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:

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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

They examine why housing affordability, environmental goals, and smarter regional planning need to work together and why it's time to rethink some long-held assumptions about how Canadian cities should grow.

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

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

Sabrina Maddeaux: When it comes to urban development, people tend to fall into one of two camps which don’t fall neatly down ideological lines. In the first camp, you have urban planners, fiscal conservatives, and environmentalists championing the fight against urban sprawl, albeit for different reasons.

And on the other side, you have groups worried about a lack of family-friendly housing, suburban developers, and some existing residents who want to keep their neighbourhoods as is, who would rather see cities grow outward rather than upward.

Now, the group fighting urban sprawl has been successful in implementing anti-sprawl policies, particularly in Ontario. Their policy toolkit includes building hard boundaries like urban growth boundaries, imposing steep development charges on suburban development, and establishing massive greenbelts.

Their logic is simple and compelling to some: draw a line in the sand, make outward expansion painful or illegal, and the market will naturally pivot inward. The city will densify, infrastructure dollars will be saved, and the environment will be protected. That’s all good in theory, but is it working in practice? A growing number of environmentalists, including The Missing Middle’s own Mike Moffatt, are of the view that many anti-sprawl initiatives, such as urban growth boundaries, are causing more sprawl than they are preventing. Mike?

Mike Moffatt: Yeah. So here’s my argument: if you’ve spent any time driving in southern or eastern Ontario, you’ve probably experienced a very strange pattern of development. Let’s say you want to drive from downtown Ottawa to a community along Highway 7, like Perth or Carleton Place. You’re driving through a built-up area in the City of Ottawa. Then you hit the Ottawa Greenbelt, and there’s not much in there. You get to the other side of the Ottawa Greenbelt, and you go through another built-up area in Kanata, and then boom, it just kind of ends. Then after another 25 or 30 kilometres, you’re in Carleton Place. You get to Carleton Place, and then bang, you’ve got all of these new family-sized homes that have been built in the last 10 to 15 years or so. It’s very strange where you’ve got built-up development, then nothing, then built-up development - 25 kilometres of nothing, and then boom, a whole lot of single-family homes.

Sabrina Maddeaux: Yeah, I’ve seen that driving out of the GTA to Ottawa as well - the uneven development. And when we have a housing crisis, it really strikes you that there’s not a lack of space or a lack of land. There are huge pockets of land that are very close to where people want to live and work that just aren’t being used at all.

Mike Moffatt: Absolutely. And this type of development is all too common. It’s one of those things that once you see it, you really can’t unsee it.

A lot of those developments cater to families that work in Ottawa. I can actually prove that those residents are working and playing in Ottawa, but it’s going to get a bit wonky, so I hope that’s okay.

Sabrina Maddeaux: Go ahead. Nerd out.

Mike Moffatt: It’s going to rely on some data. A lot of place-based data that Statistics Canada releases is defined at the metropolitan or metro level. The metro that everybody is familiar with is the GTA - the Greater Toronto Area. But overall, Statistics Canada defines 41 different metro areas across Canada. If you’re going to track metro-level data, you need to define the boundaries of the metro.

Take the GTA, for example. Clearly, the City of Toronto itself is in the GTA - it’s right in the name - and I don’t think anybody would be surprised that neighbouring communities like Mississauga are in the GTA as well. But then you go outwards, and you have to make some judgment calls, like whether Milton is in the GTA, or Pickering, Oshawa, Burlington, and so on. You’ve got to sort of figure out what’s in and what’s out.

Sabrina Maddeaux: Yeah, and I’ve been seeing people use GTHA for the Greater Toronto and Hamilton Area, so it does get confusing very quickly. How exactly does Stats Canada make that call?

Back in 2021, Statistics Canada added Carleton Place, Arnprior, and a bunch of other communities near Ottawa to the Metro Ottawa region. The reason they did this is that those communities had become so-called commuter villages, as over a third of their labour force actually works within Metro Ottawa. Now, people move to communities for all types of reasons, but a fair bit of it was a predictable response to policies put in place by the City of Ottawa to limit sprawl. These are families who theoretically could live in Ottawa - many of them used to live in Ottawa - but they decided to move to Carleton Place and commute to Ottawa every day for work.

Sabrina Maddeaux: That’s really interesting as people are taking longer and longer commutes to achieve affordability, if they can at all. You wonder where some of these boundaries will end. You showed me a great Ottawa Citizen piece from 2014 where the industry did predict that changes in the City of Ottawa’s policies would push families to move outside the city.

The specific issue the article focused on was development charge increases. The president of the Greater Ottawa Home Builders’ Association warned that development was increasingly being pushed outside the city, which would cause an increase in commuting, and he warned that this would hurt the city’s finances. In his words, “that means the city is not getting taxes and yet still needs the infrastructure for all the people coming in from the villages to work here.”

Mike Moffatt: Yeah, and that is a huge problem. Those families pay their municipal taxes to Carleton Place, but they use the infrastructure in Ottawa to commute there, go to the mall, or whatever. I absolutely love the response from the City of Ottawa’s planning committee chair in response to the homebuilders’ concerns.

Mike Moffatt: Absolutely. As somebody who makes a lot of predictions, I have sympathy for anyone who makes a prediction that goes horribly wrong. But if you look at the data, it’s almost like a hockey stick where those comments were made and then boom - population growth and home building skyrocket. Homebuilding exploded in Lanark County, which is the region just outside of Ottawa where Carleton Place is.

Around 2016 or so, about 18 months after those comments, you start to see an influx of families into that region. Population growth rates triple almost overnight and entire subdivisions go up. These communities became commuter suburbs for the City of Ottawa rather than what they used to be, which was self-contained, economically contained small towns. To be clear, I’m not just picking on the City of Ottawa here because none of this is unique to them. You see the same thing in places like my hometown of London, Ontario, where you’ve got these empty areas, and then once you leave the city limits, you get whole new subdivisions springing up in surrounding communities like Komoka. None of this is Ottawa-specific.

This then makes sprawl even worse because instead of building a new subdivision at the edge of town, you’re building it 10 or 20 miles away and requiring workers to drive in each day for work. How much of a problem is this?

Mike Moffatt: Unfortunately, I would say it’s an understudied topic, but some academic literature does exist. What it says is that leapfrogging happens under certain conditions. It’s not universal, but there are times where it is a real problem. Where we tend to see it happen more often is, first of all, when planning is local rather than regional. You’ve got a single municipality like London or Ottawa making these boundaries, and it’s easy to move into the next community.

It also tends to happen where there are significant differences in taxes, land costs, and red tape between the core community and the smaller communities around it. It’s a lot easier to build a new home in Lanark County than in Ottawa, so that’s where the developers are going to build it.

Next is where commuters can drive into the city each day free of charge. You don’t see this as much in places like London, UK, where they have taxes you have to pay if you drive into the city; we tend not to have those in Canada.

The theory behind all of this is you put in the urban growth boundary and allow for densification of existing neighbourhoods, but a lot of these municipalities didn’t do the second part - they didn’t allow for that kind of densification.

Sabrina Maddeaux: So then I take it that urban growth boundaries could potentially work, but by densifying, doing regional or provincial rather than local planning, and by having similar rules and tax rates across the region?

Mike Moffatt: Yeah, all of those matter. As well, having more transit options within the city helps, as it reduces the commuting costs for those families who decide to stay in the city.

Finally, urban growth boundaries and greenbelts tend to be more successful in Europe, particularly continental Europe, largely because population growth is lower, so there’s just not as much growth pressure to build new homes.

I have to say, though, that this is nearly an impossible issue to study or even discuss, and that’s not for scientific reasons. We can go out and get the data, run studies, and do models, but so many environmentalists, academics - and I wear both of those hats - as well as urban planners, absolutely refuse to even consider the idea that urban growth boundaries and greenbelts might actually be causing more sprawl than they’re preventing.

Why do you think it is? Why are so many of us hesitant to even consider the notion that these rules might be problematic?

It’s really refreshing to see experts like yourself who are environmentalists and do care about this come out and say we need to reconsider the evidence here and make different choices. But I’m curious, to someone that’s very much more inside that movement, what you’re seeing and what you think the barriers are.

Mike Moffatt: I do think it’s that people are hesitant to change their mind. To be clear, my own views have evolved on this in the last 10 to 15 years. 10 to 15 years ago, I would say, “Yeah, of course we need to put in these rules to prevent sprawl.” But we also have to look at the results of the last 10 to 15 years - is this working?

I think we’ve gotten to the point where this is no longer a policy issue; it’s become the ultimate virtue signal, particularly among politicians in the GTA and southwestern Ontario. We’re going to see it a lot this year because we’ve got a municipal election where you get these men and women saying, “I voted to freeze the urban boundary, therefore I’m saving the planet and saving farmland.” The actual real-world outcome of that vote is completely beside the point to them. Did it actually work? It allows a lot of these politicians to feel morally superior while the actual families they claim to champion are quietly forced to pack up their U-Hauls and move to Woodstock or wherever so they can afford a home with a backyard.

Then those newcomers to Woodstock drive every day to their jobs at Grand River Hospital in Kitchener, or wherever it is they work in a larger community. How on earth is that saving farmland or reducing carbon emissions? You’re not stopping people from having a family-sized home; you’re just pushing it 20 miles down the road and having to build wider highways so they can get from their homes to their jobs.

Sabrina Maddeaux: Yeah, people are going to want to have enough space to raise their families in a way that they can afford to do it, and they will find a way to. That often means moving further away and commuting more, driving more. So this is often counterproductive and has the opposite impact of what was initially the goal.

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

Mike Moffatt: And if you have any thoughts or questions about where to find a Starbucks in Lanark County, please send us an email to: missingmiddlepodcast@gmail.com.

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

Additional Reading/Listening that Helped Inform the Episode:

Looming development charge increases have builders worried

Funded by the Neptis Foundation

Brought to you by the Missing Middle Initiative

• Canada’s traditional homeownership rate overstates ownership among younger Canadians. Because it counts only heads of households, it misses the growing number of adults living with their parents and paints an overly optimistic picture of homeownership.

• A new measure from the Minnesota Fed provides a more accurate picture. By measuring the share of the entire population that owns the home they live in, it better captures today’s living arrangements and reveals much lower ownership rates for Canadians under 40.

• The revised numbers challenge common assumptions about housing. Fewer than one in four Canadians aged 25–29 owned their home in 2021, while many seniors remain homeowners well into old age, suggesting policymakers have overstated how quickly older Canadians transition out of homeownership.

A More Accurate Portrait of Homeownership

The traditional homeownership rate metric is misleading. Fortunately, the Minnesota Fed just came up with a better measure.

Here at the Missing Middle, we frequently write about and talk about homeownership rates and post a lot of graphs like the one below, from our piece The Homeownership Journey Is Broken. Policymakers Need to Repair It:

Figure 1: Homeownership Rate by Age Cohort and Year, Canada

Source: The Homeownership Journey Is Broken. Policymakers Need to Repair It

The problem with the metric becomes apparent when we chart the homeownership rate for every age group, including 15-19 years, as shown in Figure 2:

Figure 2: Homeownership Rate by Age, Canada, 2021, Traditional Definition

Data Source: Census 2021 Table 98-10-0231-01, Chart Source: MMI

A homeownership rate of 16% for individuals between the ages of 15-19 would strike most people as absurd, but the data is accurate. The problem is with how statistical agencies define homeownership. It is simply the proportion of families that own the house they live in. But very few 15-19-year-olds are the head of a family in the first place, so they are neither owners nor renters. They are absent from the calculation entirely.

This absence from the calculation matters, as the traditional homeownership rate measure does not capture phenomena such as people in their 20s and 30s living with their parents longer. This problem has been recognized for some time, so the Federal Reserve Bank of Minnesota decided to address it. In their piece New homeownership measure puts people first they created a new metric, the “homeowners-to-population ratio”, which measures the percentage of the population that owns a home, either as an individual or as a couple.

In an instructive infographic, the piece shows how factors such as older family members or adult children living with homeowners, or roommates living with the owner of a home, are captured under their new metric, as shown in Figure 3.

Figure 3: Traditional vs. Minnesota Fed Measures of Homeownership Rates

Source: Federal Reserve Bank of Minneapolis

Fortunately, Census 2021 contains enough data to calculate homeownership rates using the new Minnesota Fed definition. Figure 4 shows that, under the Minnesota Fed definition, homeownership rates fall dramatically for persons under the age of 40, and those over the age of 85. This better captures the phenomenon of younger people living with their parents longer, and the elderly living with relatives or in long-term care homes. Under the Minnesota Fed definition, the homeownership rates for 15- 19-year-olds in Canada are effectively zero, a much more sensible result.

Figure 4: Homeownership Rate by Age, Canada, 2021, Two Definitions

Data Source: Census 2021 Table 98-10-0231-01, Chart Source: MMI

The new definition causes homeownership rates to fall by 15 percentage points for those under the age of 30, 10 points for those between 30 and 34, and a whopping 20 points for those over the age of 85.

Figure 5: Homeownership Rate by Age, Canada, 2021, Two Definitions

Data Source: Census 2021 Table 98-10-0231-01, Chart Source: MMI

A few other points stand out to us:

• Even under the new definition, those aged 85 and up are still more likely to be homeowners in Canada than those between the ages of 30 to 34. The rate at which older Canadians sell their homes and move into other forms of housing is vastly overestimated by Canadian policy-makers, particularly at the municipal level.

• Further to the previous point, those aged between 75 and 84 have higher homeownership rates under the new definition than any age category under age 50.

• In 2021, less than one-quarter of all Canadians between the ages of 25 and 29 owned the home they lived in, either as an individual or a couple.

This new definition of homeownership from the Minnesota Fed is far more sensible than the traditional definition, and we are grateful that they created it. Where possible, we will utilize their definition in future work.

Canada’s fertility rate has fallen to a record low, but the conversation often focuses on whether people want children rather than why so many stop at two. As housing, childcare, transportation, and the opportunity costs of parenting have all become more expensive, having a third child has increasingly become something associated with wealth rather than ordinary middle-class life.

In this episode of DemograFix, Mike Moffatt and Cara Stern examine the economics behind family size. They discuss how the shortage of family-sized housing, rising costs, and changing labour market realities have reshaped the decision to have children, and what governments would need to do if they genuinely want to make larger families attainable again.

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: I’ve started noticing something at my kid’s school when I’m at pickup, or a birthday party, or just talking to other parents in the neighbourhood, I almost never meet a family with three kids. Occasionally it happens and I remember them because it’s notable enough. And the rare time when I do meet a family with three kids, my first thought is, “Oh, this is a wealthy family.” Either they got into the housing market early and built their wealth there, or they’ve got some serious family wealth, or maybe massive incomes.

