Boom, Bust & Echo Revisited: What a 1996 Demographics Book Got Right and Very Wrong About Canada

How population aging, immigration policy, and housing decisions shaped the Canada we’re living in now

Canada’s housing crisis. Youth unemployment. Immigration debates. A broken healthcare system.

What if we told you a book published in 1996 predicted almost all of it?

Thirty years ago, Boom, Bust & Echo became a surprise Canadian bestseller by arguing that demographics would quietly shape the country’s economic future. Written in 1996, the book examined how the aging of the Baby Boomers, the smaller Gen X cohort, and the emerging Millennial generation would affect housing markets, employment, immigration policy, health care, and government finances. Many of its warnings and insights felt speculative at the time. Today, some feel uncomfortably familiar.

In this episode, we revisit the book with the benefit of hindsight and ask what it got right, what it got wrong, and why. We explore how population aging reshaped health care and labor markets, why housing did not revert to being “places to live rather than investments,” and how immigration and planning decisions altered the trajectory of home prices and affordability. The discussion also looks at political constraints that limited policy responses, particularly around taxation, housing supply, and intergenerational equity.

This is not a retrospective about prediction accuracy alone. It is a conversation about choices. The economy did not simply evolve on its own. Governments made deliberate decisions in response to demographic change, and those decisions produced consequences that are now shaping the lives of younger Canadians. Understanding that history helps clarify the tradeoffs facing Canada today and why demographic realities cannot be ignored when designing long term 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, which has been lightly edited.

Cara Stern: When we announced the plans for the podcast. We talked about how one of the inspirations for what we’re doing on DemograFix. Came from the book Boom Bust & Echo, and that book talked a lot about how demographics shape a country, and how, by looking at demographics, the authors were able to predict a lot of what actually happened in Canada.

They were able to see a lot of the problems coming from far away. And to be honest, I had never heard this book when you first told me about it, Mike. But when I told people in my life, especially Boomers, Gen X, that this is what we’re doing with the podcast, all of them knew the book.

And I’m like, what is this public policy book that seemingly everyone knows in Canada if you’re a certain age or older? So I was hoping you could fill me in and tell me why was it so significant when it came out?

Mike Moffatt: To be honest, I think it was a surprise success. You have a book written, co-authored by a journalist and an economist/demographer from the University of Toronto. That does not sound like a runaway bestseller hit, but it absolutely was. Sold hundreds of thousands of copies and was just this big surprise phenomenon.

And I think a few things explain it. The country was changing. Canada was changing in some pretty obvious ways. This is, just after the recession of the late 80s or early 1990s, we had the free trade deal and so on. But one of those big ways was the aging of the Boomers. So if you look when the book came out, the first edge of Boomers had just turned 50.

And as somebody who isn’t that far away from 50, I can tell you, you start thinking about retirement. Your kids might be leaving home soon, maybe not in this economy, but back then the kids would be leaving home. So you had this massive cohort of people who were either experiencing this change or about to experience this change or starting to think about retirement and not necessarily having enough savings for retirement.

I think that really focused the mind. And it just I think it was one of those points that really shows that the Boomer life cycle explains so much of what’s happened over the last 50, 60 years.

Cara Stern: It’s amazing that people remember it 30 years later. Do you think that the book is still significant, if you read it now?

Mike Moffatt: Yeah, absolutely. I would suggest people do. One of my favorite things to do is, I love 80s movies, as any good Gen Xer, and I love watching Back To The Future 2, which is set in the futuristic year of 2015, and it’s always fun to see what they got right and what they got wrong. And I’m still waiting for my hover skateboard. I feel like rereading Boom, Bust & Echo today has the same vibe that we are living in the future that they were worried about and they were predicting.

So it’s interesting to go back and see, what did they get right and what did they get wrong? And how did policymakers navigate over the last 30 years this big wave of Boomers entering their retirement years?

Cara Stern: I think one of the best ways to go about unpacking what they got right and what they got wrong is to highlight a few quotes from the book and discuss what happened. So one thing to note is that the title is Boom, Bust & Echo, and that’s referring to the boom being the Boomers, the bust being Gen X — I think they should be called busters because that’s way more fun — and the echo, which we now call Millennials. So this first quote is a prediction about the future of work. And so keep in mind this book was published in 1996.

