’t helping.

Sabrina Maddeaux: What struck me about this story is how similar it is to the development fee issue. It all boils down to who pays for growth. The Brooklin project allegedly stalled because the developers felt they were being asked to pay super-high connection costs from the local utility, which would then need to be recouped through the price of the new homes. Those homes would therefore be too expensive in today’s market, and presumably, the project would no longer pencil out. You could say that the costs of upgrading the electricity system for the entire community blocked new people from becoming part of that same community.

Mike Moffatt: Absolutely.

It’s not just about the number of homes, though obviously that’s important. We also have to consider the changing nature of how we use electricity.

Otherwise, you run into the situation we often see in infill development, where the builder of a small multiplex might discover that they can either have EV charging stations or electric heat pumps, but they can’t have both simply because they can’t get access to enough electricity.

Sabrina Maddeaux: For historical context, I think it’s important for people to know that Ontario was built on cheap power, delivered as close to cost as possible. In many respects, fast, easy, and reliable access to plentiful electricity was the backbone of Ontario’s economy from the very start of electrification over 100 years ago.

We take it for granted today that you flip a switch and the lights go on, but creating the system to make that possible was no small job, and that’s a big part of Ontario’s history. This came up in a recent episode we did on the creation of big infrastructure projects and who pays for public debt, which we’ll link to in the show notes.

By 1920, the commission had bought up a number of key private competitors, giving it control over electricity generation in the Niagara region. This helped spur the expansion of manufacturing across the province, which was the backbone of economic growth for decades and made Southwestern Ontario a manufacturing powerhouse. You have to look at the philosophy behind that expansion: Sir Adam Beck’s vision wasn’t just about having lights in homes, though that was important; it was about treating electricity as a foundational utility, like a road or sewer system, built ahead of the need to unlock the province’s potential.

Sabrina Maddeaux: Right, it was an “if you build it, they will come” model. They knew that if you brought power to a region, industry, housing, and growth would naturally follow.

Mike Moffatt: Normally I’m the one who makes Gen X movie references, so congratulations on a Field of Dreams reference! I hope the audience caught that.

But you’re exactly right. Somewhere along the way, the model shifted. We moved from viewing electricity as a public utility, a system we invest in collectively to support the province’s future, to viewing it as a project cost that needs to be managed on a ledger. Now, when a developer wants to build, they’re being asked to front the capital for the entire last-mile connection. That creates massive friction, which we’ve seen in many communities. We’ve gone from building power to enabling growth to requiring growth to fund that power. That’s the mismatch that potentially stalled projects like the one in Brooklin.

Forecasting long-run demand for electricity is tricky because you’re having to forecast the growth of new technologies that consume electricity, as well as the growth or decline of entire sectors that use large amounts of electricity, like manufacturing. If you take a just-in-time approach and require users to pay for just the infrastructure they need at this moment, you risk under- or over-building the system. More likely, that manifests as under-building because you’re just building for today, not the future.

Sabrina Maddeaux: Right. This brings us back to the last-mile portion of this story. In Ontario, its typical local distribution companies (LDCs) are responsible for the electricity network in a particular area. Most are owned by either the province or municipalities; think Hydro One or Toronto Hydro. They’re the ones that deliver electricity to homes, businesses, and factories in their region. There are 57 electricity distributors in Ontario, but it’s a pretty concentrated industry, with almost 80% of distribution handled by just five providers. These are the companies that maintain the local poles, wires, transformers, and other equipment that take electricity from the transmission system and get it into your neighbourhood and into your house.

Mike Moffatt: That’s exactly where we’re running into issues with the potential lack of upkeep of the system and disputes about who’s going to pay for the infrastructure upgrades needed to build all the new housing our province desperately needs.

Sabrina Maddeaux: To sum up: on top of all the things we regularly talk about on The Missing Middle, like zoning, development charges, and the political will that impedes building homes, we can now add the last mile of the electrical grid to the list of things we need to work on. How do we fix this?

Mike Moffatt: This is just one more addition to a long list, but here are some ideas.

First, one of the big problems is raising enough low-cost capital, which is always the most challenging part of any infrastructure investment. The business model here is relatively simple: the utility invests, finances it - usually with debt - and pays off that debt from the revenue generated by increased electricity usage. But you need to get $100 billion to $120 billion to do that, so where does it come from?

When it comes to debt financing, utilities usually issue and sell bonds, just like governments do. But you have to figure out how to make those bonds attractive enough so investors will buy them. You could offer a massive rate of interest, but that’s expensive and makes electricity more costly for consumers than we’d want, so that’s not a solution. We have to figure out how to do this without jacking up interest rates.

When it comes to raising equity, there’s a rule in Canada’s Income Tax Act that a municipal service corporation, like Hydro Ottawa, must have at least 90% of its shares owned by a municipality and earn at least 90% of its income within its municipal boundaries. That makes it really hard to attract equity capital. If they loosened the so-called 90/10 rule to something like 80/20 or 70/30, it could attract a lot of much-needed capital to make those infrastructure investments.

Sabrina Maddeaux: That makes a lot of sense to me and seems like a relatively easy fix without any obvious unintended consequences. Municipalities would still maintain majority control while making it more attractive to investors.

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 famous people from London, Ontario, and the high schools named after them, please send us an email at missingmiddlepodcast@gmail.com.

Sabrina Maddeaux: We’ll see you next time.

Additional Reading/Listening that Helped Inform the Episode:

North America’s electricity grid is ready to grow. Manufacturers needed to build it are placing their bets

Electrical Load map

Debt/Deficit episode referred in video:

Why a multibillion-dollar electricity infrastructure gap is threatening Ontario’s housing goals

Tracking housing supply progress

Ontario Launches Expert Panel to Strengthen Local Electricity Distribution

2025 Ontario Economic Outlook and Fiscal Review

Adam Beck

Build Faster Fund

An early history of hydroelectric power in Niagara Falls

Ontario’s electric history

To Build More Homes, Ontario Launching Building Faster Fund and Expanding Strong Mayor Powers

Funded by the Neptis Foundation

Brought to you by the Missing Middle Initiative

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: If you drive through some of the most populated parts of Canada, like Southern Ontario around the GTA, you start to notice a trend. It’s hard to find a single detached home built in the last 15 years that isn’t absolutely massive. You will see smaller homes like townhomes, and we all know how many shoebox condos popped up in the last couple of decades. But there’s a real absence of small detached homes, raising the obvious question: Are we just imagining this, or have small detached homes really gone extinct?

Mike Moffatt: You’re not imagining it at all. There are parts of the country where you still see a fair bit of size diversity when it comes to ground-oriented homes—single detached, semi-detached, townhomes, things like that. But in much of Southern Ontario, small detached homes have gone extinct. That really didn’t happen all that long ago; it has been in the last 15 years or so that we’ve stopped building them.

Sabrina Maddeaux: Right. It’s a bit strange on the surface given how much shrinkflation is going on in our economy today and how high-rise condo units keep getting smaller and smaller. But when it comes to detached homes, they’re mostly massive and haven’t shrunk down at all.

Mike Moffatt: It really is counterintuitive that while everything else in our economy gets smaller, detached homes seem to get larger. Most of what’s going on is not so much that small detached homes have become big detached homes, but rather that we’ve continued to build the big ones like we always have. Those small detached homes have either been replaced by townhomes, high-rise condo units, or in many cases, nothing. It’s not so much that things are going up in size, but those small detached homes have shrunk in size to the point where they’re no longer detached homes.

Sabrina Maddeaux: That leads to another obvious question: Why don’t developers build those homes anymore? Clearly people want them, and there is a market for them, but developers simply aren’t building them. Why?

Mike Moffatt: It really isn’t a lack of demand. I know so many young, middle-class people who would kill for one of those homes, but they’re not being made. That seems like a bit of a paradox.

To give you the long answer, we’ve got to look into the data and examine each individual cost.

Sabrina Maddeaux: The Missing Middle initiative has been doing a fair bit of work lately drilling down on the cost of homebuilding, which differs by housing type and community. You’ve got an example for us today.

Mike Moffatt: We have a fair bit of cost data on building family-sized homes in smaller communities near Ottawa. Not within the city itself, but nearby, we’ve got detailed information down to the price of roofing shingles for a variety of home types, from townhomes to detached, both small and large.

Over the next few minutes, we’ll use this data to show why it’s hard to build a small detached home. To be clear, the Ottawa market is still a place where it’s somewhat feasible, but even in a somewhat affordable market like Ottawa, it’s really tough. Trying to do it in the broken housing economics of the GTA is just not viable. But we can show why, even around the city of Ottawa, it’s difficult to build a small detached home.

Sabrina Maddeaux: What do these homes look like, and how much do they cost?

Mike Moffatt: As a warning, this is an episode where we throw a lot of numbers at you. I wish that wasn’t necessary, but it’s unavoidable. We’re going to limit this as much as possible and focus on the big picture.

When we look at this Ottawa area data, it includes all kinds of family homes: townhomes, duplexes, and detached homes, including single detached under 1,500 square feet, which really aren’t getting built in much of Southern Ontario.

Price-wise, we’re talking about detached homes in the market of about $600,000 on the low end to $1.1 million on the high end, ranging from about 1,200 square feet to 3,000 square feet. The profit margin right now is just large enough so that a bank will give a builder a construction loan. Developers are making money, but not hand over fist because it’s not a great market right now. Even so, we’re still talking $600,000 for a detached home, making it hard for young middle-class families to get into the market.

To understand why these homes cost so much and why developers favour large homes, we’re going to break down the costs of homebuilding one by one. Sabrina, I’ll let you take the lead on this.

Sabrina Maddeaux: The first thing you need to build a single-family home is the land, obviously. For a fully serviced lot outside of Ottawa, the ballpark figure is $6,000 for every foot of lot width. That means a 30-foot-wide lot would cost around $180,000, although actual prices vary greatly based on market conditions and location.

Mike Moffatt: You used a really important term there: “fully serviced lot.” It’s not just the raw cost of land paid to a farmer, but also the cost to bring direct access to utilities, roads, sewer, electrical, and streetlights. Both the land and servicing costs are proportional to the size of the lot, not the size of the house. At $6,000 per foot of lot width, you’re looking at $240,000 for a 40-foot lot or $180,000 for a 30-foot lot. This is one of the reasons townhomes have become so popular: because they’re side by side, individual lots are much narrower. Shrinking that land footprint to 20 feet saves about $100,000 relative to a detached home. That can make the difference in whether someone qualifies for a mortgage.

Sabrina Maddeaux: $180,000 feels really expensive given that it’s just the land and we haven’t even put a shovel in the ground yet.

Sabrina Maddeaux: A bigger detached house is going to require more land than a smaller one, though. So land getting more expensive shouldn’t necessarily give a cost advantage to building McMansions—or should it?

Mike Moffatt: That’s the conventional wisdom: bigger house, bigger land, so it should all even out. But that’s not entirely true. First, many municipalities have minimum lot width rules for detached homes. Even if your design only needs 25 feet, you might be required to build on something larger, forcing you to pay for land you don’t necessarily need. You can’t build a really small home on a really small lot in many places. The more important issue is side setbacks, the area between the edge of the house and the edge of the lot.