Canada’s fertility rate hit a record low last year, entering ultra-low territory. Some of that is people not having any kids, but of the ones who do, two seems to be the maximum most middle-class families will have. I suspect many of these families are people who did the math and got to the same place most middle-class urban families are getting to right now, which is that a third kid would require things that we just can’t easily afford: space, time, and money.

Mike Moffatt: When things are unaffordable, they become a status symbol. Think of someone who drives a very high-end luxury car. They’re signaling to the world, or at least attempting to, that they have the resources to afford such a lifestyle. We’re seeing the same thing play out with families with three or more children. There’s a cohort of high-income, high-wealth families—think of one-percenters—that are having three, four, or five kids as a status symbol, let alone millionaires, billionaires, and trillionaires with 37 kids, some of whom have names that look like a cat stepped on the keyboard.

This is a real phenomenon, and we’ve seen in the data that billionaires have far more kids than the rest of us. If we look at the media about this trend of three kids as a luxury status symbol, there are a lot of articles out of the U.S. and the U.K.

Cara Stern: Yeah, even if it’s not in the media yet, I think there are a lot of people who genuinely think that is actually happening in Canada just because of the cost of living. You need a lot of money to be able to raise three or more kids.

Mike Moffatt: Absolutely. I often hear this when we’re talking about younger friends of ours—gossips that we are—who are lawyers and doctors, where we will say, “Oh, well they must be doing well because they just had their fourth kid, and I can only imagine what that costs.”

If large families have become this status symbol because they’re so unaffordable, that raises the obvious question of what has made having three or more children so unaffordable.

I’m a housing guy, so housing is the obvious answer. If you have three or more kids, you’re going to want a home that has at least three bedrooms, and more likely four or five. Those are incredibly expensive, particularly in our cities—what I like to call places with NHL teams.

Cara Stern: Based on National Occupancy Standards, a maximum of two people should share a bedroom, even if they’re the same sex. So even if you end up with three girls, for example, they couldn’t all share a room, otherwise you’d be considered under-housed. You need to have at least a three-bedroom home when accounting for the parents’ room. That is a guideline that determines what is considered appropriate housing in Canada, and I suspect many people agree with those standards. Most people, if you ask them what they would like to have for three kids, would say a minimum of two bedrooms, if not three.

Mike Moffatt: Knowing some families with three boys, I can’t imagine all three boys in the same room. Just the chaos and, quite frankly, the smell would not be fantastic. This three-bedroom thing is really important.

But of course, in Canada, we don’t really have three-bedroom apartments, particularly in high-rises. If you need something that’s family-sized, you’re probably looking at single-detached, semi-detached townhomes, or maybe some older low-rise apartments. You’re probably going to need that kind of ground-oriented housing.

Cara Stern: And three-bedroom family units are exactly what developers in Canada have stopped building. They’re just more expensive to build with current building codes, and politicians have been treating a studio and a three-bedroom as interchangeable units for the purpose of housing supply so they can say, “Yay! We are hitting our target. We’re getting this many units on the market.” But there’s a big difference between a studio apartment and a three-bedroom home; they’re not at all the same.

Mike Moffatt: We have these politicians representing our cities, both urban and suburban areas, who have this “unit is a unit” mindset. What they fail to recognize is that a high-rise apartment unit, while incredibly useful, houses on average half as many people as a full-sized home and is not as flexible. You can fit six single people in a single-detached home, but you can’t fit a six-person family in a high-rise unit. The types of units we build are important, and our politicians tend not to make that distinction.

You’ve got the housing side of it, but you’ve also got the childcare side of it. When I talk about childcare, I want to use the term as broadly as possible: stay-at-home parents, daycares, full-time nannies, and so on. The full-time nannies piece is important. I think that is how a lot of these very high-income families are able to have three or four kids, as it allows both parents to continue working. It almost adds a third parent to the household and ensures the kids are looked after.

Cara Stern: For full-time care, the other option is to have one parent stay home, but that’s a practical impossibility for the middle class or even the upper-middle class if they want to have a decent-sized home in an urban area on a single income. It’s pretty much impossible to do that nowadays. There may have been a time when it was possible, but those days are over. That is, of course, because of housing prices; both people need to work full-time to afford these prices. This is a big change from the past, where houses could be purchased with one income or one-and-a-half incomes, meaning someone could work part-time, giving them time to take care of the household and the kids—especially since school finishes a lot earlier than most jobs do.

Mike Moffatt: Let’s review: if you’re a middle-class family in an urban or suburban area and you want to have three or four kids, a full-time nanny is out because you just can’t afford it. Being a stay-at-home parent is out because it’s no longer feasible due to the price of housing. That leaves daycare as the only plausible option.

Cara Stern: And while that’s helpful, it’s not a one-size-fits-all solution.

The theory the researchers had was that affordable childcare made returning to work easier, and once you’re earning again, stepping away for another baby just costs so much money.

Mike Moffatt: Cara, I love it when you go full Econ 101. Even though you didn’t use the term, you were talking about opportunity costs there. There is a massive opportunity cost for women, including the impact on career progression, connections, missed promotions, and so on. Having more daycare and more attainable daycare is fantastic, but it’s not a panacea.

Cara Stern: No matter how you look at it, if you’re taking time off work, there is going to be an impact, even if your maternity leave policies are pretty good. A woman in her early 30s has been working for ten years and has built up seniority and a salary, so the actual financial cost of leaving that career for a third parental leave is much higher than it was the first time. Later on in your career, you’re leaving more money on the table and missing out on promotions. It’s very difficult to catch up when you’ve been taking so much time off. Cheaper daycare helps people get back to work faster, but once that woman’s back at work, another baby means starting that clock all over again with time off, losing out on earnings, and everything else that comes with it. It’s a big sacrifice that a lot of women realize the weight of, especially after doing it once or twice.

Mike Moffatt: There’s a bit of a caveat when we look at the Quebec experience of the 1990s because cheap childcare wasn’t the only policy they introduced. It doesn’t make for a perfect natural experiment because they simultaneously cancelled a cash baby bonus that had existed since the late ‘80s, and that bonus was specifically weighted toward larger families.

Before that cancellation, having a third or fourth child was worth about $8,000 paid out over five years. That program was cancelled when childcare was introduced, so it’s hard to know how much of the Quebec experience was due to the introduction of childcare versus the removal of that program. Researchers have noted that it’s hard to disentangle those two effects when looking at the overall effect of the Quebec reforms in the 1990s.

Cara Stern: But what I think is actually the more important point for today’s viewer in Toronto, Vancouver, or Ottawa is that those studies measured the effects of a policy introduced when housing cost a fraction of what it does now. My hunch—and I want to be clear that this is just me guessing, not a formal finding—is that a Quebec-style program does more for fertility today than it did in 1997 because the overall cost of living context is just so much more brutal. I always say I would not have had a second kid if childcare was still $2,000 a month or more because the math just wouldn’t work. I couldn’t figure out how to make it work in my budget.

Mike Moffatt: Absolutely, and that’s really important to note. This comes up a lot in policy work where I’ll get questions like, “If we raise or lower development charges, how much of that is passed along to the end consumer?” A lot of times, it depends on the underlying market conditions. The same thing applies here: the Quebec experience was in a very different real estate market. It’s fair to expect some differences when porting a policy from the 1990s under one economic circumstance over to the GTA in 2026, where the impact is likely to be different because of a different housing context.

Cara Stern: Childcare policy might help, particularly for getting to a first or second child at an earlier part of your life, which gives you more time biologically to have a third kid if you want. A lot of people don’t start having kids until their mid-30s, and then you have to move quickly if you want a third. There’s also just so much working against you between housing costs, opportunity costs, and career timing all stacking up at the same time.

Mike Moffatt: Yes, and I also think the expectations we place on parents play a big role here. This isn’t the 1970s or 1980s where latchkey kids were the norm. It wasn’t out of the ordinary for a kid in grade three to wear a house key on a shoelace around their neck, let themselves in after school, pour a bowl of cereal, and watch cartoons. Not only is that not normal anymore, but in many cases, it’s not even legal. You can’t expect kids to do that. The context of raising children has changed, plus there’s a growing expectation that kids be enrolled in hundreds of increasingly expensive activities. Having one child play hockey is outrageously expensive; having three or four seems downright impossible.

Cara Stern: It’s not just expensive, it’s also time-consuming. There is a big logistical challenge in trying to get multiple kids to all of their practices on time. If you want to have any sense of self as a parent, you probably want to have your own activities and hobbies, too. Trying to work all of that together is incredibly difficult when you have more people to coordinate with.

Interestingly, there’s data showing women spend more time engaging actively with their kids than they did in the past, which is pretty surprising because women’s participation in the workforce is obviously much higher today than it was when Mike was eating his Froot Loops and playing Atari.

Mike Moffatt: To be fair, that was just last week. But in all seriousness, I imagine parents are having much higher-quality time with their kids than they did in the past.

Cara Stern: I can see how when you’re working all day, you want to be very focused on actively playing with your kids compared to when you have all day to spend with them. This is something I often tell moms who are dreading the end of their maternity leave. There is this angst about going back to work because you feel bad that you’re going to get so much less time with your baby.

What I always tell them is that the quantity of time you spend with your baby decreases when you send them to daycare and go back to work, but the quality goes up. It’s easier to really enjoy that time together when you know it’s limited, rather than feeling like you just have to get through the day until the next nap.

Mike Moffatt: And those kids are now old enough to learn how to play Atari.

Cara Stern: I don’t know if a one-year-old can, though I suspect you did at that age. It’s not just the time cost; you also have to cart all those kids around to sports, school, and daycare. You’ve got to coordinate with your partner about who’s taking which kid and figure out how to manage three different schedules. When I think about three kids, I think about transportation, which is most people’s second-biggest expense after housing. It isn’t cheap to get kids around. SUVs and vans are expensive, which you probably need because fitting three kids in car seats into a sedan is incredibly tight. You need a specialized cargo bike if you’re biking, and transit is tough to wrangle with multiple kids—though at least most cities in Canada have free transit for kids, which helps. Of course, that doesn’t help if you had to drive until you qualified for a place that doesn’t have transit.

Mike Moffatt: That coordination is huge. When you’ve got two kids and two parents, you can play man-to-man defense—”I’ve got him, you’ve got her.” But when the kids outnumber the parents, it’s like killing a penalty in hockey or being a man down in soccer: you have to transition to zone coverage, and that can be tricky.

Cara Stern: When you add it all together, the numbers are brutal for families in urban areas. If a family is doing the math in a two-bedroom in Toronto, Ottawa, or Vancouver and wants a third kid, they look at it and say, “We don’t have the bedroom, we can’t afford to buy the bedroom here, and even if we cleared that housing hurdle, one of us is probably stepping back significantly at work for the next five years.” What happens? They’re going to move out of the city.

Cara Stern: That happens not just in Canada. A researcher looked at this in Oslo a couple of years ago, surveying nearly 3,000 families in inner Oslo, both those who left and those who stayed. He found about 70% of children born in inner Oslo leave before school age, and the single strongest predictor of which families left was wanting a separate bedroom for each child.

Mike Moffatt: It’s always been the case that you get more space in the suburbs than in cities, but if you want to retain at least some of those families, cities need to legalize building family-sized housing, whether that is at the edge of town, infill, or what have you. You’ve got to be able to build those three, four, or five-bedroom units.

Cara Stern: What does this actually require to solve policy-wise?

Mike Moffatt: The housing piece is the most concrete. Three, four, and five-bedroom family-sized units need to exist in cities at prices that a dual-income professional family can access, not just those in the top 1% or 0.1%.

Cara Stern: Let’s acknowledge that right now, for the most part, having a third kid in Canada, especially in a city, is a luxury—and it shouldn’t be. People can lower their standards to make it work, but as always when it comes to birth rates, women don’t have to have kids. If the situation doesn’t exist to make it desirable, it will not happen.

Mike Moffatt: It really comes down to affordability.

We might get feedback saying, “Well, low-income people have lots of kids, why can’t the middle class?” But that is simply not true. In Canada, low-income families tend to have very few kids, so it really comes down to this affordability piece across the board that affects both the middle class and lower-income Canadians.

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 the relative merits of Froot Loops versus Cinnamon Toast Crunch, 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:

More Crowding, Fewer Babies: The Effects of Housing Density on Fertility

The ultimate status symbol? A big family

Opinion | Three Kids? You Showoffs. - The Washington Post

Why are some families with children leaving the inner city and other staying?

Home Alone | Cardus

Fertility Incentives in Canada: A Cohort Analysis

Brought to you by the Missing Middle Initiative

Mike Moffatt and Sabrina Maddeaux break down why Canada’s housing goals should reflect today’s slower population growth, why what we build matters more than raw housing starts, and how smarter policies on affordability, immigration, and family-sized homes could solve the housing crisis faster than many think.

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: During the 2025 election, the federal Liberal Party made a campaign promise that they would double Canada’s current rate of residential construction over the next decade to reach 500,000 homes per year. So far, it’s not going well. Housing starts have been stuck at the 250,000 level, and the Canada Mortgage and Housing Corporation forecasts that starts will actually fall each of the next three years.

Analysts have questioned whether or not that rate of homebuilding is even possible. But now, with Canada’s population growth slowing and the aging of the baby boomers, analysts are also questioning whether or not building a half million homes each year is even necessary. Mike, you are one of those analysts, and you’ve done a lot of research on housing targets. Does Canada really need to build 500,000 homes a year?

Mike Moffatt: Short answer: No.

Back when Canada’s population was growing by a million people per year, we would have to build that many homes —or actually even more than that — just to keep pace. But since the federal government has reduced immigration targets, it’s scaling back on the number of non-permanent residents in Canada; half a million a year is, frankly, overkill.

Sabrina Maddeaux: That’s interesting. So I’m curious where the Liberal Party got their 500,000 target to begin with. Did it just sound like a good number, or were they basing this on prior immigration targets?

And these are really solid reports. I would say their methodology on how they arrive at that figure is a bit opaque. I’d like to see a little bit more transparency in their model, but it’s a good report. And the thing I really like about it is that it recognizes the link between housing supply and affordability. So their estimate on the size of housing shortages or how many houses you need each year is a function of the overall level of affordability you’re trying to target. If you want to get deep affordability, you have to build more homes. If you’re less ambitious, you build fewer homes.

