Brain Drain Is a Policy Failure, Not a Loyalty Problem
Stop Blaming Young Canadians for Leaving
Why are so many young Canadians leaving, and why are some people suggesting they should be punished for it?
In this episode of The Missing Middle, Mike Moffatt and Sabrina Maddeaux break down the growing “brain drain” from Canada to the United States and the shocking proposal that young people who leave should pay a $500,000 exit fee.
They dig into what’s really driving this trend: unaffordable housing, stagnant wages, limited career opportunities, and policy decisions that increasingly favour older, wealthier generations.
This isn’t about loyalty; it’s about survival and a country that may no longer offer young people a path to the life their parents had.
If you enjoy the show and would like to support our work, please consider subscribing to our YouTube channel. The pod is also available on various audio-only platforms, including:
Below is an AI-generated transcript of the Missing Middle podcast, lightly edited.
Mike Moffatt: Why are young people leaving? It struck me as revealing something bigger about how Canada has come to think about young people—that they’re a group that needs to be punished and controlled rather than actually talking to them and figuring out why they’re making the decisions they do.
Sabrina Maddeaux: It isn’t young Canadians who are abandoning Canada, but Canada that has abandoned them.
Mike Moffatt: So, Sabrina, you wrote a column for the National Post that got a lot of attention. I was really glad you wrote about this because it was something that was bothering me as well.
There’s this venture capitalist named Patrick Paquette, who was speaking at the recent federal Liberal convention in Montreal. He suggested that young Canadians who take jobs in the United States and move should be charged a half-million-dollar exit fee. This was his back-of-the-napkin estimate of what taxpayers spend subsidizing a Canadian university education. He was basically saying if you got your education here and leave, you have to pay for it; you owe us half a million dollars.
What was your reaction when you heard that proposal?
Sabrina Maddeaux: Shocked and appalled. Hearing this floated at a federal Liberal convention was stunning and completely absurd to me.
While I want to be clear there’s no indication that this is a serious policy proposal under consideration by the Liberals, it does represent something that’s gone mainstream: this dangerous idea that young people are not a future worth investing in, but a resource to extract from. Trapping all but the wealthiest young people in the country isn’t something you do in a capitalist society or democracy.
Beyond that, that $500,000 figure doesn’t square with reality. Young Canadians are graduating with more debt than ever into a job market where those degrees are worth less, where even people with jobs and good salaries can’t afford rent, let alone save for a home or start a family. Unemployment among young people is at its highest in decades outside of early Covid. These aren’t young people taking half a million dollars of taxpayer subsidies and going to the States because they’re entitled or not loyal to Canada.
Mike Moffatt: I couldn’t agree more. Are we going to start charging for exit visas like they used to do in communist East Germany? I could not believe this idea.
A note to political parties: don’t put randoms on stage during your conventions because you don’t know how that’s going to work out.
I was appalled by the idea, but let’s move to this question of why young Canadians are moving to the US in the first place. What do you see as attracting them down there?
Sabrina Maddeaux: They don’t see an economic future here. They can’t get jobs, and even if they can, they can’t afford a good quality of life or to start families. They look south and see salaries that are 50% to 100% higher. They see housing that’s hundreds of thousands, if not millions, cheaper and opportunities that no longer exist here. This isn’t opportunism; for many young Canadians, looking south is the only path to the kind of life their parents took for granted.
The irony is, the conditions pushing people out were largely created by policy choices made to protect older generations’ wealth and interests. To suggest that young people have somehow ended up on the advantageous side of an unfair bargain is absolutely crazy. In fact, the exact opposite is true. But politicians are afraid to match rhetoric and policy with this reality because of the large Baby Boomer vote.
I want to put a number on what’s actually happening here. Brain drain is often talked about in vague terms, but economists can measure it. What does it cost Canada when young, educated workers leave, and how do those losses compound over time?
Mike Moffatt: You’re absolutely right about why they’re moving. I taught at a university for 20 years and noticed in the last few years, more of them wanted to go to the US for the sheer cost of living. We can estimate the overall impact.
There’s a Bank of Canada study that estimates two-thirds of Canada’s productivity gap—our productivity difference from the United States—is due to differences in the productivity level of the top 10% of earners. The bottom 90% of Canadians and Americans are just as productive, but that top 10%? We are a lot less productive. A lot of that is brain drain, where we lose many of our best and brightest to the US.
If a sports team loses its best players to free agency, it’s going to get worse. We see the same thing here. When talented people leave, they take their networks, potential startups, ideas, and kids with them. This affects technology, medicine, and finance. The very people we’re hoping to build an economy with are the ones leaving.
Then there’s this political instinct you describe about governments wanting to apply a “stick.” They want a punitive exit fee rather than asking why young people are leaving. It reveals that Canada has come to think of young people as a group that needs to be punished rather than figuring out why they’re making these decisions.
What do you think that says about where Canada is politically right now?