Say you need five feet on either side; that’s 10 feet of width you can’t build on. If you have a 30-foot-wide lot, you only have 20 feet of usable building space, two-thirds of the total width. On a 40-foot lot, you can build 30 feet wide, taking usable space up to three-quarters. You get more bang for your buck on land costs. When land prices are as high as they are now, this dynamic matters because developers would rather utilize three-quarters of the lot width than two-thirds.

Sabrina Maddeaux: How do we get the price of serviced land back down?

Mike Moffatt: Most of it has to do with creating more competition for development land. It’s about being realistic about urban growth boundaries and population growth so land prices don’t skyrocket. It’s also about allowing more options on existing land, like building multiplexes or residential over commercial. It boils down to supply and demand for land. Governments impact both sides of that equation, and for the last 20 years, they’ve limited supply while increasing demand. It’s no wonder land prices have gone through the roof.

Sabrina Maddeaux: Let’s get back to adding up costs. Next, you have soft costs and site overhead costs. These include development charges, legal fees, engineering fees, portable toilets, and office salaries. Your data shows these add anywhere from $100,000 to $130,000 to the cost of a detached home outside Ottawa. Is that right?

Sabrina Maddeaux: That obviously encourages building a larger home. Why wouldn’t you? If you can build a bigger home and get more money for it while development charges stay the same, it makes complete sense.

Mike Moffatt: Exactly. The tax doesn’t grow proportionally to the size of the home. Imagine if sales tax on cars worked that way. If HST on a new car were a flat $5,000, whether you bought a Hyundai Elantra or a Rolls-Royce. That would obviously encourage buyers to spend a bit more and buy something nicer because there’s no additional tax burden.

Sabrina Maddeaux: It would be super regressive, since middle-class families would pay a higher percentage of tax on their purchase than the rich. What about the other costs in this category? Do those change much depending on the size of the home?

Mike Moffatt: They really don’t. Closing costs and architecture costs are roughly the same. In some communities, building permits are charged by the square foot, so those go up slightly, but we’re only talking about a few hundred dollars. For the most part, it’s a fixed cost that doesn’t grow proportionally with the size of the home.

Sabrina Maddeaux: So soft costs also favour building McMansions. How do we fix that?

Mike Moffatt: The obvious place to start is by addressing development charges. We’ve put out research on ways to reduce those and how to exempt development charges from HST to avoid double taxation.

Sabrina Maddeaux: Let’s review what we have so far to build our detached home outside Ottawa. Land, site overhead, and soft costs (including development charges) bring us up to $300,000, and we haven’t even built anything yet.

Next are construction costs, which include the house, driveway, and landscaping. Unlike other costs, these grow proportionally with the size of the house. However, a home twice as large doesn’t double construction costs. Why is that?

Mike Moffatt: Think of it this way: a home twice as big doesn’t require buying twice as much of everything. You don’t buy two furnaces or two water heaters; you buy larger ones, which aren’t twice as expensive. There are economies of scale.

Much of what you buy with a bigger home is floor space rather than additional items. Actual costs depend on finish quality; if you want solid gold toilets, it costs more. For a 1,500-square-foot home, construction costs run around $300,000. For a 3,000-square-foot home, twice as large, costs go up to about $450,000. That’s a 50% increase, not a 100% double.

Sabrina Maddeaux: So for a smaller home, the land, soft costs, and site overhead might total more than the actual construction cost of the home.

Plus, there are additional fixed costs: construction loan interest, land carrying costs, financing, property taxes paid during construction, warranty expenses, and a 2% to 3% contingency buffer for material price spikes. That adds another $30,000, which also doesn’t scale with house size.

Sabrina Maddeaux: You’ve left out something pretty important, though, and that’s profit. Developers aren’t charities.

Mike Moffatt: We can’t forget profit. In current Ottawa market conditions, there is about $60,000 to $100,000 built in, depending on home size. At a consistent percentage margin, larger homes yield higher total dollar profits, keeping developer returns in that $60,000 to $100,000 range.

Sabrina Maddeaux: Have we got it all yet?

Sabrina Maddeaux: This is probably more than anyone ever needed to know about why homes are so expensive, but it really explains why project economics favour building McMansions.

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

Mike Moffatt: If you have any thoughts or questions about the price of a solid gold toilet, send us an email at missingmiddlepodcast@gmail.com.

Sabrina Maddeaux: We’ll see you next time.

Additional Reading/Listening that Helped Inform the Episode:

Development Feasibility Analysis: Updated Methodology and Baseline Findings

Funded by the Neptis Foundation

Brought to you by the Missing Middle Initiative

Cara Stern and Mike Moffatt examine how housing costs, education, careers, and other pressures are reshaping when Canadians start families, and what that means for healthcare and public policy.

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 sometimes feels like everyone I know is struggling to start a family. I’m just past the age where all my friends were getting married, and I kind of expected everyone to have kids by now, but for many, that hasn’t happened yet. For the ones where it has, it feels like most have needed fertility treatments to get pregnant—including me.

My mom tells me this is something new. She says in her generation, sure, some people struggled, but it was way less common. Most people just tried to have a kid or didn’t try, and they just had one. It made me want to start looking into it, and that made me realize that starting a family looks very different now than it did a generation or two ago. People are spending more years in school, building careers, paying off student debt, and taking longer and longer to afford a home before having kids. By the time many people feel they’re ready, they’re older, and that can come with a whole new set of challenges and costs.

Mike Moffatt: Those costs aren’t trivial. Globally, in vitro fertilization, or IVF, is a $40 billion CAD a year industry, with those costs being split between families, insurance companies, and governments. Speaking of governments, last April, the Government of Ontario announced a $250 million investment in expanding access to IVF across the province. The societal shift to families having children later in life has real economic consequences.

Mike Moffatt: We went and pulled the national numbers, and it turns out it’s not just a “Cara and her friends” problem—fertility treatment usage is way up. In Canada, IVF births in Ontario went from 1.7% of all live births in 2014 up to a full 3% in 2023, according to the Canadian Assisted Reproductive Technologies Register, which tracks all of the fertility clinics in Canada. Of course, Ontario is not all of Canada, but it’s actually where most of the country’s fertility clinics are.

Cara Stern: When I read those numbers, my first thought was that the jump could just mean the science is getting better—like maybe the same number of people are using IVF, but the clinics have gotten way more successful at turning those cycles into actual babies. But it turns out that’s not true. Success rates per cycle have actually stayed relatively flat over the last decade, roughly 37% per cycle, though other factors have changed.

Part of that is because we’re fighting a war against biology: as technology gets better, the average patient age goes up, keeping success rates relatively stable. The real growth is in the sheer volume of people walking through the clinic doors. I do want to point out here that IVF is only one form of fertility treatment you can get, but it’s where we get the best numbers, which is why we’re talking so much about it in this episode.

Cara Stern: Obviously, there was a drop during the pandemic because many clinics had to reduce their services due to regulations and restrictions. I’m not surprised there was a big jump afterwards to over 20,000 with people trying to catch up on lost time, but it has actually stayed and grown since then.

I did wonder why so much of the data I was finding was so Toronto-centric. I know we feel like we’re the centre of the universe, but I also know that’s not true. It turns out that of the 36 clinics that operated last year in Canada, half of them are in the Greater Golden Horseshoe—within 90 minutes or so of Toronto, depending on traffic. By contrast, there were only two serving all of the Maritimes until this year, when a new one opened in Newfoundland.

Mike Moffatt: There’s a real geographic lottery here, and it actually goes beyond where the clinics are located because the range of services covered differs from province to province. In Ontario, for example, you get one funded IVF cycle. British Columbia just launched their program last year with variable funding depending on household income. In Saskatchewan, a tax credit was recently introduced, whereas in Alberta you don’t get anything—they recently launched a plan to cover fertility treatments, but only for cancer patients. So there’s a real, uneven playing field. Quebec actually has the most support, which might not be surprising given that they’re more generous on parental leave and childcare: they cover a full cycle, as well as medication and embryo storage for up to a year.

Cara Stern: Let’s dig into the why. This is really an extension of everything we’ve said on this podcast about people starting families later than they used to. The age numbers alone tell a lot of the story. The average age of a mom at the time of her baby’s birth was 31.8 in Canada, based on StatsCan’s latest data, and no province is below 30. B.C. was almost at 33. If we zoom in and look at just the age of moms at their firstborn’s birth, the average age was just over 30 years old—higher in B.C. and Ontario. I suspect if you look even closer, we’ll find it’s even higher in cities than in more rural regions.

It matters here specifically because you can delay a lot of things in life—like starting your first job or buying your first house—but you can’t delay biology. Fertility drops off meaningfully after 35. So when you push the average age that far back compared to what people did historically, of course you’re going to get more people who need help conceiving.

Mike Moffatt: That changes who actually goes to the clinics. If you walked into a Canadian fertility clinic 30 years ago, the average patient was around 31 years old. Today, the average age of someone starting an IVF cycle has climbed past 35.5, pushing toward 36. People 35 and older now make up 60% of all the cycles in the country.

Cara Stern: I sometimes hear people talk about celebrities who have kids well into their 40s, and that’s seen as proof that you can take control of your own timeline and don’t need to rush to have kids under 40. But I really want people to understand that’s not something you should count on. Science and lots of money were almost certainly used for most of them—whether or not they talk about it—probably with eggs they froze when they were younger if they had the money early enough and knew they had extreme career ambition. On top of that, they have access to the best treatments money can buy. The biological cliff after 35 or 40 is still the same as it’s always been. Even though treatments can help a little bit, it makes for a long, expensive, emotional, and stressful situation—and it often doesn’t even work.

Mike Moffatt: Even when it does work, if we’re having kids later and then they’re having kids later, I think about how I might not have grandkids until I’m about 80! The experience I’m probably going to have as a grandparent is going to be very different from past generations. All of these milestones getting pushed back makes a real difference.

Cara Stern: It’s not just an age story, though—clinics are seeing more patients in their 20s and early 30s. These aren’t necessarily people who waited too long, but they’re still struggling. We’re seeing a rise in diagnoses that complicate conceiving, and clinicians don’t fully understand why yet, though researchers are looking at environmental factors and metabolic health.

The silver lining is that younger patients usually have better egg quality, so their success rates per cycle are higher. But it still makes the cost of having a kid incredibly high even before you actually have a baby, which is when a lot of people think the expense should start. That’s not including the impact on your career and life, because you have to show up for regular early-morning appointments or miss work for treatment. It has a big impact when you’re doing treatments, no matter what age you are.

Cara Stern: The good news is we’ve seen big changes in fertility coverage over the past decade, which has made it more accessible to people who could never afford it before. These cycles aren’t cheap—a cycle can cost something like $10,000 to $15,000 in Ontario, plus another $5,000 to $10,000 on medication, and more if you’re paying for genetic testing or embryo storage.

Nowadays, many provinces have a round of procedures covered, a budget you can use funded by the province, or a tax credit. But like so many other things, if you’re not paying with money, you’re paying with time: waitlists can be brutal in provinces where it is covered.