Though all of this housing starts discussion makes me believe that governments, and not just the federal government, are overfocused on the wrong targets because the general public doesn’t care about how many housing starts there are. They care about whether or not they can afford a home. So I think governments might be better off focusing on metrics that the general public can relate to.

In your mind, what would the housing market look like if the middle-class housing crisis were over? And what data would you be looking at?

Sabrina Maddeaux: The public cares about whether they can afford rent or a home that they want to raise a family in. So the government ultimately should be focused more on metrics that show whether that is possible.

Now, I think housing starts— they feel that’s something they can control. It’s an easy metric, and it’s less complicated than talking about other areas of supply and demand, like immigration. But really, the government should be focused on things like price-to-income ratios, the proportion of young people still living at home with their parents, homeownership rates, and also whether the housing supply is properly allocated in terms of the number of people living in a home versus the number of bedrooms. Can seniors downsize if they want to in their own communities?

All of the stats related to those things probably aren’t looking too good and are much less favourable to governments and are going to be harder to fix long-term. So I can see why they would just like to go with starts. And starts is also a number that they seem to constantly manipulate. What does that mean? Are those single detached homes? Is it just any unit? Is it dorms as well as those long-term care homes? So I think that’s why a lot of governments turn to starts as an easy indicator to point to.

Mike Moffatt: I think you’re right. And I think the fact that it does obscure what’s going on may actually be a benefit to governments. Because if you focus on price, then you raise questions like, “Do you want my existing home price to go down?” or a metric like a price-to-income ratio still invites those questions.

So I get what governments are doing with housing starts. It’s a bit easier to measure. They’ve got an existing methodology. It’s not as controversial. But at the same time, I do think we would be a little bit better off if governments had a little bit more transparency on exactly what they were trying to accomplish.

Sabrina Maddeaux: Starts are obviously focusing on the supply side of the issue, where there’s also the demand side, which has really gone off the rails due to unsustainable immigration targets in recent years. So these targets we’re talking about for starts do assume that the population is going to grow at a certain rate. But we have seen a lot of the pressure taken off the housing market through reductions in immigration.

My view is that there needs to be further reductions. Do you think [the changes they’ve made] is enough to fix it over time?

Mike Moffatt: It certainly has taken the pressure off. And the federal government admits that itself. They said so outright in the last budget. But once the reductions in non-permanent residents are fully phased in a couple of years from now, Canada’s population is set to grow between about 300,000 and 400,000 people a year.

Just do the math on that. You don’t need to be building 500,000 homes a year in a country whose population is growing by 300,000 to 400,000. You don’t need two homes for one person.

You do need to build some. The amount isn’t zero if you’re growing that much. And we still have a large pre-existing housing shortage to account for. So you need to build quite a few homes, but it’s certainly taking a lot of the pressure off.

Sabrina Maddeaux: It’s that pre-existing shortage I’m very much concerned about because even if the immigration targets are brought down over the next couple of years, we had such unsustainable explosions in numbers over the last five years, in particular, even ten years, that we have a lot of catching up to do. And then when we talk about starts, what types of starts?

I’m also concerned that long-term, the government hasn’t really bought into the idea that immigration policy needs to be sustainable and matched to housing targets and health care capacity and infrastructure, and that this is a quick patch over the next couple of years, and then we’ll just go back to where we were before.

Mike Moffatt: That is a real risk. And housing needs are highly dependent on immigration policy assumptions. If the population growth rate changes, so too do future housing needs

The developers who are continuing to build are making the same bet that you’ve discussed, where they’re saying, “We don’t think it’s politically sustainable to have immigration rates this low. We think governments are going to turn the taps back on for economic reasons, because the business community is going to want more labour and so on. So we’re making a bet that immigration is going to go up, and we want to have the units there to account for that increased demand.”

So it is really funny how the industry fully recognizes that really what they’re betting on is the future path of immigration policy more than anything else.

Sabrina Maddeaux: That’s really interesting. And that’s why I think immigration will continue to be a top-three issue when they’re polling the public over the next few years, because there’s going to be a lot of pressure on both sides. And I think that politicians, in general, have trouble making hard choices. And immigration reductions are, by nature, very difficult choices. And especially in the federal Liberal Party, which obviously now has a majority over the next two years -they’ve traditionally been very pro-large-scale immigration, and there’s going to be a lot of ideological pressure from within to return to that.

Mike Moffatt: I do think it is probably the number one issue worth watching, because as you recognize, it affects the demand and supply of everything. And there is a lot of uncertainty there.

Now, when we go to housing, we can talk about the number of people and the number of homes, but you’ve also mentioned a couple of times that what we build also matters. For example, high-rise apartment units house roughly half as many people as ground-oriented homes, like townhouses. High-rise apartments, you tend to be talking about one, maybe two bedrooms. Townhomes tend to be three or four bedrooms. So our housing targets and housing starts data are a bit misleading, because it treats all units the same; it treats those one-, two-, and studio high-rise apartment units, they all count as a start, the same as a three- or four-bedroom townhome. That’s also a start.

And because over the last 20 years, Canada has shifted from building mostly ground-oriented housing, like those townhomes and single detached and so on, to mostly high-rise apartments, the types of units have changed and the amount that each unit can house has changed. None of that is to suggest that building high-rises is bad. We need lots of it. But it does mean that building five high-rise units doesn’t have the same impact on the housing crisis as five townhomes. If we’re going to be relying on high-rises to fill some of this housing shortage, we need to be building closer to ten of them to have the same relative impact as building five townhomes. And our data doesn’t really capture that.

Sabrina Maddeaux: And if we are building high-rises, then they need to have livable units with good layouts, with more bedrooms as well, because the real shortage is the shortage of family-sized homes. That can be in high-rises, and it can be townhomes, but single detached is really what a lot of people envision when they want to raise a family. And there is still such a shortage of those. And certainly anything that resembles affordability near a major economic centre. So with that in mind, how many homes do we actually need to be building each year?

But regardless of the type of homes, they’re not just going to happen. Those homes won’t get built if people can’t afford to buy or rent them. It’s just simple economics. So Canadian governments need to do a lot more to get the cost of delivery and construction down. And that includes everything from land costs to approval costs, taxes, and fees like development charges and HST.

But I would say that all of this is solvable within the next decade. We don’t need to hit 500,000 housing starts a year unless we have some big changes to immigration policies. So I think if governments are willing to make some tough decisions on issues such as taxes and land use policy and how infrastructure is funded, I think we can get to middle-class affordability within the next decade or so.

Mike Moffatt: And that’s a good thing because Canada’s never even hit 300,000 housing starts a year.

Now, I do think half a million a year would be possible with some rather radical government reforms on land use, zoning and so on. Reforms that they haven’t really shown much of a willingness to do. And half a million a year could be needed if we decide to aggressively increase population growth and immigration. But at the end of the day, your country’s only growing by 300,000 people a year; you don’t need to be building 500,000 homes a year, even if you’re dealing with a pre-existing shortage. Eventually, those homes catch up with population growth and do so pretty quickly.

Sabrina Maddeaux: And our demographics also are working in our favour here, as baby boomers will inevitably be turning over a lot of those larger suburban homes over the next 20 years.

Mike Moffatt: That’s absolutely true, though we have to note that those suburban homes have actually traditionally been very popular with newcomers to Canada, along with first-generation Canadians. So, yes, a lot of them will be turning over, but many of them will be inherited by family members, and others, I think there will be a fair bit of demand for those homes, particularly from relatively new Canadians.

Mike Moffatt: Exactly. If we had much more nuanced targets, if we focused more on the cost of delivery rather than the number of housing starts, we could end this crisis much faster. And we certainly wouldn’t have to wait until the year 2060, as the Federal Housing Advocate suggests.

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

Mike Moffatt: If you have any thoughts or questions about being trapped in a small room, doomscrolling on your phone, please send us an email to missingmiddlepodcast@gmail.com.

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

Additional Reading/Listening that Helped Inform the Episode:

Funded by the Neptis Foundation

Brought to you by the Missing Middle Initiative

As youth unemployment reaches levels not seen in decades, this episode examines how the Temporary Foreign Worker Program may be reshaping Canada’s labour market, and why the people paying the biggest price could be young Canadians looking for their first job.

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: In a free market, when demand goes up, prices rise. And when supply goes up relative to demand, prices drop. The same applies to the labour market. During times of high unemployment, employers have the power to dictate wages and working conditions. But when unemployment is low, it’s harder to find workers, so wages should go up. Canada, though, has completely messed with that, ensuring that it’s never really an employee’s market in this country.

Mike, what was your first job?

Mike Moffatt: Like any good Gen Xer, I started working at an absurdly young age. In my case, it was the age of eight, and I delivered newspapers. I did that all through elementary school, high school, and even through a couple of years of university. But my first actual paycheck job was going door-to-door for Greenpeace, trying to sign up people for donations. I really didn’t enjoy that job. What sticks out to me about that time was how hard it was to find that job. Back in the early to mid-1990s, the youth unemployment rate was in the 15% to 20% range. Folks my age were just taking whatever we could get.

Cara Stern: Today’s youth unemployment rate is bad, but it’s actually not as bad as you had it. You Gen Xers win again, though by “win” I mean lose. Given all the other challenges young people are facing these days, the 13.4% unemployment rate feels like a kick in the gut.

Mike Moffatt: It really is. As much as there were those issues in the early to mid-1990s, governments did something about it. Back then, they stepped in and created programs to help with youth unemployment, some of which still exist today.

Cara Stern: Even though you may have had an even worse job market than today’s Gen Z, at least you didn’t have to compete so heavily with a huge number of people who have been hired through the Temporary Foreign Worker Program.

We’ve covered the Temporary Foreign Worker Program a lot on this podcast, but one thing we haven’t talked about is how the stream of low-wage labour impacts the job prospects for young people in Canada.

Mike Moffatt: It’s not just the Temporary Foreign Worker Program. Students are facing, and have faced over the last few years, way more competition for those jobs, mainly because the student population has exploded, especially with so many international students. The youth population grew by over 14% between 2021 and 2025. That’s a combination of temporary foreign workers, international students, and a little bit of immigration as well. There’s been a massive supply of young workers competing for a fairly limited number of jobs.

Cara Stern: Right before I started university, international students could only work on campus. But then that changed so that they could work anywhere for a maximum of—well, it’s up to 24 hours per week now, as well as an unlimited amount between semesters.

This is the kind of thing I’m talking about when I say governments are messing with supply and demand in the labour force. More young people are looking for work, which means more supply of workers in the labour market for lower-skilled jobs. That means a higher unemployment rate for youth.

Mike Moffatt: It really does. Again, there are so many young workers competing for a limited number of jobs. If we focus just on the temporary foreign worker issue for a moment, the TFW program has been around a while—it’s older than I am, having been around since 1973.

Nowadays, it’s not just one bucket of very specialized labour. You’ve got a high-wage stream and a low-wage stream. You have the primary agriculture stream, which goes back to the ‘70s, and you have this fourth stream which is specifically dedicated to supporting permanent residency. The program started out in a limited sense but has really ballooned over the last 50 plus years.

Cara Stern: What we want to talk about today is that low-wage stream. That’s the stream that seems to be having a significant impact on the youth unemployment rate.

Mike Moffatt: And it wasn’t always like that. When the program started in the early ‘70s, it was very limited to a certain set of occupations: very high-skilled roles, some academics, and specific agricultural roles like picking tobacco.

But that changed in the early 2000s when the low-wage stream was created. Suddenly, employers could bring in people for pretty much any job, especially jobs that only needed a high school diploma or a bit of on-the-job training. These were the jobs that traditionally students worked. Students weren’t just competing for tobacco-picking jobs in Tillsonburg anymore; now they’re competing for fast-food jobs and positions all over the economy. As long as the Temporary Foreign Worker Program has existed, there have always been concerns around what it means for young workers, but now even more so because that competition is so much more fierce.

Cara Stern: We’ve seen a big backlash to immigration over the last few years—so much so that Canada has reduced the number of people it lets in on the permanent residency side of things.

Because of that backlash and the spiking youth unemployment, they changed the rules again this past April. Now, employers have to advertise a job for eight weeks before they can even apply to get a temporary foreign worker, although some designated sectors, such as healthcare, food manufacturing, and accommodation, are eligible for a higher cap than that.

Mike Moffatt: We see it in some of those industries like the accommodation industry, the hospitality sector, hotels, motels, and so on. Think of jobs like the front-desk clerk, housekeeping staff, janitors, and accommodation service managers—jobs where you can go above that 10% cap. A lot of those jobs were traditionally filled by students or by younger workers.

Even with these reductions, the fact that these exemptions exist to allow for higher levels of temporary foreign workers to be hired tends to disproportionately push out, or at least cause increased competition with young workers.

Cara Stern: What got us talking about this most recently was an article being passed around in our group chat with the headline, Tourist Towns Desperate for Workers in Alberta. It basically said that Alberta’s tourism industry is facing a severe labour shortage, with mountain towns like Banff and Canmore being particularly affected.

Employers highlighted two primary barriers: a critical housing shortage that makes it unaffordable for staff to live in the region, and tighter federal regulations on the TFW program, which have slowed their ability to fill vacant roles with international staff.

Mike Moffatt: When you guys were passing this around the group chat, it drove me absolutely up the wall. I found it incredibly maddening because, first of all, the article presents no actual evidence that there’s an unusually high number of job vacancies relative to previous years. That might be true, or it might not—we don’t know, we’re never told.

But suppose it is true. Let’s say everything they’re saying is factually accurate and could be backed up by data. Employers could just raise their wages and attract more people to work there. If they can’t find enough people to work at a certain price, raise the price. Yes, that would have knockdown effects; if you raise the price of labour, you may have to charge more for rooms or meals. But it also means that young workers would make more money, and it would create incentives for companies to innovate and invest in technology so they’re less labour-intensive.

We talk a lot in this country about our productivity issues, but every time a company is forced to be a little bit productive because they can’t find enough workers, the government comes in and says, “No, no, no, don’t invest in technology. We’ll just make it easier for you to hire a bunch more low-wage workers.” It drives me absolutely up the wall.

Cara Stern: I find this part of the program very offensive to workers. I’ve heard employers say they can’t find workers, that young people just don’t want these jobs. But there is a price where people would want those jobs. If an employer is not getting the number of people they need, if they just raise wages, they will find someone. There is a number where people will do these jobs. What I want people to get from this is that if you hear them talking about labour shortages, what that really means is an employee’s market, and that should be the time when wages go up.

I also think it’s interesting that you get this constant push from employers saying they need more workers, then the government expands the program, then you get spiking youth unemployment, then there’s a backlash and they implement new restrictions, and then employers say they can’t find people. It’s a cycle that keeps going on and on.

