National Post (National Edition)
PM bathes millennials in red ink
The business section of a well-known Canadian newspaper warned the other day that any forecasts contained in the federal budget should be treated with extreme caution, given the fact economists have a lengthy record of getting their predictions seriously wrong.
Most economists have no more clue what’s going to happen down the road than you or I, because they have no way of telling which of the 7 gazillion influences they’re aware of may come into play, not to mention any unknown factors, which are hard to identify, because they’re unknown.
Purely by accident, no doubt, the same newspaper printed another story soon afterwards, suggesting Canadian investors unload any excess holdings they might have in the loonie, because economists predict it’s in for a fall. Whether it was the same set of deeply fallible economists surveyed for the first article wasn’t clear.
The number forecasters would do better to digest is located way over in a different set of statistics, pertaining to the fact we all eventually get old and die. It indicates that the population of millennials in Canada is now neck-and-neck with the remaining supply of baby boomers; in several provinces they already outnumber their older and greyer compatriots, and the gap can only increase, given the “getting old and dying” thing.
For several years now there have been more millennials in the workforce than boomers, meaning they are now officially paying for their parents’ retirement.
And this year, for the first time, every millennial will be old enough to vote.
It’s an important moment, for a variety of reasons. Prime Minister Justin Trudeau owes his current position to the fact large numbers of millennials turned out on his behalf in 2015. Holding their support, and adding to it — not to mention convincing the younger ones to get out of bed and bother voting — will have an enormous impact on the outcome of the federal vote in October.
Andrew Scheer and Jagmeet Singh may both be younger than Trudeau — Scheer, the baby of the group, won’t turn 40 until May — but the election may depend more on who can appear younger, who can establish a connection, and who can produce some policies that give millennials, and those poor, forgotten Gen-xers, the sense that Ottawa is finally paying more attention to them than to the fast-retiring folks who pass their time keeping track of their pensions and turning up for discount day at the local pharmacy.
Judging by Tuesday’s budget, the Liberals are way ahead in this game than the other parties. The plan to help first-time buyers fight their way into the housing market is aimed directly at the core concern of thousands of millennials. Sure their parents and grandparents are happy to be sitting in comfy old homes with a leafy back yard and two-car garage, worth three or four times what they paid for it back in the day, and maybe they’ll inherit part of that windfall some day down the road, but at the moment they’re facing mortgages that would choke an elephant, for a tiny, cramped condo priced like a Vancouver penthouse, before you even get into maintenance fees.
There’s also an expansion of the RRSP option for home buyers, a break on student loans, talk, yet again, of pharmacare, and money for retraining people who find their skills already out of date. The details are foggy, the promises sound familiar, no one in Ottawa can even begin to explain how the mortgage deal will work, and the RRSP break only kicks in if you’ve already saved $35,000 towards retirement — yeah, fat chance. If this group had that kind of money, they wouldn’t need helping paying their student loans. But never mind, at least it’s a hint that politicians are finally paying attention to the people who are driving the economy and paying the taxes, as opposed to their parents.
Those parents have a lot to answer for. Has there ever been a generation that did more to make its own life comfortable, while leaving the bill for those who come later? Those of us in the boomer generation did a great job of building a welfare net thick with benefits. We’ve just never wanted to pay full fare.
Finance Minister Bill Morneau continued that tradition Tuesday, casually shovelling a few more billions in annual deficits onto the mountain of debt amassed over the past 50 years. The real debt escalation started with Pierre Trudeau, who managed one balanced budget in his 15 tries, and continued through ensuing Liberals and Tories until the mid-1990s, when the crisis finally hit home and forced Ottawa to act.
Now we’re back to shrugging our shoulders as if debt didn’t matter. After winning the 2015 election the Trudeau government ignored its pledge to balance the budget in its first term, and has instead added more than $50 billion so far, with another $20 billion projected this year. Morneau considers that so insignificant he spent part of his day Tuesday mocking Conservatives for suggesting it could be lower. Indeed, strong revenue meant Morneau had about $28 billion more than anticipated, but, rather than pay some past bills, he opted to spend it all on something else.
It fits the pattern. For boomers there’s always been something more important than paying for what we consume. We leave that to future generations. Maybe millennials will see things differently as they assume the controls. They might not have much choice: we’ve handed them a debt approaching $700 billion, not including provincial shortfalls, for stuff they didn’t order.
Somewhere down the road, when Trudeau has finished apologizing to everyone else, he should consider offering an apology to young Canadians for decades of prime ministers leaving them in the lurch.
WE’RE BACK TO SHRUGGING OUR SHOULDERS AS IF DEBT DIDN’T MATTER.