Mike Moffatt: Exactly. This shows the macro effect of all the societal changes that have delayed childbirth, which then impacts our health insurance systems. Right now in Ontario, 30% of patients wait under six months for publicly funded IVF, another 30% wait six months to a year, and 10% wait longer than 18 months. Some of these waitlists can get pretty long.

Cara Stern: That’s a big problem. It’s not just the annoyance and inconvenience of not being able to get started when you want to; with fertility, time is such a big part of the story. An 18-month wait for someone already in their late 30s can be the difference between a viable cycle and permanent infertility.

Mike Moffatt: As a 49-year-old, I can tell you that your 30s go by pretty quickly, so that 18 months really makes a difference.

Cara Stern: Each clinic has its own waitlist in Ontario, too. I know someone who travelled to Toronto from Ottawa for their treatment because the wait times at the one fertility clinic in Ottawa were so long, whereas in Toronto they found shorter wait times. But that obviously expands the cost because they have to pay for travel, time off work, or figure out how to work remotely if they’re lucky.

Mike Moffatt: When we talk about the expense of this, it’s easy to over-focus on just the immediate financial costs that show up on a bill. But the time off, travel time, and so on make this incredibly expensive—not just for the people undergoing it, but for society as a whole. If you’re spending all your time driving between Ottawa and Toronto, that’s time you’re not at work or doing something else. It affects all of us.

Cara Stern: Yeah, and it’s not like you go in for the day, do your treatment, and that’s it—it’s a process that takes many weeks. Even once you’re at the top of the waitlist, there can still be a lot of waiting. In fact, I always describe fertility treatment as being a lot of waiting, followed by “go, go, go,” but most of it is actually just waiting.

There’s a benefits plan angle to these increased numbers that I found quite interesting: claims for fertility medications at workplaces rose 21% over the last five years, according to Manulife. Yet, fewer than 1% of workplace plans actually cover the treatment itself, which is the most expensive part—especially if you live somewhere in this country without funded cycles or if you’ve used up your provincial coverage and it didn’t work.

At the same time, we’re seeing an increase in workplace benefit coverage amounts and in who is able to access it. Over time, the net has widened for people wanting fertility treatments who may not have a medical need, but want to become a single parent, are part of a same-sex couple, or need egg or sperm donations to make it work.

Mike Moffatt: I expect this is only going to grow over time simply because the pressures leading to increased IVF usage don’t seem to be going away.

To recap: the number of people accessing fertility treatments has increased dramatically over the past couple of decades. It’s happening because of the intersection of people intentionally starting families later in life, an expanding definition of who gets to build a family, provinces slowly opening the funding taps to make these procedures accessible to the masses, and people in their 20s and early 30s needing these treatments more than they used to. As demand explodes, our healthcare infrastructure is struggling to keep up—between the geographic lottery of where you live, gaps in corporate insurance, and the biological reality that time waits for no one, I suspect fertility treatments are going to continue increasing in Canada for the foreseeable future.

Mike Moffatt: I think you’re right. We are going to see a policy response where provinces try to increase access and address waitlist issues and expenses. But policymakers also need to take a step back and look at the macro issues around why young people are having to wait until their late 30s to have a kid. I really see a lot of this as a housing issue and a jobs issue—people starting their careers later, expectations around staying in higher education longer, and so on. Policymakers need to look at this not just through the narrow lens of IVF policy, but by taking a step back to ask why so many people are having kids later in life, and addressing the barriers preventing them from having children earlier.

Cara Stern: Thank you so much 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 my favourite Nirvana album, 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:

Publicly funded in-vitro fertilization (IVF) program - Province of British Columbia

Canadian assisted reproductive technologies registry CARTR PLUs annual report

CARTR Reports - Canadian Fertility & Andrology Society

Provincial coverage | Fertility Matters Canada

Ontario Connecting More Families to Fertility Supports

Global In Vitro Fertilization (IVF) Market Size, Share, Growth Analysis Report - Forecast 2034

They examine the difference between “pocketbook” politics and broader economic growth, and ask what happens when more voters feel they have little personal stake in a growing economy. The result could be a more zero-sum political culture, rising support for radical change, and growing tension between older and younger generations.

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: Twitter isn’t the real world, but it occasionally bleeds into it. Recently, a tweet went viral arguing that voting should be limited to working-age people in order to ensure decisions are made by “people with a stake in the future.”

Mike, I saw your recent piece in The Globe and Mail on this. You were super clear that you completely disagree with the idea, but you did think it highlights a bigger issue in Canada that we’re just not talking about. Can you break that down for us? Because your headline was that the idea of pensioners being excluded from voting is offensive, but the concern behind it isn’t.

Mike Moffatt: Absolutely. As the title of the article states, the idea that pensioners being excluded from voting is offensive to me, but I understand the concern behind it.

The first voting rights tweet that went viral - and to be clear, there were a few - was in the context of a public hearing in San Francisco on two mid-rise apartment proposals, a 22-story and an 18-story building. We know that in San Francisco, the middle class has been completely priced out of the city, even though high-income young tech workers make a lot of money. They still can’t afford to live there. Despite that, a large number of existing residents, who on average are substantially older, were actively trying to stop this development. To be clear, the folks opposing this development have every right to do so. People are allowed to have and express their opinions. But there’s also merit to the idea that bad things can happen to the politics of a country or a community when a critical mass of voters feel, rightly or wrongly, that they have no stake in either economic or infrastructure growth.

My politics lean centre-left, and I see this happening in both small-l and big-L liberal politics. Take one of our favourite examples: Old Age Security. Because of the aging population, OAS is taking up an increasing share of the federal budget each year, reaching about $100 billion annually. You would think that governments would look at that price tag and how fast it’s rising and go, “We’ve really got to scale this back, or otherwise it’s going to consume us whole and break our finances.”

To be fair, the Harper government actually tried to do that about 15 years ago by changing the cutoff age and reducing the size of the program. Instead, the Trudeau government went in the opposite direction. They made OAS more generous by giving a top-up to those aged 75 and up, adding about $3 billion to this already ultra-expensive program. That $3 billion is money that could be used to invest in infrastructure and things to grow the economy, but instead it’s being used for consumption simply because it’s politically popular. So I worry about these things.

Now, your politics are more conservative than mine. You’re more on the centre-right. Are you seeing those dynamics play out on your side of the aisle?

Sabrina Maddeaux: Absolutely. I think it’s affecting every stripe of political party because demographics don’t change across the aisle. The Conservative Party is definitely still figuring out its own generational dynamics within the so-called “Big Blue Tent.”

Historically, people think of social conservatives, fiscal conservatives, Alberta conservatives, Saskatchewan conservatives, and East Coast or Toronto ones. But the interesting divide that has emerged over the last five years is between older conservatives and younger conservatives, and they have very different views and priorities.

It will be really interesting if the leadership ever shifts before the next election, and how that plays out in a potential contest, because there will be a big divide there. It’s made it difficult to bring forward big, bold economic policy because there’s an inherent tension between catering toward a younger demographic that wants to disrupt the system, versus older conservatives who turn out to vote more and are more comfortable with minor change or keeping the status quo.

Mike Moffatt: I get that sense as well - that this crosses ideological and partisan lines. In any political movement, there have always been divides, like urban versus rural or regional differences. But it really seems like we are getting a deeper age divide in our politics that cuts across all parties.

Sabrina Maddeaux: For sure. It’s almost less about Conservative versus Liberal versus NDP than whether you are a Millennial, Gen Z, or a Baby Boomer. That’s the primary divide these days.

Mike Moffatt: And once again, we’re left out. Gen X.

Sabrina Maddeaux: You’re left out! Sorry, didn’t mention you.

Mike Moffatt: We’re used to it. It’s okay.

Sabrina Maddeaux: Now, people vote for a candidate or party for any number of reasons. But one of the most reliable indicators of who will win a U.S. presidential election is the polling question: “Which candidate would you like to have a beer with?” When it comes to voters who vote on issues, those are usually divided into economic issues and social issues. Your Globe piece makes the case that there are actually two kinds of economic issues, and the distinction between them matters. Why is that?

Mike Moffatt: There’s a fair bit of research to back this up. The piece argues that this distinction matters because there are different types of voting behaviour.

Sabrina Maddeaux: So the distinction is between economic issues that grow the size of the pie versus those about how the slices are distributed.

Mike Moffatt: Exactly. That is the key distinction.

To be clear, economic issues aren’t binary; it’s not like someone votes 100% sociotropically or 100% on pocketbook issues; rather, we exist on a spectrum. But what happens over time is that people shift categories.

The research shows that when a growing cohort of the population believes, rightly or wrongly, that economic growth doesn’t benefit them, they shift from voting on sociotropic issues to pocketbook issues. To use your analogy, they vote to get a bigger piece of the pie for themselves rather than voting to make the pie larger for everyone. My piece argued that this cohort includes pensioners, who are more likely than the general population to be pocketbook voters.

Sabrina Maddeaux: We’re definitely seeing that trend in Canada. Combining a growing pensioner demographic with high asset prices and home equity creates a mentality of: “We don’t have to worry about economic growth or creating jobs, because a huge portion of voters don’t depend on employment income.” They feel comforted by asset prices and don’t have the same stake in growing the economy. Meanwhile, younger people are pro-disruption and pro-change because they don’t have the comfort of those asset prices or traditional pensions.

We’ve seen that impact views on U.S.-Canada relations as well. Polling shows older voters are much more in favour of an “elbows up” approach, sticking it to the U.S., whereas younger Canadians just want jobs and economic growth.

Mike Moffatt: It really does. It’s much easier to say: “Let’s close the border, stick it to the Americans, and if unemployment goes up 15%, so what?” if you’re not a working-age person.

Sabrina Maddeaux: The idea that adults shift into becoming pocketbook voters as they age makes intuitive sense, and we can come up with endless anecdotes supporting it. But is there empirical evidence that it’s true?

They are more likely to support an “elbows up” approach, sticking it to the Americans, even if it causes higher unemployment. Because of that tradeoff, governments prioritize keeping inflation low over investing in future growth. Vlandas finds that these policy shifts actually cause overall economic growth to slow down.

Sabrina Maddeaux: We see that even in tax policy, where older generations receive more favourable terms even as they get larger government payouts. We also see it in the focus on keeping home prices high. The Liberal housing minister even stated home prices shouldn’t come down, despite the obvious need for affordability.

Mike Moffatt: We might not have a housing minister making comments like that if our population skewed younger. Vlandas directly notes in his paper that as the share of elderly voters increases, parties focus more on keeping inflation down and house prices up, since this matters more to the elderly. There is peer-reviewed science showing this isn’t just youth conjecture, but an observed phenomenon.

Sabrina Maddeaux: You take it a step further and argue that it’s not just seniors becoming disconnected from economic growth, but also working-age folks who feel left behind and would rather see the pie redistributed than worry about growing it.

Mike Moffatt: Exactly. This isn’t isolated to seniors. There are times when working-age populations become disconnected from economic growth.