Mike Moffatt: It does. I think it’s symptomatic of a larger problem in Canada that goes way beyond the TFW program. In any other sector in the economy, prices are allowed to adjust. If the demand for gasoline goes up because we all want to take a bunch of road trips, we don’t suddenly have gas shortages everywhere; we let the price adjust upward. In economist-speak, we get the quantity supplied and the quantity demanded to stay in balance, and when you get to a gas station, there’s actual gas available to buy.

But for some reason in Canada, we don’t treat labour the same way, at least not in the same professions. When the demand for workers goes up, we don’t have firms competing with each other for workers and putting upward pressure on wages. Instead, we declare there to be a shortage and have governments put policies in place to eliminate that competition.

It’s like saying, “Well, there’s a shortage of 50-cent cups of coffee in my neighbourhood.” Okay, that’s true, but if I’m willing to pay three bucks, I could find a half-dozen coffee shops to sell to me. It’s not a real shortage; we have to be able to allow prices to adjust.

Ultimately, what Canada does is insulate businesses from capitalism, which undermines a lot of its benefits. But us non-business owners have to deal with the downsides. It’s a very unequal system.

Cara Stern: I totally get why employers are stressed about seasonal workers because that’s a hard business to be in when you need people for such short periods of time. You’re asking them to move or to give up part of their life to work for a short period, and it’s tough to deal with those seasonal swings. But that’s just the nature of tourism. Historically, places like the Jasper Park Lodge and the Banff Springs Hotel solved this by building staff housing right into their business models.

Mike Moffatt: Absolutely. Any good Gen Xer knows this from the 1987 classic movie with Patrick Swayze and Jennifer Grey, Dirty Dancing. If you haven’t seen it, make time for it—make a weekend of it. Watch Ferris Bueller’s Day Off and some other great ‘80s movies, but make sure you watch Dirty Dancing.

Cara Stern: For decades, resorts relied on students looking for spring and summer work, and that’s what we saw in the movies. Since these hotels were built by the railways, they would sometimes pay a student’s train ticket to get there, which was a strategic move. By covering that, they made sure that if you were tempted to quit, you maybe wouldn’t because it would cost you to get home, versus if you made it through to the end of your contract, it wouldn’t.

In fact, according to our producer’s mom, Sally Martin, who worked at Jasper Park Lodge as a chambermaid in the '50s, the hotel actually preferred employees traveling from the Maritimes because it was a far journey, so it would cost them more to get home. There was a better chance they would actually stay.

Mike Moffatt: Big shout-out to Meredith’s mom here.

To be clear, when Cara mentioned those two historic hotels, they weren’t the employers who were complaining about the articles, so we’re not throwing shade at those two fine institutions. Rather, we’re trying to establish the idea that resort towns across Canada have always experienced swings in the demand for labour because that’s how the business model works, and they found ways to adjust without the government stepping in to create temporary foreign worker programs.

One of the main ways these hotels were able to do that was to hire students who happen to have a four-month break in the summer when these places need more staff. They could entice them by saying, “Hey, come out to Banff or Jasper, and we will give you free or subsidized housing, and we’ll pay for your travel to get there and back home.”

Cara Stern: The thing I don’t understand is that those temporary foreign workers have to live somewhere, too. You say it blunted the need for housing, but how does that work?

Mike Moffatt: You find that people are less likely to complain about their housing conditions if complaining gets them deported. It’s an issue with how the Temporary Foreign Worker Program is run. Everybody needs housing, but things change a little bit depending on who’s getting hired and what ability they have to enforce their labour rights. Unfortunately, we know that temporary foreign workers have a much harder time getting their rights enforced than other workers.

Cara Stern: That makes them ideal workers for a lot of bad employers.

I will say, though, many companies do still hire locally, and they attract people from across the country by offering highly subsidized housing and food. I have a brother-in-law right now who’s in the Columbia Icefields, and while they didn’t pay for his ticket to get there, he does get a bonus for finishing the contract, cheap housing, and food covered. It’s a really good experience. If I were in university, I would absolutely take one of these jobs because it’s such a unique thing to do—something you wouldn’t do at any other point in your life. It fits so neatly into the school year when you get that four months off. It’s hard to find a regular job in a city for four months because people typically want someone long-term. They do still exist, they are still out there, and I highly recommend people look into it.

Mike Moffatt: Absolutely. I’m sure it beats going door-to-door soliciting donations.

Cara Stern: It probably does, and you don’t get to be that person everyone hates when they open the door and want to get out of the conversation. I would hate to do that job because people are just dreading it when they open the door and see you, right?

Mike Moffatt: I’d just be like, “Cara, you care about the environment, right? Of course you’re going to write me a cheque.”

Mike Moffatt: “Now, of all times, we don’t need as many workers.” I’m sure that had to do with it and not the other conditions going on in our economy and not the fact that they are seeing sales decline and their brand value absolutely evaporate. “No, no, no, it’s the economic conditions—that’s what’s changed here.”

Cara Stern: Or the threat of Dunkin’ Donuts coming to Canada, helping them realize they need to change the narrative on their hiring practices because they’ve kind of become the poster child for the Temporary Foreign Worker Program. I think they thought people would see this and think it’s great, but I saw mostly people saying, “Oh, so you could have been doing this all along. This was a choice you made.”

They could have hired locally because, while they say it’s no longer necessary, the rate of youth unemployment has been high for years. It’s not that much higher now than it was when they were lobbying to get 30% of their businesses filled with temporary foreign workers. I don’t believe their argument, and I don’t think most people do. It’s nice that they’re doing it now, and I’m glad finally this is happening, but it doesn’t really buy them the goodwill they thought it might.

Mike Moffatt: It’s like saying, “We no longer kick puppies.” Great, but I’m not going to give you credit for that. It feels like this backfired a little bit, and they may have been better off to downplay this and just make those changes instead of trying to position themselves as being corporately responsible. It created a backlash where people are just like, “Come on, guys, you’re not good corporate citizens, and don’t try to pretend otherwise.”

Cara Stern: To sum up, Canada’s youth are facing a significantly higher unemployment rate this summer that is more than double that of the regular workforce, and that’s historically much worse than normal. It isn’t as bad as the 1990s, but it’s close.

Mike, how do we get out of this doom loop?

Mike Moffatt: We have to scale back the Temporary Foreign Worker Program and put it back into its intended use. That’s not to eliminate it entirely; there are reasons why you might need a temporary foreign worker. Let’s say you are refurbishing a nuclear power plant and there’s an expert in Germany who can help because they have skills and experiences you can’t find here—absolutely, that’s the type of thing this should be used for. But the idea that we can’t find somebody to be an assistant manager of a Dairy Queen or pour coffee just doesn’t make any sense. We really need to eliminate this for lower-skilled jobs.

If we find that there are chronic labour issues there, you could settle that through permanent residency. If they’re good enough to work here year after year, they’re good enough to live here, raise a family, and contribute to Canada’s economy on both the supply and demand sides, rather than this endless cycle. It really comes down to that. Don’t be afraid to let the economy adjust, and if certain business models don’t work anymore, they should be allowed to die. It shouldn’t be the role of government to prop up companies with unworkable business models that rely on massive amounts of exploitable temporary foreign workers.

Cara Stern: Something you said there is really important. It’s not that there’s something inherently wrong with people coming here and working low-wage jobs; it’s the fact that they’re temporary and don’t have the same rights as other workers. As someone who cares a lot about workers’ rights, I think you need some sort of path for people to come here and stay, because it’s so easy to take advantage of someone who has to leave the country if they complain.

It’s not a progressive thing to support this program, even though I understand there are a lot of progressives who support immigration for all different kinds of reasons. This is about working conditions, and that’s something people need to realize. It’s so important that they have the same rights as everyone else in Canada rather than having this second class of citizens.

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 why Tim Hortons shouldn’t get a participation trophy for hiring locally, 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:

Tourist towns ‘desperate’ for workers in Alberta

Tim Hortons says it will hire locals, scale back temporary foreign workers

Youth unemployment in Canada jumped 57% in 3 years, hitting levels previously unseen outside a recession

Youth unemployment in Canada near record highs since 2022; unprecedented levels outside of a recession

The Extraordinary Increase of Youth Unemployment in Canada

Temporary ForeignWorkers in Canada:Are They Really Filling Labour Shortages?

StatsCan: Drayton Valley statistical area sees lowest unemployment in Alberta at 4.9 per cent

Canada’s Temporary Foreign Worker Programs

Businesses face new limits on temporary foreign worker program

3 problems with the temporary foreign worker program and 3 possible fixes, according to experts

Brought to you by the Missing Middle Initiative

Mike Moffatt and Sabrina Maddeaux unpack the surprising reasons families continue to leave the GTA, Metro Vancouver, and Montreal at near-record rates, exploring how housing costs, crime, mental health, community, and urban planning are reshaping where Canadians choose to build their lives, and what policymakers still aren’t getting right.

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: Canadians are continuing to move out of the GTA, Metro Vancouver, and Montreal at near-record numbers. Now, a lot of people thought that return-to-office mandates would reverse this trend, but it’s barely made a dent. And it’s not older people cashing out of their expensive urban homes and moving to cottage country, either. Over two-thirds of the domestic population losses are under the age of 45. Today we look at why - from housing prices to mental health.

Mike, you’ve been known to make a lot of predictions. Some you’ve been right about and some, not so much. Now, one that you didn’t exactly nail is how much the end of the pandemic and the push to have workers return to the office would impact the exodus of families out of Canada’s largest cities. Can you walk us through what’s happening and why you were so wrong?

Mike Moffatt: I am happy to walk you through why I was wrong.

At some point, we’ve always had a net migration out of our big metros. So in the first decade of the 2000s, the metro areas of Toronto, Montreal, and Vancouver collectively tended to lose about 37,000 people to the rest of the country each year. So what that means is 37,000 more people would leave the GTA, Vancouver, or Montreal and move to Edmonton, Tillsonburg, or somewhere else in Canada, then move in the opposite direction - actually move to one of the big metros.

I want to be clear when we say Toronto, Montreal, and Vancouver; I’m talking about their metro areas. So Toronto includes Oakville and Markham, Vancouver includes Surrey and Burnaby, and Montreal includes Laval, and so on. So it’s not just the core city.

Sabrina Maddeaux: And to be clear, this outmigration doesn’t mean that the GTA’s population was actually falling?

Mike Moffatt: Correct. There are still births, immigrations and so on. So this is just looking at domestic migration - the number of people moving out of one community in Canada to another community in Canada.

So if we fast-forward to the first half of the 2010s, this trend picked up. An increase from about 37,000 to 45,000. But it really took off around 2015. It doubled to about 70,000 people before the pandemic. And then during the pandemic, it doubled again because of work-from-home and some of those other things that we describe. It peaked at about 158,000. It’s cooled off since then, but it’s still near 130,000 a year.

So this is where I got it wrong, because I thought that once the pandemic was over and companies would try to get people back in the office - which they have with some success - we’d go back to being in that 60 to 70,000 range, or perhaps even lower, as people moved back into the GTA. I totally got that one wrong. We’re still way above where we were before the pandemic, and it doesn’t seem to be changing any time soon.

Sabrina Maddeaux: And it’s not just retirees selling their multimillion-dollar homes in, let’s say, Cabbage Town and moving to Muskoka.

Mike Moffatt: It’s not just retirees, though we do see some of that in the data. That is a real phenomenon that occurs, and you talk to realtors out in cottage country, and they’ll tell you that this is happening.

So this is early career professionals, which is kind of strange when you think about it. These are people who are starting their careers, and they’re choosing to move away from Canada’s most economically dynamic cities. And housing costs are obviously a big part of that story. But I’m a housing guy, so I tend to see everything as a housing problem. As the old saying goes, if all you have is a hammer, everything looks like a nail.

So I thought it might be helpful to discuss reasons besides housing costs why young families are moving to other communities. One is something that you’ve written about quite a bit, and it’s the perception of crime and disorder. We had an episode on this a while back. We’ll link to that in the show notes. But I’d love to get your view. How much do you think perceptions of crime and disorder are playing out, and people leaving the GTA and moving to other communities?

Sabrina Maddeaux: It’s a big one. I think affordability is still the key factor, but there are also social factors. And one of those is not just the perception but the reality of crime and disorder and chaos in our cities that has really increased over the last five to ten years.

I see it every day, and it’s not just in one neighbourhood or another neighbourhood. It’s really across the board at this point. You have the major things that you see on the news, like car thefts and break-ins, which are happening more and more frequently. Everyone knows multiple people this has happened to. But even when you take a streetcar to work or from work, as I do every day, more often than not there’s some sort of altercation.

The other week, there was open hard drug use on the streetcar I was coming home on. And a woman who then decided to pee on the streetcar floor multiple times. People yelling at other passengers or kicking things. Often I take the streetcar home and this is a regular occurrence, not a one-off. Often, someone is either having a severe mental health episode or clearly using hard drugs and owns the back third of the streetcar, and everyone else on that streetcar is so scared and uncomfortable that they’re crammed up like sardines, even though there should be more than enough space on the front two-thirds. And there’s really no enforcement, no solution to any of this.

And I hear a lot about women getting off the streetcar early because they’re scared. I mean, imagine being in that environment alone late at night, coming back from a shift, and then you throw kids into the equation. I don’t think really anyone ideally wants to raise a kid in an environment like that, and parents and prospective parents are rightfully scared. So all of this does contribute to people saying, “Hey, I’ve had enough. I’m going to move somewhere where I feel I can have more control and more safety as well.”

Mike Moffatt: I can see that. I’m someone who quite likes transit. But I know there have been times when I’ve been hesitant to take my daughter with me on transit because of some of the stuff I’ve seen, and in some cases, when she was younger, she’s seen. I think it’s one of the reasons why we moved to a walkable neighbourhood, so we actually didn’t have to use transit as much.

And there is a fair bit of research out of the U.S. on some of these topics that shows there is a linkage between migration decisions and crime. So there is evidence to show that the people do act in the way that you describe, but there’s some complexity here.

So a few notes: first, that if you’re a homeowner who’s the direct victim of a violent crime, you are far more likely to sell your home and move somewhere else than the general population, though it’s not necessarily that you’re moving out of the metro. You might just be changing neighbourhoods or moving out of, say, the City of Toronto to a smaller community still within the GTA. But that does happen. So there is a direct linkage between experience and migration patterns.