Sabrina Maddeaux: The proposal is a symptom of a broader framing problem where young Canadians are treated as a cost to be recouped or a demographic to extract from, not a future to be invested in. This is a reversal of how older generations typically wanted to create better futures for younger ones.
The political calculus is that seniors vote at higher rates, own more assets, and have more political influence. This naturally shapes what governments protect. Now there’s been a decades-long accumulation of policy decisions—housing restrictions that inflated home values, tax structures that benefit asset holders, and immigration policy that inflated labour supply without building infrastructure—and those decisions have landed hardest on younger generations.
This exit fee proposal is the logical endpoint: rather than fix the conditions driving young people away, let’s punish them for responding rationally to those conditions. Blaming young people for leaving is much easier than confronting the policy failures that made staying so difficult. After this column ran, I got pushback online showing a chart that fewer Canadians are living in the United States today than in decades past. Mike, is brain drain not as serious as I made it out to be, or does that chart not tell the full story?
Mike Moffatt: The chart is factually accurate, but it’s answering a different question. It looks at the percentage of Canadian-born people living in the United States relative to the percentage of Canadian-born people residing in Canada. That number has declined, but the problem is that it looks at where someone was born, not where they’re coming from.
We know a lot of folks living in Canada weren’t born here, so it’s a misleading metric. We should be looking at net emigration from Canada.
The number of individuals leaving the country hit a 50-year high last year, and that’s probably an undercount. American data on Canadians moving to the US is higher than our own data because we don’t have a mandatory exit registration program. We work from tax filing data rather than hard counts. The true picture is likely worse.
What we do know is that 70% of those leaving have at least a university degree, compared to about a third of the general working-age population. Roughly 40% of Canadians who would rank in the top 1% of earners have already emigrated south. Those charts also don’t capture people who come here from abroad, study at our best universities like Waterloo, and then move to Silicon Valley or Austin upon graduation.
Sabrina Maddeaux: Canada ramped up immigration to address talent and labour shortages, but we’re seeing a significant portion of those newcomers leaving. Does that mean the immigration strategy was masking the brain drain problem, or did it make it worse by dampening young people’s employment prospects?
Mike Moffatt: It’s a complex and uncomfortable story. The net emigration numbers include many non-permanent residents and international students who are leaving, and it tends to be the best and brightest. Canada is basically being America’s farm team.
On the entry side, we have a problem with composition. Historically, we had a point-based system to find folks most likely to succeed. Over the last decade and a half, we’ve gone from about 67% of permanent admissions being point-system-based down to 58%. Meanwhile, the number of non-permanent residents has exploded from 67,000 in the year 2000 to well over a million. The skill profile of that temporary workforce has been diminishing; many are students on paper but are really here driving for Uber Eats while hoping for permanent residency.
This immigration strategy actively made conditions worse for young Canadians because the wage gap between temporary workers and Canadian-born workers doubled. These folks are ripe for exploitation, and it’s hard for a young worker to compete with that. Through the temporary foreign worker and international student programs, we undercut young labour by bringing in folks who didn’t have as many enforceable rights and protections.
Sabrina Maddeaux: The last line in my column was that it isn’t young Canadians who are abandoning Canada, but Canada that has abandoned them. It needs to put in the work to earn them back. What would earning them back look like in concrete policy terms?
Mike Moffatt: It starts with housing.
We need homes that are affordable again on both the ownership and rental sides. That includes three-bedroom homes with a yard where people can raise kids. We’ve put in too many restrictions—zoning, land use policies, and development charges. Solving that gets you two-thirds of the way there.
On the income side, we need a level playing field so you’re not competing with workers who have fewer rights. We also need to look at our tax and transfer system. So much money goes to support people who have already earned a lot. We help people living in $3 million homes they bought for $100,000 in 1982, but we aren’t helping those at the start of their careers who have precarious employment, high student debt, and no pension. All our financial support seems to go to folks who did really well in the housing market over the last 30 to 40 years.
Sabrina Maddeaux: The brain drain problem is real. It’s not a question of young people being ungrateful; it’s a value proposition problem and one of economic survival. Canada has to offer young people something worth staying for: affordable housing, viable careers, and a fiscal system that isn’t structured to extract from them to subsidize a generation that is, on average, doing significantly better.
Thank you, everyone, for watching and listening, and to our producer, Meredith Martin, and our editor, Sean Foreman.
Mike Moffatt: If you have any thoughts about moving to New York State at age 23 as I did, please email us at the [email protected].
Sabrina Maddeaux: And we’ll see you next time.
Additional Reading/Listening that Helped Inform the Episode:
Sabrina’s National Post column: Fix the brain drain by fixing Canada, not with a $500K exit tax | National Post
Statistics Canada — Recent trends in migration flows from Canada to the United States
The Hub — “Can anyone solve Canada’s brain drain problem?”
HRD: Canada’s talent exodus: What senior HR leaders can’t afford to ignore | Human Resources Director
Funded by the Neptis Foundation
Brought to you by the Missing Middle Initiative
 | A guest post by
|