Canada is failing Gen-Z: Feeling betrayed, they’re looking elsewhere for opportunity
If you plan on being a winner, should you stay in Canada?
This is a genuine question for all my fellow Gen-Zers.
And the sad truth is we’re starting to believe the answer is no. If you want to be a winner – someone who bets big, takes risks, and reaps the reward – Canada is looking less and less like the place to be.
Ottawa’s decision to raise the capital gains tax inclusion rate to 66.7 percent is bad news for all current and budding entrepreneurs. In fact, it’s bad news for anyone who aspires to a higher standard of living.
This announcement came amid a mudslide of alarming economic metrics. The Trudeau government has presided over abysmal growth numbers, weak investment, and, most importantly, sluggish productivity.
 Photo by Edward Howell |
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In March, the deputy governor of the Bank of Canada, Carolyn Rogers, declared a “productivity emergency,” noting that “Canada has seen no productivity growth in recent years.”
Productivity is profit. For a worker, it’s the value they create. It is the main driver of economic growth.
A Canadian worker produces US$53.30 per hour, while an American worker produces US$72.10. Lower hourly productivity results in lower wages for workers. If we closed this gap with our southern neighbours, a Canadian working full-time would raise their living standards by $31,584 annually.
The problem is that Canada is not attracting the private investment that its workers need, which includes cutting-edge technology and machinery.
In 2018, private investment was only $17,389 per Canadian worker, compared to $27,307 per American worker.
Much of this is the result of government policies that scare investment away. Overall business investment has dropped 7.3 percent since 2014. Trudeau’s tax increase risks slowing productivity growth even further.
Instead, we desperately need policies that create a “more friendly business environment,” to quote Rogers. What we need are tax breaks to encourage investment.
At present, young Canadians wanting to create start-ups likely can’t find the venture capital to do so.
We ought to take this personally. Thanks to our government’s poorly designed policy, we lack access to the tools we need to succeed. Investors don’t think we’re worth the risk.
And it’s not for lack of trying! Canadians are among the best educated in the G7. In 2019, 73 percent of Canadians aged 25 to 34 had a postsecondary degree. But despite an educated workforce, we still struggle to attract investment. Canadians rank second to last in the G7 in terms of productivity per hour worked.
Less productivity translates into a lower standard of living. Canadian GDP per capita is back down to 2014 levels; this means that, when considering inflation, Canadians are no better off than they were a decade ago.
Not to mention that if you do make a good living, Canada’s progressive income tax system will ensure you hardly notice. Marginal tax rates in all Canadian provinces are higher than those in every American state.
The result is a generation forced to delay many of life’s big moments. Statistics Canada reported that in 2022, 38 percent of Canadians aged 20 to 29 could not see themselves being able to afford to have a child in the next three years. Many young non-homeowners have given up on the prospect of ever owning a home.
Without urgent action, Canada is projected to have the worst growth over the next few decades among 38 advanced economies.
As a growing voting bloc, if we young Canadians don’t prioritize policies that attract the investment needed to be competitive, we will have two choices: resign ourselves to a quality of life worse than our parents or pack up and head for greener pastures.
Samantha Dagres is a Communications Advisor for the Montreal Economic Institute. She holds a BA in Philosophy from McGill University and a Juris Doctor (JD) from the University of Montreal.
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