Are Young People Giving Up on Canada?

Is Canada worth it?

Meredith Martin

Mike Moffatt

, and

Sabrina Maddeaux

Apr 02, 2025

In this episode, conservative pundit Sabrina Maddeaux and economist Mike Moffatt discuss the critical intersection of the housing crisis and national economic security in Canada.

They explore how the inability to afford housing not only affects individuals but also poses systemic risks to the Canadian economy and society. The conversation delves into the implications of economic vulnerability, the talent exodus to the U.S., and the growing disconnection among younger generations. They emphasize the urgent need for a cohesive housing policy that addresses these interconnected issues to ensure a stable and resilient future for Canada. (This episode was recorded on Friday, March 28th, before the Liberals released details on their housing plan. We will be releasing an episode analyzing the major parties’ housing promises prior to election day.)

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

Sabrina Maddeaux: So, Mike, I've been thinking a lot about vulnerability lately, not just the personal kind, but the national kind. And I just wrote a piece for the Toronto Star about how our housing crisis isn't just an economic problem, it's actually making Canada more vulnerable to external threats, especially with everything happening south of the border with Trump's trade policies. Now here's the core of my argument:

When young Canadians can't afford housing, when they're living paycheck to paycheck, we're not just talking about a domestic issue anymore. We're talking about a national security problem. And one major part of this is increased financial vulnerability for individuals and also the economy as a whole.

Now, obviously you understand complex economic systems. It's kind of what you do. Can you unpack what systemic economic risks look like when a large percentage of our population is so financially unstable?

Mike Moffatt: Yeah, and there's a host of things. So it's not just, you know, one particular issue. It's kind of a whole bundle of things that happen. So if you have a lot of people, for instance, who, you know, are barely just paying the mortgage, maybe they're on variable rate mortgages or they've got fixed rates that are rolling over, those interest rates go up. You start to see people having to walk away from their home. We saw that a little bit, (not so much in Canada) but the United States during the financial crisis. So you can run into issues like that.

Clearly [you] run into issues around people not being able to take a job that they want because they can't afford to live in a particular city. You might have somebody who's living in northern Ontario or Windsor or wherever. They get a job offer in Toronto and go like, “I just can't take it”, right? “I just can't afford to move there”, right? You have employers in the GTA not being able to find people.

But I think some of the real risks come when particularly young men feel like there's no pathway to be able to get married, have kids, things like that. That, you know, they just become disconnected from the economy… A large part of societal problems are caused by young men with no opportunity and no hope. Societies don't tend to deal with that very well. So it is an issue.

And I'm really glad that you wrote about this because I think it's misunderstood, right? I think people think about these issues in terms of, you know, okay, ‘how much are you paying for a home’ or ‘can you afford a home?’ And those are important things, but there's all of these kinds of societal second-order effects, how it impacts our society, how it impacts employers' ability to find employees and that kind of thing.

So, going back to your piece, you liken housing costs to being an internal trade barrier. And we've seen there's been so much talk in the last three months about the need to knock down internal trade barriers… in response to the ongoing trade war. But I don't think that connection between housing and internal trade barriers is going to be obvious to too many people. So can you walk us through what you meant by that?

Sabrina Maddeaux: Yeah, politicians haven't seemed to make that connection yet, at least not publicly. Like you said, we've heard so much about internal trade barriers and the need to tear them down in response to Trump's threats. But a lot of the time we're talking about, can you move alcohol between provinces or other goods or very specific sets of professionals like doctors or trade workers?

But the reality is that our really high housing costs are an internal trade barrier, because one of our biggest assets and one of our biggest resources as Canadians is, of course, our talent. Whether that's young professionals, whether that's office workers or tradespeople, it's really hard to move these days. And part of that is because you simply can't afford to.

I know this myself as a renter who was lucky enough to secure my current place during that brief downturn during the pandemic. If I were to look to move these days, to find somewhere remotely similar would be almost double the costs. And that's not just within Toronto. That's going out quite far in the suburbs. And then you throw in moving costs on top of that that are high these days. And you really are locked into place. Same for even those, though, who were lucky enough to get into a starter home, as they might call it. It's really hard for them to move up that ladder now, because that next run is just so far out of reach. And so much of our income is going to either rent payments or mortgage payments. So if you do have an economic downturn where one area, one city centre or one suburb or one region is more impacted than another or one profession, it makes it really hard, like you said, to take job offers elsewhere. You just can't pick up and move. And especially coinciding with this emphasis on return to office from a lot of employers, the economic mobility is not just there. So where our economy could have a lot more flexibility and where people could be in positions that make them more productive, are best suited to their skill sets and allow them to start lives, they just don't have access to that.

