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Michael Higgins: Carney continues to blame Trump for problems the Liberals created

The fact that many young Canadians can't afford to buy a home or pay for groceries without racking up debt has nothing to do with the trade war

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Young Canadians have never had it so bad in this country, and yet you wouldn’t know it if you listened to the prime minister’s cozy “fireside chat” on Sunday.

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It was Prime Minister Mark Carney who should have done the listening, particularly to his House of Commons finance committee, which a day after his “we are all in this together” platitudes revealed that younger Canadians are increasingly out of it altogether.

Michael Higgins: Carney continues to blame Trump for problems the Liberals created Back to video

Witnesses before the committee painted a picture of cities where young Canadians’ dreams of owning a home are never going to be realized; where a “K” economy has one arm with older people growing ever more prosperous and the other full of younger people stagnating; where the average age of first-time home-buyers in Canada is now 40; and where impecunious Canadians are taking on debt to buy groceries.

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The committee was a depressing, sad and infuriating vignette of life after 11 years of Liberal rule and one year of Carney. Yet, to hear Carney talk on Sunday, one could be forgiven for thinking that all of Canada’s woes are all the fault of U.S. President Donald Trump. And, of course, there was more Davos-style speechifying — the world has never been more divided.

But it’s not Trump and it’s not a divided world that has put young Canadians firmly on the bottom rung of the ladder with no way up. That’s the result of failed Liberal policies, which will never improve if the prime minister insists on sticking his head in the sand.

In his Sunday chat, he briefly touched on younger Canadians saying they were hurting because of past historical crises — the Iraq War, the global financial crisis, COVID “and now this,” again referring to Trump.

As for housing affordability, the Liberals were on it and seeing results, said Carney, pointing to a story about “average asking rents” falling (he failed to mention that the article pointed out that prices are still 14.1 per cent higher than in December 2019.)

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Unfortunately, the three witnesses at the finance committee were also talking about housing affordability, and their testimony was at odds with what Carney said.

Ronald Butler — whose brokerage businesses operates in Alberta, British Columbia and Ontario — said he’s been getting 1,700-2,500 calls a month from people with mortgage issues. “We’re approached to do restructuring, refinancing, change amortization, to lower payments,” he said.

In the 1980s, the average first time home buyer was 27 years old, he said. Last year, they were 40. “So that should be meaningful to everybody in government that we are denying a lot of young people the chance to own a home,” said Butler.

People defaulting on their mortgages has been growing and will continue to grow, he added.

Butler said the biggest change was that “normal salaried people,” such as a part-time nurse or a grocery store production manager, could afford a mortgage 30 years ago, but “those days are gone.”

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Carney used similar words on Sunday. He criticized those who believed “the good old days will come back,” adding, “Hope isn’t a plan and nostalgia is not a strategy.”

Butler disagreed. “I don’t mean to sound nostalgic, but I far preferred the old way, where ordinary people making ordinary wages could go out and buy a home,” he said.

As for things getting better, Butler pointed out some brutal facts, particularly in the Greater Toronto Area.

“We reached a landmark in the GTA last quarter, there were absolutely no condominium starts of any description in the GTA,” he said. “In all of Ontario, with the minor exception of Ottawa, the housing starts, even low-rise housing, not just high-rise housing, have fallen off a cliff.”

Carney likes to boast about Canada leading the G7 in all sorts of economic indicators, but Peter MacKenzie, senior policy analyst at the C.D. Howe Institute, told that committee that Canada is leading the G7 in household debt levels and rising consumer insolvencies.

Particularly hurting are younger Canadians and highly leveraged homeowners in cities like Toronto and Vancouver.

He cited a Bank of Canada survey of consumer expectations, in which Canadians aged 25 to 54 reported a record 27 per cent probability of missing a debt payment.

In that survey, one person told interviewers, “Almost everybody’s living on credit … it’s something that’s going to be detrimental for households.”

Which brings us to Vass Bednar, managing director of the Canadian Shield Institute, a new public policy think-tank, who said that Canadians are increasingly turning to “buy now, pay later” credit strategies.

“This sounds pretty harmless when we’re talking about something like a sofa, a laptop or a one-time emergency purchase. But the concern that we raised and wanted to bring forward is that there’s evidence that buy now, pay later is increasingly being used to bankroll everyday routine needs — groceries, clothes, household goods, other everyday expenses,” she said.

“Buy now, pay later is symptomatic of a deeper prosperity problem. People aren’t using these products because they’re financially careless, they’re using them because the math is not mathing. Paycheques are too low, costs are too high, people are plugging holes.”

Blaming America worked to get Carney elected, but the issue of hard-working younger Canadians who can’t get a home, who are poorer, facing more debt and turning to credit to get groceries, is a made-in-Canada problem — and it was made by the Liberals.

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