I had a lightbulb moment during Brexit a decade ago. I watched a BBC interview with two men in their late 50s in a northern English town who voted for Brexit. The reporter asked, “Aren’t you worried about the economic consequences? Markets went down this morning, and companies might struggle.” These guys just laughed and said, “Oh no, a bunch of rich people lost money! I’m going to lose so much sleep over that.” They viewed an economic slowdown as a positive thing because they believed growth only flows to the top 1%. Their mindset was, “If we want to stick it to the 1%, we slow the economy.” When people feel disconnected from growth, they focus entirely on how the pie is sliced.

Sabrina Maddeaux: That trend has only grown since then. It starts with a lack of faith in institutions that feel rigged against you in favour of a different demographic. Polling in Canada and the U.S. shows support among young people for capitalism, and even democracy, is shockingly low. You see the rise of more radical politics because young people feel the system is actively working against them. They think, “Why not tear down the system or assert authoritarian control if that’s what it takes to own a home and raise a family?” It leads to radicalization, anger, and disillusionment.

Sabrina Maddeaux: It’s not strictly left versus right for young people; they just want massive change. A mistake Conservatives have made is assuming young voters shifting toward them in polling meant they became Conservative for life. They just wanted big change. They could easily switch to the NDP or other parties if a radical message appeals to them. Voting patterns are fundamentally different than in prior generations. That’s why younger voters need a real stake in the economy, capitalism, and democracy, so they can buy a home, start a business, and raise a family. Otherwise, there will be massive ripple effects as Millennials and Gen Z age into higher voter turnouts.

Mike Moffatt: There’s a horseshoe theory dynamic where people are attracted to extremes rather than traditional left-versus-right divides.

In recent German elections, young people voted heavily for the far-left or far-right because they believe the system isn’t working for them. If we want to avoid electing politicians intent on breaking the system, we have to make the system work for younger people. If only for self-preservation, older generations need to help build a functional system for younger people, or the country will face severe political consequences.

Sabrina Maddeaux: Absolutely. Thank you, everyone, for watching and listening, and thanks to our producer Meredith Martin and our editor Sean Foreman.

Mike Moffatt: If you have thoughts or questions about how Gen X is always left out—and you probably don’t, because Gen X is always left out—please email us at missingmiddlepodcast@gmail.com.

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

Additional Reading/Listening that Helped Inform the Episode:

Beer question

Vlandas study

German research

Tobi Lutke’s idea that pensioners be excluded from voting is offensive. The concern behind it isn’t

Funded by the Neptis Foundation

Brought to you by the Missing Middle Initiative

Cara Stern and Mike Moffatt explore how smaller-scale infill, form-based zoning, and streamlined condo rules could create more family-friendly housing while addressing concerns about height, parking, infrastructure, and neighbourhood character. They discuss the battles over multiplexes in Toronto and Calgary, and why standardizing zoning rules could make it easier to build more homes across Canada.

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 population growth is experiencing a temporary pause, but it is set to resume in 2028, when the number of non-permanent residents plateaus. This, along with pent-up demand from a generation of young people who have been locked out of the housing market, drives the need for more family-friendly housing. Building additional housing in existing neighbourhoods has long been seen as part of the solution. Still, strong local opposition has really made it challenging to build the quantity of homes needed to address the shortage.

Mike Moffatt: Cities have followed three basic paths to allow for more housing to be built. First, they can build out, which many have been hesitant to do over the last couple of decades on both environmental grounds and the cost of building new infrastructure. Second, they can build way up by allowing taller and taller apartment buildings downtown, which cities have done, and this has helped—but the economics and layouts of high-rises make them unable to fill every family need. Or, they can add housing to existing neighbourhoods, which often ends up in an acrimonious political fight.

Cara Stern: The idea behind gentle density is to allow for housing to be added to existing neighbourhoods in a way that reduces local opposition, so it focuses on smaller housing forms such as secondary suites and tiny homes, among others, to create more housing options—particularly ones that work for families.

Mike Moffatt: We wrote a report about this a few months ago called Cornerstone to Capstone, with support from our friends at the Cornerstone Association of Realtors, and we’ll link to that report in the show notes. We were motivated to write the report on how to make it easier to build infill housing because, these days, it’s hard to scroll through housing news without seeing some new dispute about infill. For example, a few weeks ago in our group chat, we were discussing one of those projects, which is an eightplex on Station Road in Toronto. Now, I’m in Ottawa, but Cara, you’re in Toronto—that’s your neck of the woods. What’s going on with that dispute?

Cara Stern: There are lots of multiplexes that have caused controversy in Toronto. The City of Toronto famously agreed to allow sixplexes right across the city as part of their agreement with the federal government under the Housing Accelerator Fund, but then they backtracked on that deal and only allowed it in nine wards. Sometimes plans come up where someone says, “We want to build this kind of multiplex in this area,” and even if it fits what the city says they want, there often is local opposition.

The one on Station Road is in Etobicoke. They approved it as a fourplex, and the developer built the base of the home as a fourplex. Then partway through construction, the developer said something like, “Actually, we want to change this to an eightplex, but we’re not going to change how big the home is or how much of the lot it takes up.” It’s going to be the same footprint, but changed from four to eight units, and that caused a lot of controversy. A lot of local neighbours were not happy with it. They’re going from 11 bedrooms to 13 bedrooms, so when you think of how many more people it will be or how much denser it will be, it’s not a ton. It means smaller units, which changes who lives there. That shouldn’t really affect neighbourhood support in my mind, but obviously it does—people look at family-sized homes differently than they do one-bedroom units.

The main thing people are upset about with this one is that they see it as a bit of a bait-and-switch. They see it as, “Look, they got approved under the fourplex as-of-right, but they always intended it to be an eightplex.” That’s the allegation. I don’t know if that’s the case—the developer says that is not the case and that they’re responding to changes in the market, but that’s what’s happening there.

It is really close to Mimico GO station, so it’s one where you think, “Well, we should have density around a train station.” It’s a very good train station where you can get to downtown Toronto really quickly, and it comes fairly often as far as GO trains go. But I think it caused controversy really because of how much they changed from the proposal. It’s also a weird one where you look at it and they’re taking up almost the entire lot, so I understand the neighbours’ frustration, even if I feel like we need more homes, that more homes are good.

Mike Moffatt: We’re seeing these fights play out all over the country, sometimes at the individual project level, but sometimes at the citywide zoning level. We had a similar situation in Calgary where, in 2024, city council enacted citywide upzoning, in part to comply with their Housing Accelerator Fund agreement. That upzoning really didn’t sit well with many residents, so after the 2025 municipal election, the new council decided to roll back those rules. The vote wasn’t even close—12 members voted to repeal the blanket rezoning, and only three wanted to retain the upzoning rules. As the City of Calgary pulls back on it, that’s going to lead to less infill housing, and it’s also probably going to lead to the city losing some of its funding from the federal government, though it’s not quite clear how that’s going to play out yet.

Cara Stern: It’s weird because the idea behind gentle density is that you would reduce opposition. People often get upset if a big high-rise is going up in their neighbourhood—of course, I understand that. There’s one at Pape and Danforth in Toronto where the new subway interchange will be, and it’s so much bigger than anything there. People get upset about that. I can understand that when people think about their homes and then think, “Oh, I’m going to be near a high-rise,” why that gives them a visceral response, even if it’s just an initial response before they think about whether it makes sense.

When you think about gentle density, the whole point is that this is so minor that neighbours shouldn’t really complain, but they still do. The Station Road project is a bit of a weird example because of the process it went through, but we have an episode on one on Craven Road in the east end of Toronto that was just about garden suites, and neighbours were still upset about garden suites. You can look around at all the multiplex applications in the city, and you’ll often find neighbours getting really upset.

So I’m going to give you some of the common objections to intensification, and, Mike, can you walk me through how gentle density reduces these objections?

Mike Moffatt: Absolutely, let’s do this.

Cara Stern: The first objection we have is that intensification allows buildings to be too tall, causing them to be out of proportion with the rest of the neighbourhood.

Mike Moffatt: I hear this a lot. Low-rise neighbourhoods already have height limits, though those can be uneven across neighbourhoods or even within the same neighbourhood. In my neighbourhood here in Ottawa, there are parts that have a height limit of 10 meters and parts that have 11 meters, and even on the same street, there’s an invisible line creating these disparities. What gentle density does is retain height limits in this general range, but it standardizes them through something called form-based zoning so you don’t get uneven height limits all over the place.

Cara Stern: How does form-based zoning work?

Mike Moffatt: In a typical community, zoning rules for low-rise neighbourhoods lay out a set of rules around how tall buildings can be, how you measure the height of a building (because there are a bunch of different ways of doing it), how large a home can be, what the setbacks are, and so on. But for a lot of those rules, the building code essentially does the same thing. In Canada, building codes distinguish between large buildings, which are governed by Part 3 of the code, and small buildings, which are governed by Part 9. A typical suburban house is governed by Part 9, which has height and size limits on that structure.

Cara Stern: What is the height limit?

Mike Moffatt: It’s pretty much the same as my neighbourhood in Ottawa—essentially three stories, which gets you into that 11-meter range. But if you think about it, it’s kind of weird that there are two sets of rules for height for a low-rise building: one set in the building code and another set in zoning. Not only are they different, but they can actually measure height differently, creating a lot of red tape for no good reason. We can get rid of that red tape through form-based zoning by aligning our zoning rules with our building code rules.

Cara Stern: It makes sense that standardization would be pretty valuable. At The Missing Middle, we’ve talked a lot about how all the different rules between cities make it harder for a builder to sell homes in one city and then expand to another because they have to learn a whole bunch of new rules, which adds time and process to the project. I kind of think of it as inter-city trade barriers.

Mike Moffatt: That’s a great way of putting it—sometimes even inter-neighbourhood trade barriers, because the rules can differ between one side of the street and another. That standardization is one of the big benefits of form-based zoning. If height requirements and other requirements are consistent among low-rise neighbourhoods, it’s a lot easier to design and factory-build housing because you don’t have to have different units for different municipalities. You’re not saying, “Okay, I can sell this in Brampton, but I can’t sell it in Mississauga.” You create one standard, and that allows you to build homes everywhere.

Cara Stern: Has anywhere in Canada actually adopted form-based zoning?

Cara Stern: That seems to cover the second item on my list of objections: the size of buildings. Specifically, we hear that buildings are just too large, look out of place with the rest of the neighbourhood, or crowd out existing homes, even if they aren’t actually any taller than existing homes.

Mike Moffatt: Exactly. In the case of form-based zoning, Part 9 of the building code sets out a limit of 600 square meters for the structure, which rules out building short but very large housing structures. You can’t just build a big townhouse complex in the middle of a single-family neighbourhood because you have to comply with Part 9. That really limits the size and types of homes that can be in a single-family neighbourhood.

Does gentle density reduce that?

Mike Moffatt: Yes, it does, because it limits how dense these neighbourhoods can get through height limits, setbacks, and lot coverage rules. You want to make sure you have adequate green space for residents and permeable area to prevent flooding, so there are limits to how dense these neighbourhoods can get. Of course, that limit on density is a double-edged sword because it also limits how many families can live in that neighbourhood. That’s where the “gentle” part comes in: these neighbourhoods can only get so dense, which prevents some of these disputes around parking and strain on infrastructure.

