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Here's How Justin Trudeau's Budget Screws Over Young People

The government is spending five times more per person on retirees than people under 45.
Manisha Krishnan
Toronto, CA
April 5, 2016, 1:48pm
Photo courtesy THE CANADIAN PRESS/Nathan Denette

After being elected to office last November, in part because young people turned out in droves to vote for him, Prime Minister Justin Trudeau made himself minister of intergovernmental affairs and youth. This, combined with a campaign that promised more jobs for that same demographic and improvements to student grant/loan policies, left many hopeful that his government would pull through for the increasingly broke and struggling under-40 set.

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Those hopes, however, were diminished with the recent unveiling of the federal budget.

According to an age-based breakdown by Generation Squeeze, a lobby group for Canadians in their 20s, 30s, and 40s, Trudeau's budget actually builds on the previous government's tendency to spend exponentially more on people aged 65 and up than those under 45, with $21,000 being spent per person in the first group compared with $4,550 per person in the second.

Paul Kershaw, a professor at the University of BC's School of Population and Public Health and founder of Generation Squeeze, explained that, when it comes to issues that matter most to young people, such as housing, child care, and post-secondary education, the budget is lacking.

"You might have expected, given all of the focus and to some degree you might say 'hype' the federal Liberal party has oriented around a younger demographic… that there might have been a little bit of actually narrowing the gap in spending between an older and younger demographic by giving some more significant investments in younger people," Kershaw told VICE. "At the end of the day, that's not what the prime minister's first budget is going to do."

Though the Liberals have touted their $4-billion Canada Child Benefit, aimed at giving cash back to Canadians with kids, as the "most significant social policy innovation in a generation," Kershaw argues that's mostly spin. There's little new money going into child care, he said, and the investment pales when compared to the $11-billion boost Old Age security will see over the next three years and the $6-billion increase in medical care, much of which will go to seniors.

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Meanwhile, the $2.3 billion in affordable housing over the next two years is targeted at the homeless and working poor, Kershaw explained, which is important, but there's been no mention of how to fix a real estate market that's "broken" for young people and newcomers.

"No matter what we do with respect to the job strategy, our primary cost of living—housing—is really getting more and more out of reach from a cost standpoint, and there was very little conversation about that in the budget at all," he said.

To combat youth unemployment, which is sitting at around 13 percent nationally, the Liberals have pledged to top up the annual $330 million already earmarked for the Youth Employment Strategy with $165.4 million in 2016-2017, with a total investment of about $1.3 billion over three years.

But Toronto-based labour lawyer Andrew Langille told VICE that's not enough.

"$1.3 billion over three years simply is insufficient when one looks at the mounting barriers facing racialized and First Nations youths when they try to enter the labour market. Simply put, the Liberals should be taking steps to ensure that all young workers in Canada, regardless of their background, have opportunities available to them, but that's not happening given the low priority that young Canadians have in this budget," he said. "There's an utter lack of intergenerational equity and once again the boomers come out on top."

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The Canada Summer Jobs initiative, originally set to generate 40,000 new jobs in each of the next three years, was slightly tapered in the budget, and now says it will create 35,000 new jobs per year.

The budget made no mention of Trudeau's promise to offer a year-long break on EI premiums to employers giving young people permanent jobs.

Langille told VICE he's more concerned that only 15 percent of young employees qualify for EI when they lose their jobs. About a third of youth employment is made up by temp jobs, according to a 2015 study by TD Bank.

The budget also revealed the government's plans to increase student grants and change policies around student loans, by bumping up the income level at which grads will have to start paying back loans from $20,200 to $25,000. But Kershaw said there's little new money going into post-secondary, and that the strategy has been instead to tweak existing funds.

"From the standpoint of intergenerational fairness, really tackling problems facing younger Canadians, the prime minister likes to say 'better is always possible' and I would say with respect to his budget that's absolutely right."

Follow Manisha Krishnan on Twitter.