Now, secondly, if we look for non-victims, or at least ones that haven’t been directly affected by violent crime, they still may have witnessed it, but they weren’t directly victimized- we do find that it is the perception of crime that matters more for moving decisions than the actual crime numbers. But sometimes those are aligned, and sometimes they’re not. And you mentioned kids, and I mentioned experiences with my daughter.

Sabrina Maddeaux: Of course. And that makes sense to me as well, because ultimately people are tied to wanting to be near their social networks. They have jobs. And with the return-to-office, there’s only so far they can move without having to switch jobs. So they’re going to try to find the safest, most affordable area they can within that metro. But it’s becoming more and more difficult to do so. So I could see people starting to consider even bigger moves.

Mike Moffatt: I think you’re right. If we bring this to Canada, we don’t have as much direct research. So we’re looking at correlations and things like that. But I suspect there is a crime migration linkage. But it is hard to support with data.

Now, there is a related topic that is a little bit cleaner when it comes to migration, and that’s mental health. We actually see families who are disproportionately moving to smaller communities. When researchers conduct surveys of these smaller communities and so on, they’re finding that in those communities, anxiety and depression levels are lower and reported mental health is higher. So this is mostly correlation, not causation, about this causing the move. But I do find it interesting that the data suggests that people are moving from communities that have higher levels of anxiety and depression to communities that have lower levels of anxiety and depression.

Sabrina Maddeaux: That totally makes sense. I don’t think people are actively saying, “I’m looking for a community where people are less anxious or less depressed,” or even would know how to find out that information. But what I could see that correlates with a smaller community where there are tighter social networks, more support, more social trust, less unpredictability and precarity in terms of having to get up and move, and will you be in the same home next year? Affordability may not be as much of a concern. So all those things add up to lessen the mental health strain. So that’s where I would see that being correlated more than people choosing to actually move somewhere because of the better mental health of the community. But I think that all the things that contribute to that better mental health are factors that draw them there.

Mike Moffatt: I would agree with all that. I think I might be the only person in the universe who might download an Excel sheet and go, “I want to move to a community with low levels of depression.” But I do think there is something to, at a subconscious level, where you visit one of these communities and go, “Oh, this is very nice. And everybody kind of seems happy. Maybe I’ll move here.”

And there’s this fascinating study from Statistics Canada from a couple of years ago, which we’ll also link to in the show notes. This study notes that the people who live in smaller communities report higher levels of life satisfaction and a sense of belonging to a community. So exactly what you said: it is that feeling of belonging.

Here’s where it gets really interesting, though. It’s not just the size of the community, but it’s actually the size of the metro. So if you are in the GTA and you move to a commuter suburb in the GTA, your reported levels of mental health and life satisfaction are the same as if you live in the city of Toronto.

So it kind of bleeds together. That, really, if you want those higher levels of life satisfaction, you have to move to a smaller community that’s kind of outside of a metro that is more self-contained.

Which makes sense from that connection thing because if you live in a smaller community where people actually work in the community, they’re probably a little bit more connected with each other rather than driving to Toronto to work. Love to get your take on that.

Sabrina Maddeaux: That makes sense to me. I mean, all the issues that used to be more concentrated in urban cores or downtown have spread out. So affordability is a big one, but also crime, people having to move outside of their communities, everything from congestion and commute times. So you do have to go further and further to escape those factors if you want to live in a place where those stressors aren’t impacting you or your neighbours as much, and you have stability.

I think stability and control are really big for people, especially when we’re in a world that is so uncertain. And the headlines change every 30 minutes, and it’s very stressful, which makes those factors even more important psychologically, I would think.

Mike Moffatt: I would completely agree with that. I think people are looking for that sense of control, that sense of community. I think you see, though, stories around carjackings in the GTA and many of those have been in smaller communities in the GTA. So I do think it’s important to look at that at the metro level and say, “If I really want the small town life, I’m going to have to move out to Goderich, or somewhere that’s not within a commuting distance of a place with an NHL team.”

Sabrina Maddeaux: There’s a lot at play. But at the end of the day, so much of it does come down to housing and affordability, doesn’t it?

Mike Moffatt: It really does.

So I really do think being a housing guy is important here, that it’s not just my imagination. And, particularly not just house prices and rents at a high level, but specifically prices and, to a lesser extent, rents of family-sized homes.

And I don’t think it’s a coincidence that this really started to pick up at a time when we had the introduction of Green Belts and we started having tight urban growth boundaries. Correlation is not causation, but I think the timing here is suggestive of part of what’s going on. We’ve made it so difficult to create family-friendly homes in our metros that people are moving to these smaller communities.

I often hear urbanists cite Kitchener-Waterloo as a success case for preventing sprawl because they do a lot on infill and they do a lot of good things. They have tight urban growth boundaries and so on. But interestingly, the metro area actually saw net outmigration to the rest of Canada. And that’s actually really unusual for a non-Toronto metro like Ottawa, Oshawa, Saint Catharines, Niagara, Hamilton, Barrie, London, Woodstock. They’re all gaining families, but KW is losing them.

Sabrina Maddeaux: Unfortunately, I think it might take longer than we’d like and longer than logic would dictate. We are seeing that conversation happening more with, for example, the Greenbelt. But there’s still so much backlash, especially from older voters who turn out in bigger numbers, who show up at meetings and contact politicians who are comfortably housed and don’t understand the dynamics here.

Mike Moffatt: And what I’m afraid of, because I also would put environmentalists in this pocket of which I’m one. I’m the guy who gave the Carney government an “F” on environmental policy. But overall, I think that these things have become more about symbols than policies, right? That we don’t actually see whether or not these policies have been effective at all.

But what it means to be a good environmentalist is that you support tight urban growth boundaries, and not say, “Does the data actually show that this is helpful? Or is it doing more harm than good?” And I’m afraid we’ve gotten to that point in policy where it’s all about virtue signalling and going, “These are the things you must support to stay in the environmental club. And if you don’t, then obviously you hate Mother Nature or you hate the planet.” And I just wish we could get to a point where we had more evidence-based policy.

Mike Moffatt: Absolutely. I could not agree more.

Sabrina Maddeaux: 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 Goderich or other communities on Lake Huron that Letterkenny might be based on, please send us an email to missingmiddlepodcast@gmail.com.

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

Additional Reading/Listening that Helped Inform the Episode:

Housing is a large part of the story. The OECD has examined this:

OECD Economic Surveys: Canada 2025

As has Statistics Canada:

Housing challenges related to affordability, adequacy, condition and discrimination, August 2 to September 15, 2024

Remote Work and Employment Dynamics under COVID-19: Evidence from Canada

Remote workers, who tend to be college-educated, also want to move to areas with a robust mix of local amenities.

Settling into a New Normal? Working from Home across Canada

Social ties and quality of life, including lower rates of depression:

Beyond urban and rural: Rethinking the social geography of Canada

Rates of depression and anxiety in urban and rural Canada

Why some people are choosing country life over the city

Though evidence is nuanced:

Rural life hardly healthier

Crime and disorder:

Urban Violent Crime Report, Volume 2: Comparing crime across Canadian cities

Characteristics of police-reported crime in rural areas in the Canadian provinces, 2023

McDonald-Laurier Report

Funded by the Neptis Foundation

Brought to you by the Missing Middle Initiative

Cara Stern sits down with Jasmine Steffler of Walkable Parenthood and Oh The Urbanity! to explore why Canada’s parental leave system is among the most generous in the world, yet still leaves many new parents struggling.

From confusing leave rules and income replacement gaps to the challenges of finding childcare, building community, and balancing finances during the first year of parenthood, they take a candid look at what Canada gets right, where it falls short, and why supporting families requires more than just time off.

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: Since Canada expanded employment insurance parental leave from ten weeks to 35 weeks in 2000, and Quebec launched its own provincial parental insurance plan in 2006, the share of new mothers taking leave has consistently been around three quarters. Say what you will about Canada, but when it comes to pregnancy and parental leave, we do a lot right. Our policies are popular, they’re widely used, and they’re among the most generous in the world. But of course, that doesn’t mean they’re perfect.

Today we’re joined by Jasmine Steffler, who you might recognize from the YouTube channel Oh The Urbanity! and who now writes a Substack called Walkable Parenthood. She’s here to talk about her experience navigating parental leave, what surprised her along the way, and where she thinks Canada could be improved.

First of all, thanks so much for joining us. I’m so happy to have you, Jasmine.

Jasmine Steffler: Thanks for having me.

Cara Stern: What did you know about the parental leave policies before you got pregnant?

Jasmine Steffler: I generally knew you get about a year of maternity leave, but I had a lot of confusion around exactly what that looked like in terms of how many payments you got, how long you get payments, and how that fits with how much leave you can take from work.

That was one of my biggest confusions—how that worked beyond just generally figuring out personally when to take leave, when you’re financially stable enough, and when you feel like it’s a good time at work.

Cara Stern: Yeah, it’s a thing that wasn’t intuitive to me either. The fact that it’s like two separate systems where you’ve got your protected leave, which is one part of the system, and then you’ve got your employment insurance—or in Quebec, it’s their own program—but you’ve got basically employment insurance for parental leave over that period of time. Those are two separate things.

It’s not that simple of a system, which is a little frustrating, deciding when to take leave. What did you decide to do?

Jasmine Steffler: I ended up taking 14 months, which seemed like a good compromise between a little bit more than a year, but not the full amount of time because I just didn’t quite feel like I could justify being away from work that long. I think the financial strain would have been a bit too much for that amount of time.

Cara Stern: In Quebec, though, you guys have a better system in the sense of the income replacement part of it, right? Because I know in Ontario and in most provinces, you end up basically getting the same as what you’d get through the EI system. It’s capped at 55% of your salary up to somewhere around $60,000—it changes every year.

For a lot of people, especially if you’re a middle-class family, you’re probably taking a significant pay cut. No matter where you are [outside of Quebec], it’s going to be 55% at best; you’re going to lose 45% of your income. For a lot of people, it’s a lot more than that. For you, it was different in Quebec, right? They have a higher income replacement rate. Is that how it works?

Jasmine Steffler: Yeah, that’s right. That was a pleasant surprise when we were going through all this research.

Comparing that to 55% in the rest of Canada is actually pretty significant when you think about what that would look like in terms of money in your bank. It gets better than that as your income increases because Quebec doesn’t have the same cap. In Quebec, your income can be up to $103,000 for the income ceiling, so you’ll get 65% of that if you make that much, which most of us don’t, but it’s a pretty big difference.

Cara Stern: That’s huge. I wonder how much that impacts how comfortable people are. I know that Quebec has, at least in eastern Canada, the highest fertility rate. I wonder how much of a role this plays. How much of this did you consider?

Jasmine Steffler: I think it was a pretty big consideration, just doing the calculations and figuring out the difference. It wasn’t only that, but it definitely made a big difference for imagining what our lifestyle would be like the year I’m off. It just seemed a bit more attainable than it would elsewhere. It wasn’t just that, though. In combination with that, knowing that Quebec has a pretty strong subsidized daycare system and looking ahead to things like that helped too.

Cara Stern: Oh my gosh, your daycare system seems so much more robust than in Ontario. I know that here you end up calling all the daycares and having to basically follow up. Sometimes the squeaky wheel gets the grease, and it’s very frustrating, especially if you’re someone who isn’t comfortable calling and bugging people and saying, “Hey, I really need a spot, can you help me out?” Because I understand in Quebec it’s a centralized system, right?

Jasmine Steffler: Yes, exactly. It’s a pretty easy system and there are just so many more available spots. There’s still competition for your ideal spot, but it’s just not such a Hunger Games thing because there is more availability. It’s not rewarding the richest and most organized people as much as I think it is in other provinces.

Cara Stern: Yeah, and that’s kind of nice. It’s a much fairer system because a lot of people don’t know how to navigate the system, especially if it’s your first kid. With the first kid, you don’t have any sibling priority that a lot of people get when it’s their second or third kid. When it comes to the amount that you get, for me with the first kid, I was thinking about how we’ll just figure it out. I knew that I had, at the time, a top-up through work for the first four months. I think that is something that some people have—big companies often offer that. But a lot of Canadian employees work for small businesses and don’t have any top-up, so it’s a huge hit.

Once you experience one parental leave, you know exactly how dire the situation can be for your budget. There’s no way to avoid thinking about this when deciding whether to have another kid because it’s going to affect your income. I heard from a financial planner one time that if you are not going in the red during mat leave, that is a huge success. That’s all you’re aiming for, and a lot of people can’t even do that. It makes sense because the cost of living is really high and the amount you get is not that high.

Jasmine Steffler: It really disincentivizes middle- and lower-income people from having kids; it’s a huge barrier. Obviously, if you’re a bit better off, you have more capacity to have one partner be off for a year or two years, and it doesn’t hurt you that much. Maybe you’re reducing your investments or you’re not going on as many trips as you would normally. But for lower-and middle-income people, it actually can be a very big hit to your lifestyle. We are in the advantageous short-term position of not owning a home, not having a mortgage, and not having a car. If you do have those big, regular monthly expenses, it seems almost impossible if you’re a middle-income person.

Cara Stern: Yeah, I was thinking to ask you if you were one of the people who decided once you have a kid, you have to get a car, because I was like, that would be very off-brand for you guys. But I wondered about that because a lot of people feel like it is a necessity when you have a kid. I know that you have a Substack that talks about all the ways you get around the city without a car and what your experience is like. Can you tell a bit about what your experience has been with that?

Jasmine Steffler: Yeah, so we don’t have a strong opposition to ever getting a car, but we did want to see how long we can go and how it goes having a baby or a kid now without a car. There are some areas that can definitely be improved in Montreal. Montreal has pretty good transit, but they are really lacking on accessibility on the Metro. I don’t know the exact figure, but it seems like 10% or less of stations are accessible. I think Toronto is a lot higher, so that has been a challenge. It definitely makes us take the bus more than the Metro, which has been fine, it just limits your options in a way that full accessibility wouldn’t. If we want to go somewhere, we might walk to the closest Metro station, and that might be a 20 or 30-minute walk just to get the elevator, so it definitely adds some complications. Other than that, we do live in a walkable area, so we can do our day-to-day needs on foot, and it’s been mostly fine.

Cara Stern: How old was your baby when you first took him on a bike?

Jasmine Steffler: Technically the first time he was around eight months, but he was in a car seat in a cargo bike. When we really got him on it more often was when he was about 14 or 15 months. It was finally not winter in Montreal and he had good head and neck control. We have a bike seat for him now, which has been great for being able to do similar rides that we did before.

Cara Stern: Will you be taking him in the winter?

Jasmine Steffler: Good question. I think that’ll have to be a discussion for later, but we’re definitely a lot more cautious when we take him out. Maybe we’ll get there.