Provincial governments are closing hospitals and putting a new emphasis on home health care just as the front end of the massive baby-boom generation is about to turn 50 and start needing more health care services. That means home health care will be a growth business in the years and decades to come, bringing with it employment for a wide range of health care and personal service workers.

Mike Moffatt: I think they absolutely nailed that one. Now, I suppose if you don’t want to be charitable, you can say the degree of difficulty was low there. They’re going, 30 years from now the 50-year-olds will be 80, and therefore need extra services. But I think this shows the value of what they were doing.

Oftentimes I don’t think we take a step back and go, we have to make policies today, but what are the conditions going to be 20 or 30 years from now? So I think it shows the value of this approach. And I think policymakers did make a number of changes to the health care system, make a number of changes to things like temporary foreign workers to bring in more personal support workers.

Obviously, they didn’t get it all right, but they were thinking about these things. So that’s my call as somebody who was… well we were both old enough to live through it. I was just probably a little bit older and more aware of the world. I would love to hear your take.

Cara Stern: I’d like to think I was very aware of the world at seven, but I don’t know if that was the case. I was very into Sailor Moon at the time. Not so much politics and demographics.

It doesn’t seem like it’s been a very smooth transition though. You look at the number of PSWs that we have and it’s such an expensive form of health.

With so many Boomers who were going to need that and that there was going to be that transition to home health care, you’d think that they would have made a better plan for it. And yes, we do bring people in from other parts of the world. But at the same time, it’s a really tough job to be a personal support worker.

It’s so tough. It doesn’t pay very well. And when you have that combination of low pay, part-time hours and inconsistent hours and limited benefits, it’s no surprise there are shortages. And I’m just surprised that — I mean, not that surprised, but I’m disappointed — that the government didn’t actually make it more appealing for people to go into that field.

Instead, it seems like we’re still going to have those kinds of very low pay, low flexibility jobs and just saying, we’ll just bring people from other parts of the world and they can do it. It doesn’t seem like a good way to grow.

Mike Moffatt: Yeah, I think governments have some natural challenges here where they needed to increase the number of health care workers. Most of whom are either directly or indirectly paid by the government and increase their wages and working conditions to make it a better form of employment. And you’ve got more people times higher wages. That’s going to be a lot more money, and governments are going to be hesitant to do that.

So I do have some sympathy for policymakers here. But I think it’s also fair to say that they could have done a better job.

Cara Stern: And hospitals are still full right now. It’s still expensive to access that home health care. And there’s still too much demand for the hospital space that we have.

Mike Moffatt: Part of that is investments not keeping up, and some of that was unexpected population growth. I’m sure we’ll talk about that in a minute. So two things for you: First, I’ve now decided for Halloween, if we do a Halloween episode, I am going to dress as Tuxedo Mask, now that I know you were a Sailor Moon fan.

The second thing I have for you is a quote from the book, Boom, Bust & Echo. I’d love to get your take on it. And it’s from a section titled “Older, Wiser Canada”.

Immigration policy should not be based on an imaginary demographic crisis.
Many people would like to move to Canada to work or to join their families or because they are fleeing persecution. But we should manage the policy so that both immigrants and hosts benefit from it.

That requires taking demographics into account when we set both immigration levels and selection criteria. … as the echo generation enters the labour market in the first decade of the next century, Canada will need to consider curtailing immigration.

It does not make sense to bring in a flood of 20-year-old immigrants to compete for scarce jobs just when large numbers of Canadian-born 20-year-olds are also entering the labour market. Doing so would be unfair both to immigrants and to resident Canadians.

So, Cara, this quote is from 1996, and I would love to get your take on it.

Cara Stern: When I read this, I just thought, wow, the government did not read this book. They did not follow this at all. It’s wild to see how predictable this was 30 years ago. They just did the opposite of the advice that was given here. So maybe they did read it and they just decided to do the opposite.

What comes to mind is something that our producer, Meredith, and I have talked about — why we do what we do and why we like to work together for so many years in this field, is because people need to understand that the economy is a series of choices. It’s not this thing that just exists.

So the extremely high youth unemployment we’re seeing right now, that was a policy choice. The challenges that it created for these immigrants who came here, that was also a policy choice. And I just wonder, did politicians just have tunnel vision saying, we want endless growth, we don’t care about anything else, and they just chose to ignore what were these pretty obvious consequences that would come from the choices they were making?