So we need to be able to figure out, again, how can we free up this trade barrier where people can actually move, whether it's to another city within their province or across the country to find the work and the prospects that best suit them. And people are just not able to do that right now, which is an economic problem.

But it also, as we've been talking about, leads into the sense that you don't have control over your own life, that your future is stunted, that you don't have access to the opportunity prior generations had, which also leads to a sense of resentment and not feeling necessarily like Canada is living up to its end of the social contract. Which leads me into my next question here.

Polling shows younger Canadians are generally less enthusiastic about standing up to Trump than older generations. And the Ipsos poll actually showed four in ten young Canadians, which are, of course, those most impacted by housing costs, want to join the US. And a lot of young people are actually moving to the US if they can, with something like two-thirds of recent software engineering graduates moving south of the border. What does that talent exodus mean for Canada's economic resilience?

Mike Moffatt: It's a problem. And we're seeing that exodus. And this is historically a bit of an anomaly, not so much migration to the US, that's always happened. Through most of modern human history, people have moved to where the jobs are, right? Even though those places where the jobs are have traditionally been more expensive. So you think of people 100 years ago, moving out of rural areas and into towns just because there weren't manufacturing jobs or what have you.

But what we're seeing these days is the opposite of people actually moving away from places that have higher-paying jobs to places that might have lower-paying jobs, but it's worth it because of the difference in housing prices. And then when you have the situation where you can move somewhere with better wages and lower housing prices, that becomes really, really attractive.

So, you know, we are seeing large numbers of young Canadians move to the United States. Who knows if that will continue with the ongoing trade war. But we also see it in terms of domestic migration, that in the GTA, you know, they're losing about 80,000 people a year to the rest of the country. Some of that is to parts of Ontario, but a lot of that is to places like Alberta.

…About a year or so ago, Jesse Helmer and I looked at this phenomenon in the context of the Hamilton region. So…we wrote a paper called Who Will Swing the Hammer? Looking at labor market needs and housing - I got to give Jesse the credit for the title. He came up with that, and I thought it was brilliant - But it's an issue, right? Because what happens is, let's say you get people who move out of Hamilton. That makes it difficult for those employers to find people. And, you know, that's not just if they're moving to like Calgary or Edmonton or someplace.

One of the trends that we're seeing is you might have a teacher, an electrician, a carpenter, nurse, whoever. They move to a place like a Brantford or Tilsonburg or like Haldeman Norfolk or Thorold out in the Niagara region. And at first they start to commute back. They don't quit their job, but they find a place that they can afford maybe that's a 45-minute commute and they still continue to work there. But then they quickly realize, well, wait a second, Brantford needs nurses too. You know, Tilsonburg needs carpenters too. So what happens is after a year or two, they go, well, why don't I work locally? And even if I have to take a 5% to 10% pay cut, (in many cases they don't have to, but even if they have to,) the fact that they don't have to commute anymore more than makes up for that. So that causes a kind of hollowing out of the economy, particularly for these middle-class jobs that can't be done remotely.

Like it's one thing if, you know, a data scientist moves out of Hamilton and moves to Thorold, but, you know, can still kind of telecommute every day… but a nurse, a carpenter, an electrician, a teacher, they have to be on site. And it's really those on-site jobs where we see this hollowing out.

So absolutely, it does affect the economic resilience of our communities, regardless if those people are moving to a different country or if they're just moving down the 403.

Sabrina Maddeaux: Yeah, and one point I actually made in the piece is that of these young people who do want to move to the US, a lot of what's keeping some of them here is the fact that the US immigration system is complex and not particularly friendly in many ways to certain classes of workers. And one thing I keep thinking of is that if Trump really wanted to take a big hit to Canada, he could make it a lot easier for certain classes of workers or people under a certain age to move to the States and we could see a mass exodus of talent. And that's a really big risk, I think, as well for our economy.

But in addition to economic vulnerability, I also dug into how high housing costs expose us by ripping apart the social fabric. Essentially, the question is: How can we expect people to rally around the flag or stand up to external economic pressure when they feel so abandoned by the system? Mike, are we creating a generation that's much more likely to just check out in these situations than stand up?