Cara Stern: Another frequent objection to infill housing is that there are no benefits to existing residents, only costs. An investor buys an existing home, knocks it down, builds a multiplex, and a bunch of new residents move in—and the people living there beforehand aren’t so happy about it. How does the concept of gentle density change that?

Mike Moffatt: That’s one of the big benefits. In traditional infill, an investor buys a small strawberry-box home, knocks it down, and puts up a multiplex. The benefit of gentle density zoning is that you get away from thinking in terms of unit counts—whether you can have four or five units in a building—and instead focus on choice and giving existing residents more freedom in how they use their land. It could be building a multiplex, but it can also be adding tiny homes or creating a “pocket neighbourhood,” where you have four or five smaller units on a lot around a central courtyard.

Cara Stern: One final objection I hear all the time is that intensification only creates homes for rent and not for ownership opportunities. An infill developer comes in, builds an eightplex, and rents out all eight units—or maybe at best, they live in one and rent out the other seven. Does gentle density create homeownership opportunities and not just rentals?

Mike Moffatt: This is an objection I hear a lot: that intensification leads to neighbourhoods going from ownership-based to rental-based, and I think there’s something to that. The concept of gentle density allows for infill that is still ownership-based. Everything I’ve talked about so far with gentle density has been zoning-based, but this is one area where we’re talking about other rules—specifically condo regulations. Under current rules, to create ownership housing for anything beyond a duplex, it falls under condo regulations. If you want to build a fourplex or four units on a single lot in a pocket neighbourhood, you normally have to treat it as a condo and go through all the paperwork and expense of condo regulations.

The thing is, those rules weren’t designed for small multiplexes or small forms of infill; they were for townhouse complexes of 80 or 90 people or high-rises for 300. They don’t scale—you do as much paperwork for a four-unit condo as you do for a 400-unit condo. In theory, you can build multiplex infill and make it ownership-based, but in practice, it’s prohibitively expensive, so nobody really bothers.

Cara Stern: How can you fix that?

Mike Moffatt: Jurisdictions across North America have taken a few different approaches.

In Oregon, for gentle density housing that isn’t stacked on top of each other—like a ground-level fourplex or a few tiny homes—they made it much easier to subdivide the land between units. You can take an existing lot, divide it four ways, and when you buy a quarter of that fourplex, you’re not just buying the structure, but also the underlying land. That creates opportunities for ownership because you can buy the underlying land and subdivide it. If you have units that are stacked, BC has streamlined the regulations.

There are different ways of doing it, but they all fall within the philosophy of gentle density: giving existing residents options and allowing infill without letting density get to a point where existing residents are uncomfortable.

Cara Stern: I do think concerns about renters are overstated. You’ll often hear objections to projects where people say, “Oh, well, renters are moving into the neighbourhood and that’s not what this neighbourhood is.” I don’t really get that, especially with how the housing crisis has gone—I don’t get the stereotype that renters are going to bring property values down. But despite the current market, homeownership is still seen as how you set roots and grow wealth in Canada, so a lot of people want to own even if they might be happy renting for other reasons.

Mike Moffatt: I absolutely agree. Concerns about a neighbourhood becoming “too much of a rental neighbourhood” are overstated. But at the same time, you need to meet people where they are. Is this the hill we want to die on? If there’s a way to address those concerns and still get more housing built, we should do it. We shouldn’t let the perfect be the enemy of the good. If we have to meet people halfway, let’s do it rather than trying to convince people that a 40%, 50%, or 60% rental neighbourhood is fine. I just don’t think it’s a fight worth having.

Cara Stern: It’s funny—right now I’m renting in a neighbourhood, and when I meet neighbours and mention we’re renting the home on the corner, their faces fall. They’re like, “Oh, okay, I guess I won’t invest in this friendship because you’re just a renter here.” I mean, I’m here for a defined period of time, so I understand that to a degree, but they look disappointed before I even finish explaining. It’s really weird and doesn’t make any sense to me. Anyway, if we were going to adopt true gentle density, it sounds like several things need to change, like zoning rules and condo regulations. How do we get there from where we are right now in our cities?

Cara Stern: That makes sense. If there are no neighbours to object to it, it’s much easier to get through. I can certainly see the value of that because you’d eliminate a lot of red tape by having standardized zoning across the province, making it much easier to create factory-built homes given that companies would be building to a single standard. But if the point of gentle density is to make it easier to build infill, then applying it only to greenfield doesn’t let it reach its full potential, right?

Mike Moffatt: It’s absolutely a compromise, but applying it to greenfield allows us to work out the bugs, like whether maximum lot coverage ratios should be 40%, 45%, or 50%. It’s easier to work those things out first, and it allows the general public to get comfortable with the idea. They can look at those neighbourhoods after five or ten years and see that they look really nice. That creates the political conditions where the province could then start rolling out those rules in infill neighbourhoods, either by mandating it or by giving municipalities incentives—like offering additional infrastructure funding if they adopt it across two-thirds of neighbourhoods.

Cara Stern: I don’t like the idea that you have to build these homes and then wait five to ten years for other people to be okay with them in existing neighbourhoods. Is that necessary?

Mike Moffatt: Ideally, I’d prefer five to ten months over five to ten years, but it’s a difficult lift across the province. If an enterprising provincial politician gets that done, I’ll be the first to congratulate them, but I’m worried that going full head of steam on this might end in tears.

Cara Stern: Do you think it will actually happen then?

Mike Moffatt: I am cautiously optimistic because it makes too much sense from a red-tape reduction point of view to harmonize zoning and building code rules across municipalities. The industry can support that, and the general public can see that it makes sense. Limiting it to greenfield developments reduces opposition enough that it could get passed, and governments can frame it as preventing neighbourhoods from over-densifying.

Cara Stern: That’s funny. If they were at least making it match where you’re allowed sixplexes in Toronto or eightplexes in Edmonton, taking it to the maximum amount allowed as-of-right to make it easier to build, that would be great. But when I hear city councilors talk about wanting more “gentle density,” what I hear as a YIMBY is, “We only want small changes, let me fight for the NIMBYs here.” I always think it’s code for that. Hopefully, politicians will start taking what you’re saying seriously and actually make it easier to build, rather than using it to limit development.

Mike Moffatt: Exactly. Once you move to form-based zoning, you get away from disputes around unit counts altogether. So much of our discourse is focused on four versus six versus eight units, whereas if we say we’re limiting the size of the building structure and however it gets laid out is fine, it avoids that fight. Pulling away from arbitrary unit counts allows us to focus on creating density that works in existing neighbourhoods.

Cara Stern: Thanks so much 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 form-based zoning, a term we’ve used 37 times in this episode, 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:

MMI Gentle Density Report

2025 Statcan Study

2026 Statcan Study

Toronto

Calgary

Brought to you by the Missing Middle Initiative

Sabrina Maddeaux and Mike Moffatt unpack the economics of government debt, Old Age Security, and intergenerational wealth transfers, while explaining why borrowing for long-term infrastructure can be very different from borrowing to fund ongoing entitlements.

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: The federal government of Canada currently spends almost 10% of revenues on servicing public debt, and I’m starting to worry that Canada’s increasing public debt is burdening future younger generations for the benefit of older Canadians.

Mike Moffatt: Yes, you’re not the only one.

Government spending, tax, and debt decisions transfer wealth from one generation to the next. The obvious example of this is when governments finance entitlements to current residents using debt. The interest on that debt is paid for by future residents who get no gain or direct benefit from that spending. It’s a transfer of wealth. When we give money to current residents, we are debt-financing it, and future generations have to pay for the interest. That’s a transfer of wealth from the future to the present.

In the case of Old Age Security, that’s a transfer of wealth to older, often richer Canadians from future generations. Many of those future generations might not get to experience that level of wealth that our current seniors have.

Sabrina Maddeaux: Old Age Security, or OAS, is basically the 800-pound gorilla in an easy chair on top of the Canadian federal budget. Because while many people think it’s a pension they personally contributed to, like the Canada Pension Plan, the reality is that it’s massive government spending funded by general tax revenue. It’s the single largest line item in the federal budget, currently costing more than the Canada Child Benefit, employment insurance, and the Canada Health Transfer combined. As the population continues to age, that price tag is set to skyrocket, with annual spending expected to hit over $100 billion in just a few years.

Sabrina Maddeaux: Not people in deep need at all. When you think about how we’re setting up Canada for the future, we’re sending all these entitlements to seniors. These aren’t something like a pension that they’ve paid into over the years. These are from general revenues versus young people, young families, and kids who are struggling and have skyrocketing poverty rates and aren’t getting the same type of entitlements. Not even close. They’re paying for the seniors’ entitlements, often wealthy seniors. The fact that we’re increasing our government debt levels to pay wealthy seniors while young Canadians are struggling to do things like paying rent is infuriating.

Mike Moffatt: It is infuriating. OAS is a great example of intergenerational wealth transfers through debt financing. But not using debt financing in certain circumstances can also be a form of wealth transfer.

I certainly wasn’t around in the 1920s. I’m getting the benefits of this hydroelectric plant, but I didn’t pay for the capital cost of the project. If you don’t debt finance a project, you’re transferring wealth from the past to the future.

Sabrina Maddeaux: You don’t have to pay, but your grandparents and great-grandparents would have.

Mike Moffatt: That’s true for some people. But many of us didn’t pay either because we didn’t have relatives living in Ontario in the 1920s. In my case, most of my family was in Saskatchewan at the time. Most Ontarians are like me in that they are only partially or not at all descended from people who lived in Ontario in the 1920s.

It’s a different cohort of people who live here than had grandparents or great-grandparents here in the 1920s. It wouldn’t have been fair to ask people in the 20s to pay for the full construction cost so they could subsidize future generations, particularly when those future generations might not even be related to them because they moved here from Sweden or Saskatchewan.

By not debt financing that infrastructure, current generations are subsidizing future ones. If they have to pay for it upfront, they may not make that investment at all, and we’re worse off for it. But if we debt finance that power plant over the useful life of the asset, we can better align who gets the benefit from that asset and who pays for it.

Sabrina Maddeaux: That would apply equally well today to the Gordie Howe Bridge, that new bridge connecting Windsor to Detroit which will cost Canada over $6 billion. That’s another asset that Canada is buying and is something that future generations will get the benefit of.

Mike Moffatt: Exactly. There’s no reason why you and I should pay for the full cost of this bridge. The people of 50 or 60 years from now can benefit from that; those people should pay some of the capital costs as well. You and I might have kids or grandkids that live here in 50 or 60 years, but they could live somewhere else, and a lot of the folks who live in Canada 50 or 60 years from now might not have ancestors living here today.

Sabrina Maddeaux: Right. But if we debt finance it, then those future generations will have to pay off that debt.

Mike Moffatt: I wouldn’t say that. Our political class and media tend to mislead Canadians on this either willingly or in an attempt to simplify a complex issue.