Mike Moffatt: So I would have a different take on it, that I actually think they just drew a different conclusion than the book, that I think they were worrying about all the Boomers retiring and what that would do to our economy, where you have a big cohort of the population who’s not working, who needs health care and government benefits. They asked the question, who’s going to pay for that?

Now, they were worried about your cohort, and they were worried that there would be only a few of you paying for a lot of Boomers, so your taxes would be massive, that it’s carrying the load. So instead of having eight Millennials looking after ten Boomers, you have 10 or 11 Millennials looking after ten Boomers.

There are these second-order consequences that may not have been thought out as well as they should have been.

Cara Stern: It really shows that the choices they make in one area really do impact other areas. And that brings us to the next quote, which is a fun one on real estate.

As a result [of the recession in the early 1990s] many of the Gen-Xers - those born between 1960 and 1966 - continue to wait for a chance to buy their first house. Moreover, because of the uncertain economy, not much new housing has been built in the 199os. That combination - lack of new supply plus pent up demand - is a volatile one. It could result in one last mini-surge in house prices before the 1990s are over.

After that, houses will be what they were before the Boomers entered the housing market, places to live in rather than investments. Boomers who think they will be able to sell their houses in, say, 2010 and live in luxury thereafter on the proceeds will be in for a surprise, because they are not going to realize profits anything like those the pre-Boomers currently cashing in on their houses are enjoying.

And to that I’m like nope, nope, totally wrong! Totally, totally, totally wrong! How did they get it so wrong?

Mike Moffatt: So kids, this is the reason why you never take investment or financial advice from an economist. I can’t imagine a worse prediction, but this was actually conventional wisdom at the time. If you go back and read newspapers from the 1990s, there was this big belief that Boomers were going to downsize their homes.

There’s going to be these glut of homes and home prices were going to crash. And in fact, that also affected urban planning, that there was this idea that we don’t need more family-size homes because all those Boomers are going to move to Florida or die off or what have you, and that’s going to open up all these homes and home prices are going to crash.

So that was the conventional wisdom. And you could understand why the demand for Boomers was drying up, that after about 1989 most of them had bought their first homes. Some of them might upgrade to something larger, but it didn’t look like we were ever going to have that level of demand that we saw between, say, ’86 and ’89.

Home prices were flat after the 1989-90 crash, and in fact, they went down. It depends on the location, obviously, but they went down from about 1992 and stayed flat till the early 2000s. But I think what the authors failed to forecast — there were a few things. One is, increased immigration. Obviously our population grew much faster than they had argued.

And maybe if they were here, they’d say, if the government had listened to us on immigration, then maybe home prices would be fine. I don’t know if that’s the case, but if I was the authors of the book. I think that would be the argument I would make. They certainly couldn’t have forecasted, or at least it would have been difficult to forecast, the global decline in interest rates that we had that help people afford larger mortgages, put down larger down payments, and so on.

They also failed to forecast increased restrictions on building, so things like urban growth boundaries and that kind of thing. So we also made it harder to build there. And finally, what I really love about this quote is this sentence: “Houses will be what they were before the Boomers entered the housing market. Places to live rather than investments.”

This is back in 1996. People often have this idea that housing as an investment is a relatively new phenomenon. These guys are complaining about it in ’96. They are saying, “Wow, those days are going to be over soon.” But it shows you that sometimes things just don’t change. And that I’m sure we could go find a book from 1976 that might be saying the same thing, that things were good a couple generations ago, but now housing is just an investment and is no longer a place to live.

Cara Stern: We’re just going to be doomed to always being nostalgic about the old housing market and being like, that was so much better. Which scares me to think, what are we going to be nostalgic for now? If we look back, if we look at the way that they were predicting it, that whole quote sounds like it could apply nowadays.

And the part that’s different is we know that the government has decided we do want to increase our population to pay for Boomers’ retirement. That is something that it seems like that’s been decided and that’s what’s going to happen. In which case, I wonder if that advice applies to Millennials right now.

Should they be able to count on their homes for retirement? Or will we see that collapse finally happen?

Mike Moffatt: I think a lot of it depends on the decisions that we make around immigration and whether or not it’s easy to build homes and so on. So my takeaway from this is that economists should not be making 30-year price predictions.