Mike Moffatt: I think we are. I think an increasing number of young Canadians are feeling disconnected from the country, that the country doesn't speak to them, that most of the benefits go to older generations. And that could be home prices, that could be, we're seeing in the current election, policies to make seniors' benefits more generous.

And I've heard from young people who are saying: ‘well, look, I can't even afford a home. Whereas these folks have millions of dollars in assets just for sitting on a home for 40 years, and now they're getting an additional tax cut!’

So yeah, I think it does breed frustration and resentments when people say, okay, who is this country for at the end of the day? Is it for all of us or is it for a specific generation?

I've heard that before from my students. And the shame is, I wanna tell them that they're wrong. I really want to be able to say, no, no, I get it. There are problems here, but we are trying to make a difference. There's opportunities in this country for everyone. And I feel like increasingly, we're just not seeing that.

Sabrina Maddeaux: Well, when the wealth transfer only goes one way for so long, and every time there's an election, the first policies to come out only increase that wealth transfer.

Mike Moffatt: Yeah, well, absolutely. And I'm not making a partisan point here because we see it across the board from parties. And you understand the politics of it is you have a population that's more likely to vote, and there's a lot of them. So that's gonna sway policy. But I can understand why people in their 20s and even up to mid to late 30s are frustrated by this, that they feel like they just can't get ahead.

And we actually see that in the data. And I wanna be clear about this. When Sabrina and I are having these conversations, these are not just us kind of riffing. There's some there there as far as data goes.

So one of the things that has come out recently is the World Happiness Index. It comes out every year. Last year's report made a lot of headlines because it noted that 18 to 30-year-olds in Canada were particularly unhappy. We were 58th in the world for youth happiness. And that got a lot of headlines. I feel like this year's report didn't get as many headlines. There's a lot going on, Trump, the federal election and so on. But I think it's a wake-up call that Canada's ranking in the World Happiness Index has fallen to 18th. I think we were 15th last year. And a decade or so ago, we were in the top five. We're now down to 18th.

And part of that ranking, they ask people a variety of questions that determine the ranking. And one of the criteria is around the freedom to make your own life choices. And Canada, we rank in the 80s in that. That is where, by far, in the happiness data, we are the absolute worst. People in Canada feel like they don't have the freedom to make life choices. And that doesn't mean the government is saying, ‘oh, you can't do this. You can't say that.’ But rather the freedom that comes along with opportunity or choices or options.

And it's young people who are feeling that I can't take that job because I can't afford to live in that city. Or I'm gonna be living in my parents' basement forever because I can't afford rent. Or I'm gonna rent forever in my tiny condo because I am never gonna be able to get the down payment to afford a house. So I think about these things, this kind of being trapped, this lack of freedom. It shows up in the data. It shows up in the evidence.

But I also like to hear personal experience. You are one of those millennials. I'm 48. I'm one of the older cohorts that is a little bit happier. Do you see that with you and your friends and your colleagues who are in their 20s and 30s, that feeling of being trapped?

Sabrina Maddeaux: Oh, there's no question that there is that feeling of being trapped. And that's very tied to what we're seeing in the happiness data. And the fact that we're still plummeting in this data for multiple periods now shows this isn't just a blip or a one-time thing. This is an enduring trend and a real systemic problem that I really don't think we're seeing a coherent, really visionary plan from anyone on the political spectrum to fix right now.

This is a huge problem for our future, especially when we're talking about, again, tying this back to issues of patriotism and standing up for your country. You know, there's this rally-around-the-flag effect right now, but that's only going to last for so long. Trump is probably going to be in office for years, perhaps longer, or someone with the same ethos and political outlook might follow him. Or we're going to see threats from other adversaries like China or Russia. And to expect that young people who are so deeply unhappy and disillusioned are just going to put all that to the side for years or decades on end isn't realistic. These issues are going to come back.

But back to what you asked on the personal front. Yeah, I feel that personally. I'm a renter who feels stuck in that if I wanted to move for a job, I probably couldn't and have that be a sound financial decision - unless that job was really significantly paying more than my wages now - simply because my rent would rise so much or my quality of life would plummet so significantly.

I'm in my mid-30s, at that life stage where I'm engaged. I'd like to get married. Affording a wedding is difficult right now. Dealing with job insecurity. And when you look at the job market and know people who have been laid off, there's not a lot of work right now. And wages for those who are employed are very stagnant. I don't know a lot of friends getting raises despite their cost of living going up quite significantly. And even when it comes to starting a family, it's incredibly challenging. You know, I'd like to start a family sometime in the near future. But I think about the costs of that and having the space to raise a child. And that's just so discouraging and overwhelming.