Cara Stern: I wanted to go back to the parental leave side of it because you spent a lot of time on parental leave. How did you find navigating and understanding not just the systems on how to collect the payments for it, but how did you integrate into the community of people who are also on parental leave? How did you find people who have kids the same age? What did you do?

Jasmine Steffler: I actually found it kind of challenging. In the first three to five months of having a baby, you’re so preoccupied with the baby, you’re spending so much time taking care of them, worrying about them, and googling things that your main focus isn’t really building community, even though it’s maybe the thing you most need.

Cara Stern: Yeah, I always thought about when I was on parental leave that there was this ratio between how much you liked them and how close they lived, and that just has to be a happy ratio. As long as they live nearby, if they’re decent enough people, you spend time with them, even though sometimes the only thing you have in common is being a mom. But sometimes that’s all you need when you’re on parental leave and trying to find your people. It can be tough, right?

Jasmine Steffler: Yes, exactly. Getting that human interaction regularly can be pretty important because it can be pretty isolating if you don’t have that, especially if you don’t have family or a pre-built network right around you.

Cara Stern: Oh yeah, because you live far from your family, so I guess you had to kind of build that community where you are. It’s a tough thing.

I always tell everyone who’s going on parental leave, look for your local EarlyON if you’re in Ontario because they’re all over the place and they’re all individually run, so they’re a little bit different. If you don’t like the one you go to, try another one. When it comes to going on parental leave, what’s something you wish you understood before you went?

Jasmine Steffler: I think beyond understanding the basics of how much money you’re entitled to, how much leave you can take, and figuring out what works best for you, like not just assuming that you have to take only 12 months or only 18 months, it’s pretty idiosyncratic. You have to be honest with yourself about how long you really want to spend with a baby. It’s rewarding, but it can be really hard, and it’s a very different type of job.

Cara Stern: Yeah, and it’s okay to not know that ahead of time. Some people think that they will enjoy it a lot more than they actually do, so I guess that’s where the flexibility comes in of being able to change it. I really appreciate that they don’t lock you into a certain amount of time when you take parental leave.

Jasmine Steffler: And then beyond that, thinking beyond one year or 18 months of leave and thinking about what infrastructure, services, and things exist around you to support you. More of us are living more individualistic lives, and that’s become more normal than it was in the past. We need community groups more than ever.

Cara Stern: Yeah. Childcare used to be such a big expense, and I know it was before this program came in. I started my first kid in daycare right as the program came in. Our deposit was $2,300 for the month, and then what we actually paid was more like $1,000 a month, and it just went down from there. Now it’s around $450, and if you can access the spaces, it’s such a benefit. It’s amazing what it does.

What ends up happening is that the year off is probably the most significant cost in the early years because of the loss of income, the loss of momentum at work, and sometimes losing connections if you take too long off. I was reading about what kinds of things have worked for helping people feel more comfortable having as many kids as they’d like to, and what I found was that extending how long they’re off doesn’t always work beyond a year. About a year seems to be the sweet point. Some countries tried doing two years and three years and then pulled it back to 18 months because they didn’t find it made a big difference. But what makes a big difference is that income replacement, because without it, it just makes it impossible to make ends meet, especially in such a high cost of living country.

Jasmine Steffler: You need to have already decided you want to have kids, and then you’re going to figure out how to make it work. But if you’re someone on the fence and you’re not sure, our programs don’t necessarily do enough to make it look super appealing.

Cara Stern: You recently took a trip with your kid. You said kid, I still think he’s a baby. He’s only three weeks older than mine, and mine is still a baby, so yours is still a baby. What was that like?

Jasmine Steffler: It was different than traveling before a kid, but it was better than we thought it would be. It takes more prep work, just like you do at home, and you have to temper your expectations a little bit. You expect to cover less of the city every day, but it is entirely doable. I don’t know how much harder it gets when we’re fully in toddler mode, but it’s entirely doable with an 18-month-old.

Cara Stern: So that’s awesome. Yeah, I guess it’ll be different to see as they change. There’s always something new that’s great and something new that’s horrible—that’s my experience, anyways. I only have a four-year-old. I don’t know if it changes as they get older, but as something changes, I’m like, “I’m so sad this phase is over,” and also, “Thank goodness that phase is over.” Everything’s bittersweet.

Jasmine Steffler: For sure.

Cara Stern: Thanks so much for joining us. I really appreciate you taking the time to come here today.

Jasmine Steffler: Yeah, thanks for having me.

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

If you have any questions about putting a baby on a bike, send them our way: missingmiddlepodcast@gmail.com.

We’ll see you next time.

Additional Reading/Listening that Helped Inform the Episode:

The effect of leave policies on increasing fertility: a systematic review

Does Parental Leave Affect Fertility and Return-to-Work? Evidence from a “True Natural Experiment”

The Daily — Fertility and baby names, 2024

Brought to you by the Missing Middle Initiative

From housing reforms and accessible education to immigration, community, environmental spaces, and a uniquely Canadian sense of humour, the conversation highlights the people, values, and progress that continue to inspire optimism.

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: Happy Canada Day, everyone!

Sabrina Maddeaux: Happy Canada Day!

Today we’re doing something a little different. We often spend a lot of time on the show talking about the country’s challenges, but since it’s Canada Day, we’re taking a moment to focus on what makes Canada great and what’s making us feel optimistic about the country.

Cara Stern: Summer is finally here, and I love summer in Canada. There’s something about having four seasons that makes the summertime extra special. I find our cities really come alive with people who know that they cannot take the warmth for granted, so we’re all going to soak it up. Every year reminds me how lucky I am to live somewhere that has all four seasons, and I just can’t imagine living anywhere else.

I think there’s a lot to be optimistic about living in Canada. If you told me a few years ago that we’d be seeing citywide up-zoning to four-plexes, six-plexes, even eight-plexes in this country, I would not have believed you, but we’ve seen it happen. And we’re now seeing meaningful change on the development charge front, on the taxes applied to new homes, and these are temporary measures. But the fact that they’re happening at all shows the politicians are starting to understand how dire the housing crisis is to an extent that was just unthinkable a few years ago.

There’s a long way to go before the housing crisis is resolved, and a lot more changes that need to come to make these projects viable, not just legal on paper, but there’s progress, and it’s slow, but it’s happening, and that gives me optimism for the future.

Sean Foreman: Hello, everybody. I am Sean Foreman. I am the technical director here at Missing Middle. Happy Canada Day! What do I love about Canada? I love a lot about Canada, but something I’ve been thinking a lot about is the Canadian sense of humour.

We have created some of the funniest people on the planet, and we are proud of it. Some of our prime ministers have also been funny, some on purpose and others not so much. But I think this quality goes beyond just laughs. I think humour is connected to humility and that’s a good thing. We are a humble country.

We are certainly not the most powerful country in the world. There is a guy just south of the border who keeps reminding us of that, and we are not perfect. But that is okay, because if you are humble, you’re capable of self-reflection and you can change.

I think Canada has the potential to change for the better. And while we all love Canada, there are some things that need changing. So have a great Canada Day. Maybe you’re listening to this at a barbecue. I don’t think it’s weird to listen to a podcast at a barbecue at all. So don’t listen to your friends and have a great Canada Day.

Kelly Hoban: I’m Kelly, Missing Middle’s summer co-op student. I’m currently in university, and being originally from the United States with dual citizenship, one of the things I appreciate most about Canada is the accessibility of education here. There’s a big difference in university costs and student debt between the US and Canada, and moving here has made me see education as more attainable rather than overwhelming or out of reach.

Beyond that, I think the universities here feel very community-oriented. I’ve built a lot of close friendships since I moved here for school, and since then, Canada has stopped feeling like somewhere I visited when I was younger and started feeling more like home.

This is what makes me optimistic about Canada’s future. When people feel supported and connected to their communities, it creates a more welcoming country. While there’s always room to improve, the support and sense of community I’ve experienced living here give me hope for the future.

Meredith Martin: My name is Meredith Martin, and I’m the producer of the podcasts. For what I love about Canada, I’m going to go hyperlocal to Tommy Thompson Park.

Like millions of people, I took up birdwatching during the pandemic and discovered that I live very close to a migration superhighway for birds, so every spring and every fall, I get to go down and witness thousands of birds migrating into the northern and southern hemispheres. I love it. I also found out that Tommy Thompson was built out of leftover debris from the construction of the Toronto subway system, which I think is pretty wild. It was allowed to rewild over many years, and now it is a phenomenal place to spend time alone in the wilderness, and yet within the boundaries of a city that is home to over 3 million people. If you haven’t been, you should go.

In terms of what I’m feeling positive about, I am feeling positive about immigration, and I’ll explain why. I know this is a topic that we talk about a lot on this show, and some people think of us as being anti-immigrant, and that is the furthest thing from the truth. Canada is a nation of immigrants, and I feel both confident and hopeful that we can figure out a way to align our housing goals with thoughtful immigration policies, because that is how we built this country, and we do it better than anywhere else on earth.

This summer, my nephew is getting married to an Iranian woman, and three years ago, another nephew of mine got married to a woman from mainland China. So this is very personal for me. I’m now the great-aunt of a beautiful baby girl. And what could be more optimistic than babies? Let’s have more of them.

Sabrina Maddeaux: What I love most about Canada isn’t the postcard stuff. It’s something that I think gets dismissed too easily in the current conversation, which is this country’s instinct to look out for people. To try to do right by its citizens and by the world. This isn’t a marketing play. You can see it in the way we’ve shown up historically, whether that’s on the world stage as peacekeepers and mediators, when other countries weren’t willing to play that role, or in the social programs we built, because we really believe no one should fall through the floor.

There’s something in our Canadian culture, an inclination toward kindness, a baseline assumption that your neighbour’s well-being is at least partly your business. It does run pretty deep, and I don’t think we should just throw it out because it’s been taken advantage of lately or it hasn’t always been paired with the rigour it needed to actually work.

That’s really the problem right there. Good intentions without clear thinking, without urgency, without a willingness to take risks or make hard calls - that’s not real virtue. It’s just comfort. And there are two ways that comfort becomes dangerous. One is external. In an era where those good intentions can be so easily manipulated by private interests, bad actors, or the incentive structures of social media, kindness without backbone becomes a liability.

But the other way is internal, and that’s maybe even more corrosive because it turns into complacency. The belief that because we mean well, because we have good values, we’re somehow protected from the worst outcomes, that we don’t have to do the hard work because we’re already on the right side. Our Canadian values should be assets, but we’ve too often allowed them to be blind spots.

What makes me hopeful is that I think more and more Canadians are starting to understand this: holding on to our values doesn’t mean being naive about how they get used against us, or assuming they’ll save us on their own.

The work we need to do is to figure out how to actually keep what’s inherently good about Canada and its people intact while building the common sense and the spine to act smarter and faster. That’s not a small thing to figure out, but I know we’re more than capable of it, and I think the conversation is more serious than it’s ever been in my lifetime, including on The Missing Middle. So today I’m holding on to that and proud of it. Happy Canada Day!

Mike Moffatt: At the Missing Middle, we’re often critical of government policies and the people who make them. That’s not because we’re anti-Canada. It’s because we love our country. After all, dissent is the highest form of patriotism. We’ve taken positions that have made those in power uncomfortable, sometimes even angry, and we plan to keep doing it. Yet, despite being a regular thorn in their side, no one in power has ever tried to silence us. The only censorship we face is self-imposed, guided by what we believe is true, appropriate and helpful.

But what makes Canada truly remarkable isn’t just the relative lack of government censorship; it’s that those same politicians, bureaucrats, and planners that we criticize still call us. They subscribe to our Substack, they invite us to meetings, and they seek out our perspective.

They want to hear from us precisely because they don’t always agree. They see the fundamental value in well-researched, independent opinions. That open-mindedness is what makes Canada great. And I hope we never lose it.

Sabrina Maddeaux: Thank you so much for watching and listening.

Mike Moffatt: If you have any thoughts or questions about what used to be called Dominion Day, please send us an email to missingmiddlepodcast@gmail.com.

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

Additional Reading/Listening that Helped Inform the Episode:

A History of Tommy Thompson Park

Brought to you by the Missing Middle Initiative

Funded by the Neptis Foundation

In this episode of the DemograFix, Mike Moffatt and Cara Stern unpack a major problem hidden inside Canada’s housing statistics: the country is building fewer family-sized homes than it did 20 years ago.

Why are three-bedroom homes becoming so difficult to find? Why are developers building more small condos instead of homes for families? And how do zoning rules, development charges, land shortages, and housing policies shape what gets built?

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: Housing starts across Canada over the last decade have been relatively high compared to historical averages, but it’s still much harder to find a family-sized home to raise children in than it was a generation ago.

A lot of that shortage does have to do with unusually rapid population growth, which we’ve discussed on a number of episodes, but that’s actually only part of the story. Our housing start data masks a dramatic shift in the type of homes that get built in this country, and it’s a big shift away from building homes that work for families with kids.

Mike Moffatt: So, Cara, you’re a mom of two kids, so let’s say your family needed to move for whatever reason. You’re out there, you’re looking for a new home. What kind of features do you picture in your mind that would suit you and your family?

Cara Stern: It’s somewhere that definitely has enough room for the kids; they need space indoors to be able to play. They need some sort of outdoor area, I don’t care if it’s a backyard, it could be a local park, it just has to be somewhere they can go and be in green space. And they definitely need to have three bedrooms because I’m going a little bit bananas with my kids sharing a room and waking each other up all the time.

Mike Moffatt: We could ask a lot of parents that question, and they’re all going to have different lists. They might want to be within walkable distance to a school, this, that, or the other. I think, though, you’re going to find with most parents of kids that the three-bedroom thing is a must-have. If you have to have three or more bedrooms, then you are almost certainly going to be looking at either a single-detached, semi-detached, or maybe a townhouse unit. You’re going to be kind of limited to those housing options.

But if you start to look at apartment units, and that could be rentals or condos, only about 16% of low-rise apartment buildings or apartment units (those with five or fewer stories) are going to be three plus bedrooms. And if you start looking at high-rises, only 7% of those have three bedrooms or more.

If you’re looking at apartments, you’re going to have a really tough time finding a place that meets your needs, particularly if those needs are more bedrooms. That is doubly true if you’re looking at newer buildings and big cities, because new builds, particularly in high-rises, have been shrinking all the time. Really, if you want three bedrooms, you’re kind of limited to single-detached, semi-detached, and townhomes.