Cara Stern: Okay. We won’t do that.

Mike Moffatt: That’s absolutely the lesson here. That said, as somebody who bought my first home in London, Ontario in 2004, I am nostalgic for those days because that was awesome. So sometimes, this idea that things in the past were better is not always wrong. Again, at least in southwestern Ontario in the early 2000s, it was a great time to buy a home.

Cara Stern: Sounds like it could get so much worse, and then we’ll look back and be like 2022, that was a great time to buy homes. Everyone remember that?

Mike Moffatt: Absolutely, we’ve seen prices decline 20 to 25% the last little while. We could find ourselves 4 or 5 years from now, everybody kicking themselves going, “Oh, man, I wish I had bought at the bottom of the market.”

Cara Stern: If it is the bottom, who knows?

Mike Moffatt: Who knows? The problem is it’s hard to know when the bottom of a market is. So while we’re on the subject of housing policy, here’s another quote from the book for you.

Canada can cope and even prosper, during the grey interlude of Boomer retirement if we plan for it and make the necessary changes…

Because there will be relatively fewer taxpayers, government will have to move gradually from taxation of labour income to taxation of capital income….A country with an aging population has to consider increased taxes on interest, dividends, capital gains, and corporate profits. It also has to consider taxes on things that currently are not taxed, including foreign exchange transactions and, in Canada’s case, wealth.

Cara Stern: It’s interesting to see someone point out that endless population growth isn’t the only answer, but it feels like it’s politically a nonstarter to come up with anyways. We look at what happened when the Trudeau Liberals tried to increase the capital gains tax, and a lot of people who have a lot of power and a lot of say in the country, and who can access a lot of the opinion columns that we read, a lot of people were quite angry.

What I’ve been thinking about for a while now is that it is a little bit strange that we tax labour so highly and not something that’s less productive, like assets. You’d think the government would want to incentivize things that are productive for society rather than things that are passive investments. I especially felt this when I was trying to break into the housing market.

I would watch people making so much money on their homes and not having to pay taxes on it, if it was their primary home. Simply living in your home was creating wealth way faster than I could ever hope to make just by working and that just seems backwards to me. How did they get it so wrong?

Mike Moffatt: I think what they got wrong is the politics of it. So you had a cohort with a lot of investment income, particularly housing income, and they’re about to retire. So they’re not going to have all that much labour income. So I think it’s just unreasonable to expect a large cohort of people to vote for policies that are not in their direct economic interest.

It’s like asking an NBA team to support a tax on tall people. It’s not going to happen. So I think they got the politics of this wrong because they’re going, “Okay, it’s good for the economy as a whole.” But the economy as a whole doesn’t vote. You have individual voters, and they would look at this and go, “You’re going to tax me more. I don’t like that. I’m going to vote no.”

Cara Stern: Yet everyone says their top reason that they’re voting is the economy. You hear it all the time. I wish that the government wasn’t so beholden to people with wealth, and they could actually just look at what’s good for the economy as a whole, what’s good for the country as a whole, and make decisions accordingly. It feels really hopeless for people who didn’t get into investing before interest rates cratered and asset prices shot up.

Mike Moffatt: I think there is a fundamental difference here between people who are investing in companies and those companies are doing productive things, versus people who just bought a house 40 years ago and sat on it, and the value went way up. That wealth comes from the fact that they just happened to own a scarce asset. They didn’t actually build anything from it.

So, I think the distinction here of where that investment income is coming from matters a lot. But yeah, it would have been nice if we were able to unlock some of that real estate wealth and put it back into the health care system.

Cara Stern: So here’s another real estate prediction they made.

Population aging will also create opportunities for real estate developers, although the big growth won’t commence until after 2010, when the early Boomers are entering their 60s. Only a minority of seniors live in retirement homes; most live on their own or with their children. The Boomers, who see themselves as perennially young, are not likely to embrace conventional retirement villages. The winners among real estate companies will therefore be the innovators who figure out how to provide for the baby-Boomers’ changing needs without making them feel old. A successful housing community for aging Boomers will grow and develop along with its residents. It might start as a village of houses with a golf course and other recreational facilities. Later, hostel-type accommodation could be built for widows and widowers who need a greater level of service. Later still, nursing homes could be constructed as they are required.