Before I start with an explanation, I have to give an apology to any of my Ivy students [who might be listening]. I’ve taught this subject to about 3,000 students, and they’re probably hearing it again.

The reality is it’s rare for debt to be paid off in any meaningful sense. That happened a little bit in the 1990s and 2000s, and our debt went down. But that’s the exception, not the rule.

Sabrina Maddeaux: You’re speaking to my childhood, but are you saying that the increasing debt levels of Canada are no big deal?

Mike Moffatt: No. That debt still matters. Every year governments make interest payments on that debt to debt holders, and that interest is money we could be spending on education, health care, or tax cuts. It’s easy to think we can just pay for those interest payments by issuing even more debt so we don’t have to worry about it.

But those people collecting those interest payments, those bondholders, go out and spend it. That raises the demand for goods and services faster than they’re produced, causing inflation. Governments don’t have a get out of jail free card here. The bigger these debts get, the bigger the interest payments, the more they have to worry about inflation.

Historically speaking, when those pressures get too big, a couple of things happen. Either they start printing money to pay off those debts, or they simply default on those debts. They refuse to pay them. When those debts start to get large, investors start worrying about whether they’ll get paid back. They’re less likely to loan governments that money.

Sabrina Maddeaux: I want to hone in on something you just said because it’s been contentious in the media: Through this process, the government can essentially print money without printing physical money.

Mike Moffatt: Absolutely. Most of the money supply is not pieces of paper. This is only a small portion of Canada’s money supply. Most of our money is digital. There is a process of money creation involving the central banks and other banks. That would be a good topic for another episode.

We shouldn’t take this too literally. When we talk about printing money, it’s not necessarily some guy at the mint printing out sheets. It’s more digital than that.

Sabrina Maddeaux: Debts and deficits do matter then?

Mike Moffatt: They absolutely do. They’re problematic when used to finance entitlements for current generations, like Old Age Security. It matters a lot. Ultimately, this is a political decision. How do we get governments to start to reduce this intergenerational wealth transfer?

Sabrina Maddeaux: Canada does need to rethink Old Age Security. It’s not just a question of fairness between generations. Younger Canadians are already facing huge costs. At the same time, the federal government has committed to major increases in military spending and the need to fund major infrastructure upgrades. The average worker is at, if not past, their limit with income and sales taxes. It’s not an option to add extra taxes right now.

Mike Moffatt: Yeah, I worry about that anger and younger Canadians giving up on the country because they’re not getting as much from Canada as older generations did. To deal with the transfer element, either old age security could be made less generous or programs that benefit younger generations could be made more generous, spending on higher education or child benefits, but that starts to get expensive quickly.

Sabrina Maddeaux: It’s all still a lot of spending. But if we leave OAS the way it is and increase benefits to younger Canadians, how would we pay for that? Plus the military spending, infrastructure, health care, and housing? There’s a never-ending list.

Mike Moffatt: There aren’t many great options. The first option is we spend less on something else. But we’re running out of options there because you listed everything the federal government spends money on. The second thing is we allow deficits to increase, but that doesn’t solve the intergenerational equity problem because those debts and deficits have to be financed, and future generations pay for those interest rates. It doesn’t address the core problem. The third one is that taxes go up. There’s no free lunch here. Everything has a trade-off. We’re looking at a series of uncomfortable options.

How well do you think the general public, particularly younger people, understand these trade-offs and the intergenerational wealth transfers going on?

Sabrina Maddeaux: Younger people get it more than ever before because they’re living the consequences. I don’t think older generations always get it because they’ve been allowed to have their cake and eat it too. Yes, they did work hard, but they tend not to see how many advantages are given to them by the government.

Sabrina Maddeaux: Younger people don’t feel well served by the system and would likely prefer fewer entitlements and lower taxes because they don’t believe they’re ever going to see a return on those taxes. They see it being funnelled to older generations and programs that don’t benefit them. They say, “Why can’t I keep more of my hard-earned paycheck and maybe I can buy a house one day?”

It’s difficult for any political party to offer this proposition because of the Baby Boomers. It’s such a toxic thing when they are a huge voting cohort to suggest, even though it would be a naturally conservative position to say, “let’s make major tax cuts.” Instead, we see tinkering around the edges. But there hasn’t been any proposal from any leader to have major income or sales tax reform in a way that doesn’t result in an extra $42 a month in your bank account, but something that would result in tens of thousands more.

Mike Moffatt: Even when there is a tax cut or tax tweak, more often than not it is structured to disproportionately benefit seniors. It doesn’t necessarily solve this intergenerational equity problem if those tax changes aren’t targeted to younger people who are struggling the most.

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 the economic history of Saskatchewan, please send us an email to missingmiddlepodcast@gmail.com.

Sabrina Maddeaux: We’ll see you next time.

Additional Reading/Listening that Helped Inform the Episode:

As Canada faces crippling debt, it must do the unpopular thing and cut elderly benefits

Scott Gallowy Short

Canadian taxpayers face up to $3,348 each in government debt interest

The Burdens of borrowing: Government debt and intergenerational fairness

G7 debt is now a pressure point for anxious markets

The evolution of federal debt interest costs in Canada

Canada’s combined federal-provincial government debt estimated to surpass $2.4 trillion in 2025/26

Intergenerational Injustice in Canadian Public Finance

Funded by the Neptis Foundation

Brought to you by the Missing Middle Initiative

In this episode of Classonomics, Sabrina Maddeaux and Mike Moffatt break down why the "Baby Gap", the widening disconnect between Canada’s parental benefits and the reality of modern life, is a primary driver of our record low fertility rates. From the rise of the gig economy to the erosion of employer top-ups, we explore why so many Canadians are struggling to afford the families they want.

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: Canada’s total fertility rate hit 1.25 children per woman in 2024. That’s a record low, and it officially lands us in the ultra-low fertility club alongside countries like Italy and Japan. Statistics Canada did try to explain why, and one of the reasons they flagged was women’s greater participation in the labour market.

I do get why that shows up in the data, but I think it obscures more than it reveals because it implies there’s some kind of mass trade-off happening that women are actively choosing work over wanting babies, and maybe that’s true in some cases, but that’s not really what’s going on for a lot of women. Women largely do want to work and have kids. That’s not the tension here. The tension is that parental benefits haven’t kept up with how work has actually changed or with what it costs to take time off in 2026.

So we end up with declining fertility, not because a lot of women have stopped wanting families, but because the math of building one keeps getting harder. And that’s where the real story lives.

Mike, let’s start with the foundation. When most Canadians think about parental leave, they picture something: you have a baby, you get a year off with some kind of pay. But what does the actual federal system look like and who is it designed for?

Mike Moffatt: The basic architecture is in part of our employment insurance system, and it has a couple of components stacked together. I’m going to run through some numbers, but I’ll try and keep that limited.

The first part of it is that the birthing parent gets up to 15 weeks of maternity benefits, and then stacked on top of that, either parent can claim parental benefits, and that’s either 35 weeks at the standard rate or up to 61 weeks at a lower extended rate.

The rate is about 55% of your average insurable weekly earnings, and that maximum rate now tops out at $729 a week, which isn’t a lot of money. The extended option, if you choose that, drops the rate to 33%. So overall, you’re looking at a ceiling of somewhere around $38,000 a year, assuming that you’re maxing out on the standard option.

Sabrina, you’re in this cohort that the system is supposed to serve but really isn’t, or at least has gaps. You’re a millennial woman. You’ve watched your peers try and figure out the math of having kids while housing costs absolutely eat through your savings and contract work has replaced a lot of stable employment. So what does this look like on the ground?

I see that in my own life with friends, juggling affordability, the ability to take time off work, and that either delays having children, sometimes they don’t have children, or they have fewer than they would have liked. For my generation, the calculation goes something like this. You’re in your late 20s, early 30s, maybe on contract or freelance or part-time while you build something, and then you want to have a family. Then you do the math on what parental leave actually pays in a city where rent alone can be $2,500 a month for a one-bedroom condo, and it just doesn’t add up at the end of the day. You can’t imagine doing it and having any sort of financial stability.

Mike Moffatt: Let’s think about those numbers for a second. The average woman wants to have 2.2 kids; they expect to have 1.9 because of these difficulties. And in reality that’s closer to 1.2 to 1.3 on average - noting, as our producer, Meredith, likes to note, that you don’t have fractions of children. These are averages. But if we go back to the financial math, what does that look like for a woman or a family, thinking of having a kid?

Sabrina Maddeaux: Well, the federal government sets the ceiling on insurable earnings at $68,900, meaning that anyone earning above that gets an effective replacement rate below 55%. And so if you’re earning $90,000, which isn’t that high of a salary for a young person in a city these days, you’re replacing closer to $0.42 on the dollar, then at $100,000 of salary, around $0.38. And the situation only gets worse from there. And in Toronto or Vancouver, $90,000 or even six figures just isn’t that high of an income. It doesn’t even qualify you to buy the average home.

Mike Moffatt: I don’t know how many people, particularly living in the GTA who are already struggling to get by, can afford to take a 60% pay cut. But it sounds like that’s what we’re asking of them, if we want them to have a child.

Sabrina Maddeaux: We’re asking for a massive sacrifice. That’s not even a sacrifice many can make with the current cost of living and financial circumstances people are facing. That $90,000, $100,000 — that’s what a lot of nurses, teachers, and young professionals earn. We’re not talking about the ultra-wealthy here. These are people with perfectly ordinary salaries who are going to take an enormous pay cut. Also, their costs are going to spike, because that’s what happens when you have a child or more children. Diapers, a bigger space, formula, and eventually childcare. And so that cap hasn’t tracked with average wage growth broadly, but it’s also not kept pace at all with housing costs, especially in the cities where a lot of young Canadians are working and actually trying to raise children. So they’re either leaving those cities, which is bad for the cities and also bad for families to be away from their communities, their grandparents, their social circles, or they’re just delaying or not having children or not having more children.

But I’d like to talk about who actually even qualifies for federal parental leave, because that’s a huge part of the problem here, too. You mentioned that 600-hour rule, but the nature of work has shifted significantly over the years and decades. So I’m curious how many women are now falling through the cracks.

Mike Moffatt: The number that really lands is that it’s about one third, or about 30% of mothers in Canada, who are eligible for paid parental leave. And that’s not necessarily because they’re not working, but because of how they work. Again, if you’re part-time on a contract, gig work, or self-employed, you’re probably not accumulating enough insurable hours in the way that E.I. counts them.

And the self-employed situation is a really good case study of how this works. So one of the last major federal updates to maternity benefits was back in 2010 under the Harper government, when self-employed women were finally allowed to access benefits for the first time. And that was a big deal. That was presented as a big step forward. And I certainly at the time thought it was. But if we look 15 years later, the uptake is pretty dismal. Only about 1 in 4 self-employed women with a child under the age of one are actually accessing those government benefits. And compare that to about 3 in 4 employed mothers. So the program exists on paper, but it’s really just not reaching people the way it should.

Sabrina Maddeaux: I think those stats would shock a lot of people who assume that all women, no matter what type of employment you have, have access to these benefits. And technically, on paper they do, but that’s far from the reality we’re seeing. So why is that?