Cara Stern: I’m actually surprised that 7% of high-rise units have three bedrooms or more. I would have guessed it was even less because it seems so rare. You see one-bedroom, two-bedroom, and studio units, but you almost never see three bedrooms, especially in the rental market.

Mike Moffatt: Absolutely. I think many of those are older, and many of those are catering to folks who aren’t in the middle class. Think of the 62nd-story penthouse units and that kind of thing. It’s not the type of home you would think of when you’re running around with two small children, like, “I’ve got a $3 million penthouse.” I like to think we pay well at Missing Middle, but not $3 million penthouse well.

Cara Stern: Yeah. And when you talk about the apartment sizes shrinking over time, that’s a huge part of it, too. I remember looking at condos when I was looking to buy a place, wondering whether we should move into a house or a condo. I was totally fine with the idea of a condo because I actually like that lifestyle and I like having a lot of people in the building where you can get to know them. You don’t have to go outside to see them, which was kind of nice when I had a very young child on a winter day when we were in a high-rise.

But when we started looking at them, the prices of even the two-bedrooms that were 800 square feet, or even 600 square feet, were considered pretty big units because a lot of them were much smaller than that. Very quickly we realized that if you want 800 square feet, you could spend, at the time, probably around $1.2 million on a two-bedroom condo. Then we noticed that houses were less than that for about that same size, and you often get a basement or some sort of extra space. It didn’t make any sense to get one of those condos if you want space for kids.

What’s important here is that those housing types—the single-detached, semi-detached, and row homes—are actually getting increasingly harder to find. We’re building fewer of them. If we go all the way back to the year 2000—which I can’t believe was about 26 years ago because I remember it well—we were building at the beginning of the century somewhere between about 100,000 and 140,000 of these ground-oriented homes each year. That was between 2000 and the start of the financial crisis. But we were only building about 30,000 to 70,000 apartment units. What that really means is, for each apartment unit, we were building two or three of these ground-oriented homes which suit families.

The low supply of those apartments was a real problem—we needed to get those numbers up. Thanks to two decades’ worth of government reforms, apartment starts are on the way up, and I mean way, way up. Last year, we had about 165,000 housing unit starts in Canada. That’s an all-time record, and that’s absolutely worth celebrating.

Cara Stern: It’s really frustrating the way that politicians talk about this because they talk about “housing units,” not “homes.” When you think about it, what makes a suitable home for one family doesn’t necessarily work for another. We’ve said it before: they look at it as if a unit is a unit is a unit, and that’s not how people look at it. It’s just how politicians and people trying to count housing starts look at it.

If you build a 40-story tower with 400 shoebox condos, yes, you’ve added 400 units and are getting closer to hitting your target. The mayor might get to hold a press conference and talk about all the progress they’ve made towards their targets, but none of those units accommodate a growing family. Those 400 units are basically useless for a couple trying to transition out of the roommate phase of their lives and start a family. Those 400 shoeboxes have a lot fewer bedrooms than houses used to, or the kind of ground-oriented housing that you’ve been talking about, so they fit a lot fewer people than 300 townhomes.

Mike Moffatt: Exactly. Our housing start data is really misleading because of this “a unit is a unit is a unit” mindset. If we look at the number of bedrooms, it’s actually fallen quite a bit. Don’t get me wrong, small apartment units have their uses; there is a market for that. It’s not about saying, “Okay, stop doing that thing,” but we have to be looking at the entire universe of housing that we’re building, and that universe contains fewer and fewer family-sized homes. That is a real problem.

As long as governments, whether it be the federal government, provincial government, or municipal governments, simply think in terms of units and set targets in terms of units, we’re not going to be building the types of homes that work for all families. We’re going to bias the system toward building a lot of shoebox condos and not much of anything else.

Cara Stern: And we do need those shoebox condos. I sometimes get my back up a little bit when people say no one wants to live in them or they’re unlivable. There are a lot of people who would be very happy with them. Think about people who are living with a roommate and would love to live on their own; that gives them an option of a less expensive way to live on their own. I think about the homelessness crisis and how many people would be happy with those teeny-tiny micro-units—there is a market for that at the right price, maybe in cases where the government would make social housing out of them. We do need them. The fact that they’re still so expensive tells me that there still isn’t enough of them.

Mike Moffatt: You’re absolutely right that it’s not a lack of demand that’s the issue. It’s fair to ask that question because tastes for anything change over time, and when things become less popular, all else being equal, companies are going to start producing less of it. But something else happens when things become less popular, all else being equal, and that’s that the price goes down, particularly for resale items.

Let’s say people decide that they don’t want Beanie Babies, early 1990s baseball cards, or Nickelback CDs; the market gets flooded with them, nobody buys them, and the price collapses to nothing. That didn’t happen with three-bedroom homes. Prices didn’t go down; they went up. And not only did they go up, they grew much faster than incomes. Those homes became incredibly valuable, not something that you could get for a dollar at a garage sale.

Cara Stern: And they haven’t dropped as much as some of these other places have. I know lots of people right now looking to buy a home, and a lot of them are looking for that family-sized home. They haven’t dropped the same way you hear in the news, like, “Oh, real estate, there’s been a crash.” Yes, they’ve gone down since 2022, but they are so far from affordable right now.

Mike Moffatt: Absolutely. In many provinces, they’re at all-time highs right now. Yes, there has been some decline in the GTA, Southern Ontario, and the Lower Mainland in B.C., but in other places, prices have gone up. There’s a lot of demand out there. I occasionally hear things from older people suggesting that it is a demand problem. They’ll say things like, “Well, those homes aren’t getting built anymore because millennials decided that they don’t want to have to mow the lawn.” If that was truly the issue, again, we would be seeing a massive collapse in the price of those ground-oriented homes. That just hasn’t happened.

Cara Stern: Yeah, people definitely still want to live in these kinds of homes, and it’s really frustrating to see that they just aren’t building them at the rate that we need. You’d think that builders would respond to those higher resale prices by building more because when prices go up, they can make more money off of it. Instead of building more, they actually did the opposite—they’re not building them at anywhere near the rates they used to. What’s going on there?

Mike Moffatt: There’s a few different ways we can answer that question. I think the most straightforward is comparing two types of communities. In the first type, over the last 20 years—I would think of places like Alberta, Southwestern Ontario (shout out to Tillsonburg), Atlantic Canada, and so on—we continued to build those homes and, in some cases, actually increased the rate of building them over the last 20 years.

In other parts of the country, obviously the GTA, and I would actually say in particular the 905 belt around Toronto, you saw a massive decline in the building of family-friendly homes.

So you go, “Okay, well, what’s the difference between those two buckets of communities?” There’s a bunch of different factors. In places in the 905, approval times can be much slower than in, say, Southwestern Ontario, and zoning can be much more restrictive. There’s a number of reasons, and I’m sure I’m going to miss some. If I missed your favorite reason, please leave us a comment in the comment section; we’d love to hear from you.

But there are two in my mind that really jump out. The first one is land costs and scarcity.

Cara Stern: For a while, growing up in the suburbs, I would see the expansion of subdivisions farther and farther away from the city, and I kept thinking to myself that at some point it’s going to be too far to commute. There is that kind of limit, even if you don’t put the Greenbelt in there; there is a reasonable amount of commuting time that people are going to accept. I wonder how much that plays a role in this as well.

Mike Moffatt: I’d actually say it’s the opposite because what happened was a lot of those families moved to Southwestern Ontario and still continue moving into the GTA. We made a number of policy decisions to say, “Well, we don’t want people doing 30 or 40 mile commutes to their jobs on Bay Street.” We put in a bunch of policies, and now they’re doing 80 or 90 mile commutes to their jobs. Instead of living in the 905, they’re living in Oxford County and still driving in. In fact, we tended to make sprawl worse because of these land-use issues, but I think that’s a topic for another episode.

Cara Stern: And at the same time, while restricting those urban growth boundaries, we of course didn’t allow multiplexes in cities, so you couldn’t actually build up. You’re limiting it in all directions.

Ironically, it economically favoured McMansions, because the development charges on a small 1,200-square-foot detached home and a 12,000-square-foot McMansion are exactly the same. This would be like if the government put a $5 tax on pizza, but that tax is the same whether you bought a small pizza, an extra-large pizza, or even just a single slice of pizza—you buy any amount of pizza, you pay a flat $5 tax. Under that scenario, who on earth is going to pay by the slice? Or in this case, who on earth is going to buy and build a small single-family home when you get taxed through the nose for it?

Cara Stern: No one would want to get the smallest amount of pizza if they can get the entire pizza for the same price, although I guess there’s a land cost, so maybe the base price of the pizza before the taxes would be different. At the same time, yeah, that makes a lot of sense. That’s just a logical thing that developers would do. But then why didn’t they shift to building family-sized apartment units when they realized that there was a shortage of family-sized homes and people were going to want them?

Mike Moffatt: The reason is project cost. The cost of construction for a high-rise is much, much higher per square foot than for ground-oriented buildings because of their complexity.

The other day I was looking at a Bloomberg Associates report for the City of Ottawa. It showed for the Ottawa region pure construction costs. This doesn’t count land, taxes, marketing, finance costs, or anything else; just drywall, electricians’ time, and so on. If you look at those construction costs, if you’re building single-detached, it’s about 205 bucks a square foot. It’s about the same for townhomes. But if you’re building high-rises, it’s about 320 bucks a square foot. It’s roughly 50% higher.

It’s so much more expensive per square foot in order to build high-rise units. But the costs are even worse than that when I say it’s about 50% higher because, for a single-detached home, if you’re a developer and you’re selling it, you’re selling 100% of the space. It’s really efficient. But for a high-rise, that figure drops to about 80% because you are selling the units themselves—you’re not selling the hallways, the elevator, or the lobby. That doesn’t go into the purchase price. There’s this efficiency loss just because you need all of these other components.

The project’s economics are brutal, particularly in the GTA. No middle-class family with kids is going to pay over $1 million to live on the 56th floor of a high-rise to get enough space; it just doesn’t make any sense.

Cara Stern: And if they’re trying to prepare their life for having a kid, they might not even have that kid because they would say they don’t have the room for it. It’s really tough for people trying to have a family if they’re looking at the options, like, “Where am I going to raise them? What kind of home can I have for them?”

If they find that they can’t afford something that’s big enough for their family that they can actually feel good about raising their kids in, then they’re just going to not have kids, and people are making that choice all the time.

We know our fertility rate is at the lowest it’s ever been—it’s at 1.25, and that is considered ultra-low. We’re seeing this affect what people are able to do with their families, how many kids they are able to have, and where they’re able to start families. We’re seeing a lot of people leaving cities because there are just no options for them within the cities.

Mike Moffatt: Absolutely. That’s the big issue—that we are creating cities without children because the individuals or the couples in that city are going, “Okay, well, I’m just not going to have kids because I just can’t make the numbers work.” Not that most millennials think like economists and accountants, but enough of them do.

Cara Stern: No, but they’re looking at their budget and going, “The numbers just don’t work. There’s just no way to make this happen.”

Mike Moffatt: Exactly. They can figure it out without the use of an Excel spreadsheet, doing calculus, or anything. If they really want to have kids, they’re moving out. They’re moving to the 519, they’re moving to smaller communities outside of the GTA, and in some cases, they’re leaving Ontario or leaving Canada. You get this big out-migration, and you actually weirdly get sprawl on steroids because you get people who are going far away from the city but still commuting back to work every day. It doesn’t make for a strong, inclusive economy when you basically price out middle-class families from having kids and also living next to, near, or in a city.

Cara Stern: When you say inclusivity, it sounds like saying it’s a goodwill thing to be able to do this, but it’s actually just looking at the economics of it. If you have all these parents who are basically the ages of people who are in their prime working years moving out of the city, that’s going to have an impact on what kind of jobs people can work in the city.

We need people to work in the city. There are lots of jobs; they can’t all be super high-paying jobs that are only for the most senior people and then the lowest entry-level ones. You need to have some of those people with experience in all different kinds of careers, and there are a lot of jobs where it’s impossible to find people in the cities.

Of course, if they’re not highly paid and they can’t afford to live in the city, then they’re not going to be there to work those jobs, so it’s actually a big economic problem for our urban areas.

Mike Moffatt: Yeah, absolutely. I often hear from particularly older folks saying, “Well, why don’t young people just move somewhere cheaper?”

Cara Stern: “Just move to Alberta if you’re in Toronto. It’s so much cheaper.”

Mike Moffatt: Exactly. But think about the logic there. We’re basically saying we’re going to have all the seniors live in Toronto and all the nurses and physical therapists living in North Bay. How is that going to work?

Cara Stern: They’ll just commute from North Bay to Toronto. A very good commute. It’s lovely, a beautiful thing driving through Ontario.

Mike Moffatt: Exactly. So I just go, “Okay, how is this going to work where you have a community of all old people and no middle-class people there to actually do the work?” It doesn’t work. You have to have cities that work for young middle-class families; there’s no way around that.

Cara Stern: So how do you actually go about fixing this?

Mike Moffatt: There are a few things that we can do, so I’ll give a list here. Again, it won’t be exhaustive. If I missed your favourite policy prescription, please let us know in the comments.

First, we have to fix development charges. They’re not only too high, but as I mentioned, for ground-oriented homes, the system is designed to favour McMansions. You hear this complaint, “Okay, well, why don’t developers build smaller homes? Why do they only build McMansions?” It’s because that’s what the tax system incentivizes.

Second, we need to be realistic about how much land we need, and that’s going to mean tough decisions about urban growth boundaries.

Third, we need to build a diversity of low-rise housing types, including multiplexes and European-style apartments, so that’s going to require both zoning and building code reform.

And finally, we need to reform condo regulations to make it much easier to be able to purchase a home in a multiplex and not just rent one. We had a report a few months ago called A Roadmap for Gentle Density. It mapped out the issue and provided recommendations on how to make it possible to own, and not just rent, a multiplex unit or other form of family-friendly, gentle density housing. There are four ideas right there. I’m sure there’s more that we could discuss, but this is a solvable problem.

Cara Stern: The idea that people could buy multiplex units is a good one, because right now it seems like a lot of people who build multiplex units live in one and rent out the others potentially, or maybe they just rent them all out. The system is designed for that. But there are a lot of people who still want to own their home, and if they can afford it, they’re going to make that choice. Once again, if the family-sized units are not available in the cities, even in these gentle density builds, then they’re not going to live there—they’re going to move away.