Mike Moffatt: This has happened to a certain level. My favorite example is a place called The Villages in Florida, but I’m a bit surprised we haven’t seen more of these models as a way to create senior-friendly communities and simultaneously unlock existing family-size homes. I always had this idea that we could create a community, let’s say on Lake Erie near Leamington somewhere, you build 10,000 homes just for seniors.

And, one of the requirements of buying the home is that you have to sell your existing family home. We could probably unlock a lot of existing family homes in our big cities, create homes for the next generation, and create these great places for seniors to live. So these models do exist. But yeah, it is surprising that at least in Canada we haven’t had this massive scale that we’ve seen in places like Florida.

Cara Stern: We’ve seen it happen to some extent, naturally, there are many places called “Naturally Occurring Retirement Communities” where more than 30% of the people living there are over 65. I remember producing an interview with Dr. Samir Sinha at the National Institute on Ageing, and he talked about how there are many apartment buildings, neighborhoods and even towns and cities that you can identify around the country as places where you have a lot of Boomers.

And then you can bring in these services to help them, and it helps that they’ve already congregated. I remember he called Prince Edward County, a naturally occurring retirement community, just because so many people who are there are over 65. And it’s not built intentionally for seniors, but it does end up happening. And then you see places, Elliot Lake is one in Ontario, that there’s been some advertisement from the city saying, come here this is a great place to live for seniors.

They’re actually trying to make that where seniors go, and there’s a benefit to doing that. There’s efficiency and scale there for the services they need. But there is a huge opportunity for developers too. It is interesting. No one’s actually gone out — or maybe they have but not at any scale.

Mike Moffatt: Absolutely, and then there are developers out there who are trying to build in places like Prince Edward County. There’s been a lot of land purchases out there and a lot of developers with pretty ambitious plans. Now, the challenge they’ll run into is municipal planning, but also infrastructure.

Making sure that there’s enough water, wastewater. So I do think if I’m writing this book today, I think those are the test cases where you say, could we create these communities? And we haven’t really been good at doing that, of creating new communities and building up the infrastructure needed to support them, because a lot of how we do infrastructure planning is like a linear extrapolation. This is how much this community grew over the last five years, therefore this is how far it’s going to grow in the future. Instead of saying, we’ve got this untapped market need, let’s create a community for them and create exponential growth. Our systems aren’t really set up very well to do that.

Cara Stern: I guess what comes to mind is the people who are living right now, you have a bunch of people living in the suburbs — they’re not going to just go out and move to Elliot Lake necessarily, unless there’s a reason to do so. But a lot of people want to stay in their communities, they want to stay relatively close.

It makes sense that if they can build something in Toronto, in Vancouver, in the places where these people are living, or look at places where they are going anyways and then be intentional about it. But yeah, I guess you have to follow where people actually want to live too, right?

Mike Moffatt: Yeah, absolutely. But you’ve got a lot of people who have cottages in places like Prince Edward County, and it’s really not that far from Toronto. But I think there is a fundamental difference of saying, “Go, move to, some place in northern Ontario,” which is beautiful, but it’s not necessarily a place you’ve been to before, or it’s not easy to get back to where you are or if you’re saying, “Go to a Prince Edward County or go to a Goderich” or something like that, where you’ve may have been there a few times and can easily get back to Toronto or Hamilton or wherever you’re from. I think that’s a different value proposition.

Cara Stern: The last quote from the book that we want to cover caps this discussion quite nicely.

In the final analysis, what is the balance between these pros and cons? Is the demographic shift good or bad? The answer is that it is neither. It is simply a fact of life, and the better we understand it, the better we can prepare for the changes before they occur and adjust to them once they have taken place.

What do you think?

Mike Moffatt: I couldn’t agree more. This is a fantastic place to leave off that we’re not going to make good policy or good decisions if we ignore the facts in front of us and say, we don’t like that, that’s too depressing or what have you. So instead of trying "to say, “This change is good or bad,” we should be saying, “This change is happening.”

So how can we respond to that change and how can we limit the threats and increase the opportunities?

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 moving to Goderich, please send us an email to [email protected].

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

Additional Reading/Listening that Helped Inform the Episode:

Boom, Bust & Echo: How to Profit from the Coming Demographic Shift

David Foot on Aging Society & Youth

What David Foot didn’t tell us

Finding Naturally Occurring Retirement Communities