Mike Moffatt: It really comes down to how it’s structured. To opt into this, you have to register with E.I.; you have to start paying premiums a full 12 months before you plan to make a claim. So, from a bureaucratic standpoint, you’re essentially required to plan your pregnancy a year in advance. And that’s not necessarily how all babies are born. Because you can’t join after the fact or retroactively, unexpected pregnancies or any income volatility make it genuinely risky to commit to permanent E.I. contributions. And once you’re in, you generally can’t opt out as long as you’re still self-employed. So it’s a system designed for a stability of life circumstances and a level of planning that a lot of workers simply don’t have. And in many cases, have never had.

Sabrina Maddeaux: And even for those who aren’t necessarily long-term freelancers or contractors or small business owners, that 600-hour rule ignores the reality that a lot of young workers, especially in recent days, are more likely to experience work interruptions and often for longer periods. So we’re seeing constant rounds of layoffs. We call it the forever layoff environment. Longer periods of unemployment and job searching, less predictable career trajectories. It starts to feel like a system that’s more designed to keep potential parents out than in these days, although that obviously wasn’t the initial intention at all.

Mike Moffatt: Absolutely. So you can think of a young person, they lose their job, and they want to increase their qualifications and go get an MBA or something. Again, if they haven’t been employed for a while, they’re really going to fall through the cracks here.

Sabrina Maddeaux: And I also want to talk about the private sector’s role in this, because that’s the whole other element. There is this general assumption that parental benefits have gotten better over the years, and that things have generally moved forward. And for a while that was true. There’s that idea that government benefits have stalled, but employers are now carrying that burden. But when you look at what’s actually happening with employer top-ups, the picture is kind of the opposite, isn’t it?

Mike Moffatt: It really is. And I think it’s one of the more unappreciated parts of the story, that there is this widespread impression that maybe the government benefits don’t work so well, but the private sector, they’ve been stepping up, and they’ve been filling in those gaps, particularly through employer top-up plans, supplemental E.I. benefits, and so on. And that may have been true for a while, and it may still be true for some employers. But when you look at the federal evaluation data, the trend is clearly going in the wrong direction.

Sabrina Maddeaux: So what else are we seeing in terms of what companies are doing? I know there’s been some big headlines lately that suggest the trend is still going in that wrong direction.

Mike Moffatt: We’re actively seeing companies cutting parental leave and not just holding the line. So Deloitte, for instance, they announced they’re cutting parental leave in half for a segment of its U.S. workforce, going down from 16 weeks to 8. So the United States had always been known as a country that didn’t have particularly generous benefits. And now they’re even moving further in that direction.

Zoom, which, I think we all got used to using in the pandemic. They cut their benefits last year. And what happens is when one of these large companies moves — like a Fortune 500 company moves — it kind of sets a standard that if they’re able to do that without a lot of societal blowback, it kind of creates a permission structure to allow other companies go, “Okay, well, Deloitte did it, and they didn’t get into too much trouble, so let’s do it ourselves.”

Google has pointed out that their former head of HR put it pretty bluntly: when these cuts were announced, it legitimizes that action for everybody else. So at the same time, here in Canada, when more women are working in the kinds of jobs that E.I. doesn’t really adequately cover in the first place, the private sector that is supposed to take charge, top up, and fill in those gaps, is actually moving in the other direction. So women here are getting squeezed from both sides.

Sabrina Maddeaux: And we’ve talked a lot about what’s bad, but we actually have some evidence of what better looks like or could look like. Quebec has its own parental insurance system. And countries like Finland have recently overhauled how they structure leave entirely. What do those examples tell us?

Mike Moffatt: I’m glad you ask that question, because we’re often accused here at the Missing Middle, and I think with some merit, that we over-focus on problems, maybe not enough on solutions. So let’s talk about some of those solutions. And the nice thing is we have a bit of a controlled experiment here in Canada, because we have differences in systems between Quebec and our other nine provinces.

And we’ve seen studies of this. A 2024 peer-reviewed study estimated that the program was associated with meaningful increases in fertility across education levels, and the effect is actually biggest for women with post-secondary education. It’s not a silver bullet. Quebec’s done other things like subsidizing childcare, and it’s often difficult to disassociate how much of this effect is from one program versus another program. But we have a really consistent pattern here. Better leave access correlates, not surprisingly, with more births.

Sabrina Maddeaux: And making being a parent more affordable broadly. So what’s happening in Finland?

Mike Moffatt: You know, we are often asked about Finland, in the case of housing and homelessness policy, but there’s actually other things the country can teach us. And the area of parental leave policies is one of them.

Back in 2022, they restructured their leave programs to give each parent an equal individual quota of leave of roughly six months. And it’s mostly nontransferable. So for fathers like me, we either have to use it or lose it. And over the last two years, fathers’ share of parental leave days has nearly doubled. So they’ve gone from 13% to 21%. And the reason that this matters is not just an issue of gender equality, though that is important, but it’s also that when women absorb almost all of the career penalty of having a child, that penalty factors into how many children they’re willing to have. So kind of sharing those expenses around both parents really kind of changes the calculus here.

Mike Moffatt: We’ve had this discussion here. We’ve looked at a lot of problems. We’ve looked at a couple of best practices globally. One from Quebec and one from Finland. So in your view, what does meaningful reform actually look like? Where do we start? How much can we learn from these two examples, and what are the other things that we should be doing?

Sabrina Maddeaux: We can learn a lot. And you know, we have a system in place. So it’s not about creating net new everything. It’s about updating it so that it makes sense with current realities, and I’d start with eligibility because right now you can debate the benefit rate all you want, but if a third of mothers can’t access the program, that conversation is somewhat beside the point.

So Quebec is already paying up to 75% and raising the federal standard to 75 or more would meaningfully change that financial math for lower- and middle-income families, but also higher-income families as well, and would get us closer to where the OECD average is headed.

Mike Moffatt: It’s funny, a lot of the things we’ve talked about in this episode remind me of things that we’ve talked about on other shows about how government systems and policies don’t necessarily work. Sometimes because they’re based on assumptions that simply aren’t true, or they were built in a different era and societal changes and economic changes have happened, but we haven’t had the system reforms to keep up with that. Do you think parental leave is just another version of that?

Sabrina Maddeaux: I mean, what really strikes me about this in particular is how sharply the outcomes have disconnected from the intention. E.I., parental benefits were designed to give parents real financial security during one of the most expensive periods of their lives, and instead, now a third of mothers can’t access them. And those who can are often taking a massive pay cut so severe that it’s actually factoring into whether they have another child.

So the program hasn’t failed because the goal was wrong or the intentions are bad. It’s failed because nobody has bothered to update it. There are other pieces of this puzzle too, like childcare, baby bonuses, and broader incentives to make having kids financially possible and even comfortable. That shouldn’t be too much to ask.

So we could do a whole episode on any of those and maybe we will at some point. But parental leave is different because the program already exists. Canadians already pay into it. There’s already public buy-in for the basic principle, and a lot of people, I think, would be really surprised at how badly it’s failing parents. You don’t have to sell people on the idea. You just have to modernize something that’s been running on autopilot for 30 years. And if there’s a definition of low-hanging fruit in federal policy, this is it.

Thank you so much, 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 things we can learn from Finland, please send us an email to missingmiddlepodcast@gmail.com.

Sabrina Maddeaux: We’ll see you next time.

Additional Reading/Listening that Helped Inform the Episode:

Statistics Canada -- Canada’s total fertility rate reaches a new low in 2024

Statistics Canada -- The Daily: Fertility and baby names, 2024

The Hub / Cardus -- Stop dismissing falling fertility rates as a choice (2.2 children wanted stat)

Canadian Centre for Policy Alternatives -- Support for parents in a post-pandemic world (EI reform; replacement rate, eligibility threshold proposals)

Policy Options / IRPP -- Parental leave benefits need to be more practical and equitable (1 in 4 self-employed stat; top-up decline)

PMC -- Policy and Fertility: A Case Study of the Quebec Parental Insurance Plan (peer-reviewed; fertility lift estimates)

Yle News / Helsinki Times -- More fathers taking parental leave since Finland’s 2022 law change

Fast Company -- Deloitte and Zoom cut parental leave and other benefits

PMC -- Reconceptualizing Parental Leave Benefits in COVID-19 Canada: From Employment Policy to Care Policy (EI vs QPIP comparison; self-employed eligibility history)

Funded by the Neptis Foundation

Brought to you by the Missing Middle Initiative

The argument goes something like this: Baby Boomers will eventually sell or otherwise leave their large suburban homes, younger generations will increasingly prefer urban living, and newcomers to Canada will continue renting apartments downtown. If that’s true, the demand for family-sized homes could eventually fade, and home prices in the suburbs will crash and never recover.

But what if that assumption is wrong?

In this episode, Mike Moffatt and Cara Stern examine new Statistics Canada research on how immigrants’ housing choices change over time. While newcomers overwhelmingly rent when they first arrive, many transition into homeownership, especially suburban family-sized homes, as they establish themselves in Canada.

video linked

They test this prediction by exploring the scenarios that could prove it wrong, from lower immigration and more urban family housing to rising emigration and changing housing preferences.

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 an assumption among some planners that suburban living is going to one day be a thing of the past in Canada—that people moving to Canada, who tend to start out in urban centres, are going to continue to want to live in urban areas, and whatever demand there is for suburbia will be outweighed by all the supply soon to hit the market from the aging of the baby boomers. Today, we’re breaking down why the classic Canadian suburb isn’t just surviving, but likely to be in high demand for decades to come.

Mike Moffatt: In a previous episode about whether aging Baby Boomers will flood the market with single-family homes, we talked about how the sheer number of newcomers will, in my view, ensure a strong demand for housing. However, what we didn’t cover is the type of homes that they’ll live in. If it turns out that newcomers to Canada have no interest in living in a single-detached home in the suburbs, then having robust immigration might not create a lot of demand for those suburban homes, at least not directly, though it could have an indirect effect.

Cara Stern: Most immigrants arrive in Canada and settle in a handful of regions in the country, and they tend to start off as renters. I mean, when you’ve got policies like the foreign buyers ban, it makes it incredibly challenging, if not outright legally impossible, for a newcomer to buy a piece of property the second they step off their plane. So it takes time for them to settle in and for them to be confident about where they want to set roots.

Mike Moffatt: But we actually have a lot of evidence that we can draw from to answer these questions.

Cara Stern: That makes a lot of sense because renting gives you a lot of flexibility. Until you figure out where you want to be for the long term, it does make sense to rent for a while.

Mike Moffatt: Exactly. Qualifying for a mortgage can be incredibly difficult when someone first arrives, so of course they’re going to rent. But over time, that changes. As newcomers stay in Canada longer, they integrate into the economy, they build wealth, and they not only shift from rental to ownership, but they become less likely to live in overcrowded conditions—so they occupy more homes. Take those thousand immigrants: once they’ve been in Canada exactly ten years, they occupy 370 homes instead of 320. That’s more than before, but the breakdown changes a lot—it shifts to 150 rentals and 220 ownership homes. So there’s a big shift from rental to ownership.