And to think that you can do everything right, get the education you were told to get, get the good job, save your pennies, not do anything too extravagant and still to not even feel like you can afford to have a child. Yeah, that really makes a sore spot and should raise a lot of questions about what's wrong with our economy and society right now.

…I know I'm far from the only person in that position. It's quite a widespread feeling. So it's a real frustration right now.

But Mike, there are all these problems that we've brought up. But what's the way forward? Like, how do we actually reverse this happiness recession and its potential impacts on national cohesion? And how could leaders who are running right now to become our next prime minister actually begin to address this?

Mike Moffatt: Well, I think it comes back to the housing theory of everything. I hate to…the Missing Middle Institute is all about the decline of the middle class. We're not supposed to all be about housing, but we're kind of all about housing because really, if you don't fix housing, nothing else works.

And I think we need to focus on this kind of choice architecture. Right. Giving young people the hope that they'll one day be able to own a home if they want or or even rent if they want. So, you know, the Missing Middle Initiative is all around that option, that that freedom to to make choices…I think that should inform policy.

You know, use the NDP, for example. They've got some interesting policy on social housing, but they never talk about the ownership crisis. They never talk about the fact that middle class, young middle class people have lost the dream of home ownership. And I understand wanting to help those most in need, I think there's something noble about that. But I think you need to have that sort of choice architecture. And a lot of that comes to building because you can go the other way on this. A lot of times we hear ‘oh… we've got to prevent investors. We've got to make sure that nobody owns homes.’ Well, we still need homes for renters. Right? And somebody has to be the landlord. Right?

So you can go kind of too far the other way, focusing just on home ownership. And then, you know, end up really harming renters because some people either want to rent or are never going to be able to get the down payment. Right? So you need to have those options available for everyone.

So ultimately, it comes down to creating enough housing. But we're seeing from the federal government and both the Liberals and Conservatives reducing the GST on ownership housing to get more homes built. I think that's a great idea.

We need to see more governments provide more low-interest loans to get apartments built. You know, this is a wonderful thing.

We need to have a realistic conversation about how much land do we need relative to population growth? There's a very important conversation to be had about aligning immigration targets with housing growth.

Sabrina Maddeaux: And we have an episode on that!

Mike Moffatt: Like we have an episode on. … if you and I were running for Prime Minister, that would be one thing. That would be a heck of a campaign! But unfortunately, it's all these other guys. And they're not having that conversation for the most part.

I don't want to suggest that one option is better than another. Like, you can have a policy environment that has high levels of immigration, but you also have to recognize that that's going to require more land. Right? There's kind of only so far you can push the density point, or you can have the conversation - okay, actually, we're going to ramp down immigration to help the housing market. But you're also then going to have to realize like, okay, well, that's going to mean you're going to have fewer workers to support a lot of retirees. And that's going to put strains on paying for things like pension plans and so on. There's no necessarily right or wrong answer. But I think what the wrong approach is, is not having a plan at all, or at least not tying these things together.

So I would look at it that way- I'm looking for politicians to have robust housing policies, but also have a vision that ties together population growth and housing growth. So that's, from where I sit, that's what I'm looking for. I got to ask, what are you looking for?

Sabrina Maddeaux: For sure. All those things you said. And I think he is tying that population growth to how much we can build. And the housing targets that we've set forward, that we're not anywhere near meeting. So there are a few weeks left in this campaign. And I'm hoping that as the days roll on, we see more housing policy roll out from all parties, but not just, you know, a random policy here, a random policy there. Like you were referencing a really cohesive grand vision. I mean, now is the time to be bold.

We've seen a lot of attention obviously be taken up by Trump and everything going on but the point of my article in The Star and this episode is that housing isn't some standalone issue that only impacts individuals and whether they can afford rent or a home. This really is a national problem that leads to greater vulnerabilities, both socially and economically. And if we don't fix this, we're leaving ourselves open to attack.

So there are so many reasons why housing needs to remain a priority. And I really hope it doesn't get put on the back burner.

So we'll keep a close eye on it for sure as the election progresses. Thank you so much to our audience for watching and listening and to our producer, Meredith Martin.

Mike Moffatt:

And if you have any thoughts or questions about happiness and how we measure it, please send us an email to [email protected]

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