This executive summary lays out highlights from the report Wealth Building for Young Canadians听written by Max Bell School Master of Public Policy students Gabriel Blanc, Samuel De Gr芒ce, Kiran Gill, and Jacob Kates Rose as part of the 2025 Policy Lab.
Access the summary and presentation below, and read their full report here.
It is becoming harder and harder for young people to stay afloat in the Canadian economy. After 30 years of relative economic stability, Canada now appears to be entering a new and more turbulent time with a greater risk of frequent economic shocks and upheaval. When economic shocks occur, such as the COVID pandemic or the ongoing trade dispute with the United States, it is early-career workers who are first to experience lay-offs. The labour market is increasingly characterized by precarious employment, such as gig-work.听Asset building, largely through the housing market, has been key for previous generations鈥� financial stability 鈥� Today, young Canadians, especially those who did not grow up in wealthy families, are less likely to find a first rung on the property ladder.
Meanwhile, rents have climbed significantly: In 1981 the median rent in Toronto and Vancouver consumed 25-27 per cent of the median young adult income, by 2021 that number was 36-37 per cent.听While post-secondary credentials still offer some return in long-term earnings, the value of that return has been declining over the last 25 years, leaving more students with uncertain futures.听Furthermore, there remains a persistent gap in the likelihood of young people attending post-secondary education based on family income.5 If nothing changes, intergenerational inequality (between young and old) and intragenerational inequality (between rich and poor in the same age cohort) will only continue to grow in this country.
Social Capital Partners (SCP) is a Canadian national non-profit organization in operation since 2001. The organization seeks to develop and promote viable policy solutions that create opportunities for working Canadians to build wealth and reduce the concentration of wealth in Canada. It has a track record of successful policy innovation,including Employee Ownership Trusts. This current project was sponsored by SCP as a challenge to build assets for young Canadians. Specifically, we were asked to:
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鈥�Design a new policy or program, or amend an existing one, that will meaningfully increase opportunities for workers in Canada to build wealth and decrease wealth inequality. Identify leading practices that drive wealth creation in lower- and middle-income demographics, particularly for younger demographics (18-45), from other jurisdictions or at a smaller scale within Canada.鈥�
This document reports on the results of our analysis and advice for a package of policy changes that will help economically vulnerable young Canadians build wealth, and mitigate trends in intergenerational and intragenerational inequality. This package of policy change addresses an increasingly immobile class structure caused by the housing crisis and wealth concentration. By empowering Canadian workers to take risks and plan for the future, this set of changes can improve all Canadians' resilience in the face of economic shocks. We propose to:
- Expand asset-building programs associated with Registered Education Savings Plans, to make investment in human capital for the next generation more accessible to youth from low income families, so that the lifelong returns to education can be more equitably shared.
- Implement a Youth Employment Supplement, to support young workers in their early career and incentivize labour market participation, so that the transition from school to work and towards financial independence is better supported for youth who cannot rely on family support.
- Implement a Canada Savers鈥� Credit, to incentivize saving by low income Canadians and increase their liquid assets so that more Canadians have a financial cushion to weather shocks and take productive risks.
These three proposals can be financed first through modest reforms to Canada鈥檚 generous but poorly targeted seniors鈥� benefits, such as Old Age Security and the Age Amount, and second through reform to a regressive wealth transfer program, the First Home Savings Account.
These recommendations put Canada on the path to addressing increasing intergenerational and intragenerational inequality. They are targeted both by income and by age. They do not entail significant new expenditures or new taxes. Through targeted interventions to promote assets for human capital, wage incentives, and savings incentives, all delivered through existing programs and systems, the Government of Canada could make significant improvements to the wealth building prospects of low income young Canadians.