Cara Stern: Yeah, that’s a huge shift from their first days in Canada to buying. They’ve set up their lives here and started working, making it easier to qualify for a mortgage, so it makes sense that we’d see a big movement at that point.

Mike Moffatt: And those changes don’t stop after ten years; they continue to get stronger. For immigrants who have been here for 15 years, they occupy a greater proportion of homes per thousand. In fact, they occupy more homes per thousand people than the Canadian-born population, and they also occupy a greater proportion of ownership homes. So by year 15, there is a lot of demand and a lot of purchasing of homes that they can own.

Cara Stern: So they’re actually more likely to own a home in Canada than someone born in Canada?

Mike Moffatt: I know that sounds strange, but it’s largely a function of the age distribution of immigrants to Canada. If you think about it, children don’t own homes and they don’t have their name on the lease. Because there’s a smaller proportion of children who arrive as newcomers relative to the general population, immigrants are more likely to be adults than the general population, and therefore are more likely to own or rent a home.

That’s something that we often miss in the immigration discussion. It sounds obvious, but it’s really important when it comes to housing. When we look at immigration, it’s not just a sheer numbers thing of 380,000 newcomers, but what’s also important is the fact that those newcomers are disproportionately in their 30s or late 20s. They’re in their prime rental and ownership years, which impacts the overall demand for housing beyond just the sheer number of newcomers.

Cara Stern: Ownership can mean a lot of different things. That could be a 500-square-foot, one-bedroom condo in downtown Toronto or Vancouver, or it could be a five-bedroom home in the suburbs. Those numbers about how many they own doesn’t actually tell us what they own. Do we know what they’re buying compared to the Canadian-born population?

Mike Moffatt: What we do know is that, per 1,000 persons, immigrants are more than twice as likely to live in a condo apartment that they own than the Canadian-born population. So it is true that they are more urban and more likely to be in a high-rise condo, but they’re actually slightly more likely to also own a ground-oriented home—think a single-detached, semi-detached, or townhome—than the general population.

It isn’t true that newcomers largely stay downtown and largely live in apartments. They might when they first arrive, but after 5-15 years, that changes. It’s also true that people who aren’t born in Canada disproportionately live in certain parts of the country, including suburban towns in the GTA or parts of suburban Vancouver like Surrey and Burnaby—places within these big metros that have lots and lots of single-family homes.

Cara Stern: That makes total sense if you look at the way immigrants have historically settled here and how cities have expanded. Think about the post-war Italian waves in the '50s and '60s moving outward, or more recently, the massive growth of Asian communities across Peel and York regions. A lot of them started downtown and then moved to the suburbs to establish their roots.

Mike Moffatt: Exactly. We’re still seeing that today. When the next census data comes out, we’re going to see a number of communities that haven’t historically been thought of as destinations for newcomers show very substantial increases in the population of people who weren’t born in Canada. Ones that instantly come to mind are Brantford and Woodstock in Southwestern Ontario. Beyond the borders of the GTA, over the last five to ten years, places have experienced an influx of folks who may have moved to Canada 10 or 15 years ago and are starting to settle in what have essentially become very distant suburbs of the GTA.

Cara Stern: Even those distant suburbs have home prices that aren’t particularly cheap. I suspect that most people who do move here have to have a certain amount of wealth to get approved to immigrate. How much does that explain what’s going on?

Mike Moffatt: The immigration pathway that someone takes actually does make a big difference in the types of homes that get purchased, affordability, and so on.

As it stands right now, if we add all of this together, the belief that the death of the Baby Boomers means the death of the suburbs is not just wrong, but actually dangerously wrong. Now, there are pockets of the country with low levels of immigration where this might hold. Towns might depopulate, reducing the price of suburban homes there. But even there, the availability of homes might end up attracting families from other parts of Canada due to that relatively affordable housing. So even in those communities, I don’t think it’s a given.

Cara Stern: One thing that you’re insistent on here at The Missing Middle is that if we make a prediction, we should think through all the reasons why that might be wrong, and then think about how plausible those reasons are so we can adjust our predictions accordingly. So I’m going to give you some scenarios that would cause your prediction that large suburban family homes will still be in demand to be wrong, and you can tell me how plausible you believe them to be.

Mike Moffatt: Okay, yeah, I’m absolutely game.

Cara Stern: Let’s start with the most obvious lever: the overall numbers. What happens if our immigration rates drop significantly, or if Canada simply can’t hit its targets moving forward as the whole world starts trying to attract people as they all deal with aging populations? That could change things, right?

Mike Moffatt: That would make a difference. Now, I don’t think Canada is going to have any trouble hitting immigration targets for the next few decades. Keep in mind that the people who come over to Canada tend to be in their late 20s and early 30s, so there’s kind of a 30-year lag between reduced global births and reduced global immigration. That could have an effect 30 years from now, but I don’t think it’s going to be an issue today.

However, I could absolutely see a scenario where Canadians demand further cuts to immigration targets because of concerns around housing or healthcare, and governments respond to it. Currently, Canada brings in about 380,000 permanent residents a year. If that was to drop to 80,000 or 180,000, yeah, I would be a whole lot less bullish on the future of the suburbs.

Cara Stern: Okay, so scenario two: what if our cities actually get their act together and start building large family-sized homes within existing urban boundaries? I’m talking about high-density infill, multiplexes, townhouses, or those European-style courtyard apartments where kids can play in a safe area in a shared backyard. If young families and newcomers can get three or four bedrooms downtown, do they still choose the suburbs?

Mike Moffatt: I certainly hope that governments will allow for more infill housing. A lot of the work we do at the Missing Middle Initiative is writing reports and discussing policy changes to advance that in a way that doesn’t attract too much local opposition. But I’m also skeptical that governments will allow for enough infill at scale to have a measurable impact on existing suburbs. We’re trying our best, but as someone who works on these policies every single day, I’m aware of how difficult this is going to be.

Of course, it’s also possible that governments change course and, instead of allowing for more infill, they allow cities to build outward—significantly expanding urban growth boundaries to allow a lot of new suburbs to be created, which could make existing ones far less attractive. I’m skeptical that’s going to happen, particularly in the Lower Mainland of B.C. and Southern Ontario, but that’s certainly possible as well, and that would put downward pressure on the prices and the shortage of suburban homes in those areas.

Cara Stern: Okay, so here’s a third scenario: what if that pent-up demand from young, Canadian-born people that we’re counting on just evaporates? Maybe they resign themselves to the fact that they’re never going to be able to afford a house, so they stay in an apartment forever. Or worse, we see a major brain drain where our youngest, brightest talent looks at Canadian real estate prices and decides to leave the country.

Mike Moffatt: I worry about that emigration scenario a lot. In fact, I recently had a piece in The Globe and Mail that talked about this. If the suburbs do end up dying, I think it’s actually going to be for emigration reasons, not immigration ones. Emigration out of Canada is on the rise, and I think the conditions are right for a small-scale exodus of young people out of the country—not just to the United States, but to places that are much less expensive, like Vietnam, Thailand, Costa Rica, and so on. If we saw that exodus of young people, that absolutely would put downward pressure on the demand for homes in the suburbs.

Cara Stern: Okay, fourth and final scenario: what if housing tastes are really just changing? What if both newcomers and young Canadians decide they actually prefer smaller, low-maintenance urban units, and choose to not have kids altogether because it’s too expensive or they just don’t want to? If the cultural desire for the suburban dream dies, then so does the demand.

Mike Moffatt: Yeah, I’m skeptical of this one. Part of what newcomers to Canada are chasing is the North American dream, and that involves ownership of a larger home with a backyard. We’ve seen this for generations, so it doesn’t strike me as particularly likely that their preferences would all of a sudden change. But if those preferences do change, and newcomers en masse decide that they aren’t interested in suburban homes, or that those suburban homes are perpetually out of reach, I don’t think they’d settle in apartments. I think they’d just stop coming to Canada altogether. That starts to loop back to your immigration scenario where maybe we can’t hit our targets.

Overall, I see that as unlikely. We’ve had decades of folks coming to Canada wanting to chase that North American dream of a larger home with a backyard, and I don’t see that changing.

Cara Stern: Okay, I just thought of a bonus scenario to throw at you. All the data you’re basing this on looks at how immigrants have acted historically and where they settled in the past, when the real estate market was a really good place to invest. I suspect a lot of people came here thinking, “I’m going to get into real estate; this is how I’m going to build my wealth in Canada.” Will that hold? People coming here now are looking at a market that isn’t the best place to make money, at least in the short term. Do we know that this data will hold up in the long run?

Mike Moffatt: Remember, we only know in retrospect that it was a good market. Go back to the 1990s and the first episode of our show on the book, “Boom, Bust, and Echo”. In the late '90s, everybody was saying you would be out of your mind to buy suburban real estate, that it would be the worst thing you could possibly do because the bottom was going to fall out of it. So obviously nobody was going to do that—and of course, they did.

Mike Moffatt: They do, but keep in mind that we could have said the same thing in 1997 when home prices were lower than they were a decade prior, and academic experts said home prices would never go up again. People believed that. But what changed was that prices started going up again. There’s a chicken-and-egg problem here where we tend to think prices go up after people believe they’ll go up, but it tends to be the opposite: prices go up first, and then people believe they can make money there.

Since the end of World War II, the real estate market has had its ups and downs, but the one consistent thing is that people want a place to live. At the end of the day, they’re looking for that security. If you’re a newcomer to Canada, you want this home at some level; yeah, you want the price to go up, but regardless of what happens to that price over 10, 20, or 30 years, you still have the house and you can still live there. If the asset devalues, it still has the same usefulness to house your family.

I’m old enough to have lived through several cycles where people believe home prices always go up, then they fall and people say, “Oh my god, we were so naive, we’ll never make that mistake again,” and then we make that mistake again. I don’t see it as particularly likely that people are going to avoid moving to suburban homes because they think they won’t appreciate in value over 10, 20, or 30 years. It’s possible, but I don’t see it as particularly likely.

Cara Stern: I guess what we can count on is that people will continue to not necessarily be logical or rational about their investment decisions, especially when it involves a home. People come into it in a way where you can look at all the logic and fundamentals, but in the end, a big part of it is just an emotional decision.

Mike Moffatt: Well, on top of that, I feel like the general public talks out of both sides of its mouth. We say, “Housing shouldn’t be an investment,” and then when people make a decision that isn’t investment-based—like saying, “I just want a suburban home because I want my kids to be close to a school and I want a backyard”—we say, “Ha ha, that’s a foolish investment!” So it feels like sometimes you can’t win. We don’t want people to treat housing as an investment, and then when they decide not to, we mock them for their decision.

Overall, I wouldn’t say it’s rational or irrational; I would say that the heart wants what it wants. If somebody wants a suburban home, they’re probably going to go out and get it regardless of whether they think it’s going to go up 8% a year over the next 20 years or 2% a year.

Thank you so much 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 past generations learning that home prices don’t always go up, 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:

Housing use of immigrants and non-permanent residents in ownership and rental markets

The homeownership trajectories of recent immigrants

Brought to you by the Missing Middle Initiative