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

Mike Moffatt: And if you have any thoughts or questions about stuff that you can find cheap at a garage sale, 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:

From Policy Gridlock to Housing Growth: A Roadmap for Gentle Density

Brought to you by the Missing Middle Initiative

In this episode of Classonomics, Mike Moffatt and Sabrina Maddeaux dive into the real costs of hosting the world’s biggest party. They break down the billion-dollar price tags, FIFA’s business model, and whether taxpayers are getting stuck with the bill while others reap the rewards. (Producer note: This episode was recorded on June 5th, 2026.)

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

Sabrina Maddeaux: The World Cup kicks off June 11th, and Toronto and Vancouver are two of the 16 host cities. There’s been a lot of hype, a lot of controversy, and a lot of very optimistic economic projections flying around.

Mike, before we get into the weeds of who really wins when the World Cup comes to town, give me the basic overview of how these big projections are usually built and why economists tend to be pretty skeptical of them.

Mike Moffatt: Well, before I get into the economics of it all, which, to be frank, are really brutal, I think we need to acknowledge that there may be all kinds of hard-to-quantify non-economic benefits around, national pride, getting kids interested in sports, things like that.

I still remember being a kid in the late 1980s and all the excitement around the Winter Olympics coming to Canada. You really can’t put a price tag on that. And I really wish politicians and advocates of bringing events like the Olympics and the World Cup to Canada would focus on that side of the discussion, instead of engaging in this kind of dubious economic math.

Sabrina Maddeaux: There are some benefits. It’s not all bad news.

I also think of when the Raptors started to really surge and have success, and basketball became huge among youth in Canada, especially as a sport that’s not expensive to get into. It’s relatively accessible. That’s amazing. And the same thing will hopefully continue to happen with soccer. We’ve seen some of that already with, for example, TFC in Toronto and more kids playing soccer.

The other benefit I’d say is that these cities are actually undergoing the maintenance, repairs and upgrades they need, not just in terms of sports facilities. Being located in Toronto, I see it firsthand: the transit systems, the sidewalks, and how the city looks is finally being cleaned up when a lot of it was left to basically rot for years.

Now, the downside of that is we shouldn’t have to wait for a major event like the World Cup to come to town to get these things done. So it puts into perspective that we could probably be doing this on the regular, but it takes a major event to actually get politicians to act and get necessary things done.

Mike Moffatt: Absolutely. And I don’t want to downplay all the sort of importance of sports. I grew up in the 1980s, and a lot of us Canadian kids who were born in the late 1970s ended up becoming baseball obsessives. The Montreal Expos were good. The Toronto Blue Jays made the playoffs in 85, went to the World Series in 92 and 93. And that’s defined a large part of my personality and my life. So I think all of that’s important.

But what I think is problematic is this economic math. You hear these numbers up front like, FIFA’s claim that Canada is going to see $3.8 billion in positive economic output, but these come from economic impact assessment studies that are commissioned by the event organizers themselves and, frankly, are complete nonsense. Peer-reviewed research, which we’ll link to in the show notes, showed that the actual value of these events in economic terms is negligible and in some cases actually even negative.

Sabrina Maddeaux: That’s really interesting. Negligible is one thing, but negative is a completely different story. The public is skeptical. Tell me more about that.

Mike Moffatt: Well, it really goes to what’s measured. So, how the commissioned studies work is that they measure total spending. So every dollar that’s even remotely associated with the event- spending at bars, every hotel booking, every jersey sold and so on- it all gets counted. But the problem is they don’t measure the counterfactual. What would have happened anyway? Because we know that Toronto and Vancouver in June and July are already peak tourism season, and a lot of those visitors are going to displace other tourists who would have come but didn’t because they thought it might be too expensive or too crowded.

So we might actually get less tourism out of this because you’re chasing away a lot of potential tourists who hear that the World Cup’s going, they don’t have any interest in that, and go, “Oh, that’s going to be really busy.”

But at the end of the day, the World Cup amounts to 13 games in Canada. To put that into perspective, the Toronto Blue Jays play 81 games in Canada each year to similar-sized crowds. So it’s not that many seats that are getting sold. And there’s a lot of potential disruption around that.

Sabrina Maddeaux: Toronto’s definitely always busy this time of year. Hotels are booked up, restaurants are full, patios are crowded, and then you think about sporting events, concerts, and festivals. There’s already so much going on that you have to think: is it really worth this major cost for a handful of games? And, filling up hotel rooms that might have been filled up anyway?

Mike Moffatt: Exactly. The displacement here is really important. So if a local spends money at a FIFA fan zone, that’s money that they’re not spending at the neighbourhood bar down the street or going to watch a Jays game. So you’re moving dollars around more than you’re generating new ones. You’re going to the bar to watch a World Cup game instead of watching a Jays game. And keep in mind, a lot of that activity would still happen if the World Cup were somewhere else. If these games are still in the United States, I think a lot of Canadians would be going to their local bar and watching them anyway.

So we have to kind of understand that a lot of what they’re adding in would have happened anyway, regardless of where the World Cup was being held. And there’s both a countrywide effect and a local one here.

Sabrina Maddeaux: That’s really interesting that a lot of the economic benefit might have happened anyway, but it could also be actually taking away from whether that’s certain restaurants and bars or even just the downtown core. I think about being in Toronto, and there’s so much fear around the traffic situation during World Cup days, because our traffic is already terrible and you can’t get around in certain areas of the city, which might just come to a standstill. So people might not be going to businesses in those areas or just coming downtown to other areas because they don’t want to deal with it.

There’s talk of offices being closed on those days or people working from home, so maybe they’re not buying lunch or their coffee from the local cafe. There are all these knock-on impacts that we’ve yet to see.

Mike Moffatt: Absolutely. There are these things that aren’t getting measured that governments don’t talk about and so on, but they affect the economic outcomes.

Sabrina, you’ve written a lot about the gap between what governments promise and what they actually deliver. So when you hear that Toronto has set a $380 million budget for this tournament, Vancouver’s bill is somewhere in the $500 to $600 million range. And the parliamentary budget officer puts the combined public tab at over $1 billion. What goes through your mind here?

Sabrina Maddeaux: This is a pattern we know really well. Governments announce a big number with big promises attached, costs balloon, projected benefits get revised quietly downward, and the public only finds out years later.

Mike Moffatt: And this really bugs me. As a housing guy, I find it incredibly frustrating to constantly hear from municipalities and cities that they can’t possibly reduce development charges or other housing-related taxes, but all of a sudden they have this money to spend on soccer. It’s incredibly frustrating.

Sabrina Maddeaux: And meanwhile, FIFA is projecting 11 to 13 billion in revenue from this tournament. And host cities get essentially none of it, which I’m not sure the average person realizes. So ticketing, broadcasting rights, and sponsorships all flow back to Zurich.

Mike Moffatt: Absolutely. So even if we ask the general public, they’re not given the information that they need in order to make an informed decision.

Sabrina Maddeaux: So let’s dig into that FIFA revenue model just a bit more, because I think most people don’t realize how it actually works. All those broadcasting rights, sponsorships, ticket sales- that’s all going back to FIFA in Switzerland. So what do host cities actually get?

In Toronto’s case, BMO Field needed to be expanded to meet FIFA requirements. That’s a real cost. Vancouver’s BC Place needed significant upgrades, and ultimately that was paid for by taxpayers at the municipal, provincial, or federal level.

So what cities get in return is the economic activity that happens around those games. Again, the hotel stays and restaurants spending and so on. But there’s a catch here: FIFA’s contracts actually restrict what cities can do commercially in their own territory. So Vancouver has to maintain a commercial exclusion zone of around two kilometres around the stadium. That means that local businesses outside of FIFA’s approved sponsor network can’t advertise or promote themselves anywhere near the action.

So it’s a bit like being asked to throw a party at your house. You pay for all the food and drinks, but you’re told that you can’t invite your own guests or sell anything yourself. But I get to sell tickets to go to your place. I capture the revenue. So it’s a real imbalance where FIFA gets the money, the cities get the bill.

Sabrina Maddeaux: And there’s also a tax element to this I want to get into. What exactly does FIFA demand from host countries in terms of tax treatment? And what does Canada have to give up here?

Mexico is hosting some games. They went the furthest. They’ve enacted a comprehensive federal exemption for FIFA and all its corporate affiliates, basically creating a tax-free commercial zone for the tournament.

Canada, luckily, we took more of a targeted approach. We focused more on customs and event-related tax relief rather than a blanket income tax exemption. So it’s not quite as egregious, but it’s still foregone revenue that we could have used for something else, like housing.

So once again, FIFA captures the commercial upside, but they pay no taxes on it and then require the host nations to give a bunch of specialized tax relief. So it really is a complete transfer of risk and reward from the public, subsidizing this private organization that essentially gets non-for-profit, and in some cases, charitable status.

Sabrina Maddeaux: That is wild. Because there’s the cost of that headline number that cities and countries are paying to host these events. But when you talk about tax relief, it is a subsidy. So that should be added to the total, in my opinion.

Mike Moffatt: Absolutely. And once you do add it to the total, it makes the economics of these events look even worse.

We’ve talked a lot about the government, but let’s talk about what it means for the actual people on the ground. The regular people living in Toronto and Vancouver right now. So that’s you. I’m here in Ottawa, so that’s not me. But, for folks like you, beyond the kind of public balance sheet, I've got to imagine there are real quality-of-life effects hitting middle-class folks and working-class residents. So what are you seeing and hearing in Toronto?

Airbnb ran a campaign offering Toronto homeowners $1,000 to sign up and rent out their places during the tournament. So on the surface, that might sound like a nice income boost, but tenant advocates flagged it immediately because some landlords will just use this as cover to push out long-term tenants or to cash in on short-term rentals. So there’s an issue there, too.

And then we have the transit question. Transit systems are going to be extremely busy and overwhelmed during this period. Boston actually hiked their train fares to the stadium to $80 USD on game days. New Jersey’s transit authority inherited a $48 million bill to move fans and got nothing from FIFA to cover it. New Jersey’s governor literally tweeted that FIFA should pay for the rides. Ontario and Toronto said they’d hold fares steady and increase service instead. And that’s a good call. But there’s still a cost to that. And wear and tear on the system. And the fact that some cities are pricing out local commuters of their own transit network to subsidize fans going to a privately run mega event is a pretty sharp illustration of who gets treated as the priority.

And then you talk again about all the traffic and the ability to just get around your own city for everyday life: for work or for seeing friends during a time of year - we only get three months of summer. So, people are eager to get out, and a lot of them might be trapped at home - especially if you’re not someone who’s lucky enough to escape the city and go to a cottage during that time period.

So there’s that through line here with a lot of what we cover on the show. The benefits of a big economic event are flowing to property owners, hotel chains, and investors. And then the costs and disruptions land on renters, middle-class workers, small businesses outside the FIFA commercial zone, and people who just need to live their lives.

But I want to come back to the historical record here because I think it’s really important context. South Africa, Brazil, Russia, and Qatar all made big promises about the economic legacy of hosting their World Cups. Do you know how those actually played out?

Mike Moffatt: One of the biggest expenses here, and one of the things that really affects the numbers, is the cost of the stadium infrastructure, which is often cited as one of the benefits of hosting, but it’s also a real cost, as multiple World Cup host countries ended up with what economists called white elephants. Large stadiums that cost enormous amounts to maintain but sit mostly empty after the tournament.

To be fair, Toronto and Vancouver aren’t building from scratch. They look a little bit more like France and Germany. They’re upgrading existing venues that have genuine long-term use. And, 16 cities across three wealthy countries, Canada, the US, and Mexico. It’s a different risk profile than Qatar or parts of Russia. But I’d say the broader lesson from every past World Cup is that the economic projections tend to be somewhere between optimistic and just outright fiction.

Sabrina Maddeaux: It’s interesting because spreading it, though, across so many cities means that every city is getting fewer games. And especially with expanding the pool of teams that qualify this year, a lot of those games are considered not very good games to watch. So there are a lot of unsold tickets. There are questions around how many people actually pay the huge price tag for this, and what the benefit will be when it is so spread out.

But at the end of the day, it’s all about the fans. Or at least it should be if you believe the marketing. So let’s end on the fan access question, which has been a big one. And I think it’s the most visceral symbol of the class dynamics at play here. Who actually gets to go to these games, and what does that experience look like when you get in there?

Mike Moffatt: This is where it gets really stark. So FIFA introduced something called dynamic pricing, which is actually what my PhD thesis is on. I designed some of these algorithms, so I might be partly at fault here, but I changed my career, changed my ways.

FIFA is also getting a code of not just sales, but resales. At the final at MetLife Stadium, there were resale listings as high as $2 million a seat. If you wanted to follow your national team from the group stage to the final, through the official supporter route, it would cost you about seven grand per person, and that’s over five times what it was in 2022. But if you’re doing it, having to buy these tickets through unofficial channels is going to cost you a lot more than that.

FIFA is also nickel and diming people even more than they have in the past. For example, there’s this thing called fan zones. And these were traditionally free public watch parties that are close to the stadium. Traditionally, they had been free. Now some cities are going to be charging. So there’s a lot of backlash here.

Sabrina Maddeaux: All of that is why we wanted to do this episode. We talk a lot about housing and infrastructure and economic policy, and an episode on a major sporting event, The World Cup, might not seem like a natural fit for The Missing Middle, but when you’re talking about investments this big and events that bring so many people to them, there are all of those ripple-on impacts. And they do impact the average worker in the middle class.

And, in the host cities, the economic gains from their presence flow to property investors and hotel chains. While the public picks up the security bill, waves the taxes and absorbs all the costs we’ve talked about. The civic costs are socialized, the financial gains are privatized, and the cultural experience is more and more commodified. (Boom! Mic drop)

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

Mike Moffatt: And if you have any thoughts or questions about the 1981 Montreal Expos and how they created a generation of Canadian baseball fans, please send us an email to the missingmiddlepodcast@gmail.com.

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

Additional Reading/Listening that Helped Inform the Episode:

BMO Capital Markets -- Canada World Cup GDP boost (up to $6.5B):

The World Cup is expensive, but it’s our turn to pick up the tab

ProPublica -- ‘You do, you pay, we take’: how FIFA’s host city deals work:

FIFA estimates $3.8 billion benefit for Canada as 2026 World Cup co-host

BNN Bloomberg -- Why economic impact on Vancouver and Toronto may never be known:

Bloomberg Tax -- FIFA 2026 World Cup tax demands on host countries:

CP24 -- Toronto holds transit fares steady; NJ Transit $48M bill; Boston $80 game-day fare:

ESPN -- World Cup ticket sticker shock and dynamic pricing:

Victor Matheson / Holy Cross -- The Economics of the World Cup (academic; stadium white elephants, tourism overestimates):

Funded by the Neptis Foundation

Brought to you by the Missing Middle Initiative