Trudeau delivers ‘Gen Z budget’

OTTAWA — Canada’s finance minister, Chrystia Freeland, delivered a federal budget Tuesday aimed squarely at financially anxious millennial and Gen Z voters, stuffed with measures aimed at the affordability of housing and raising children.

The move is part of Prime Minister Justin Trudeau’s aggressive play to win back the young voters who swept him into office nine years ago but have abandoned him since.

The half-trillion-dollar budget included C$8.5 billion for homebuilding and affordable housing, C$1 billion for a national school food program, another C$1 billion for student grants and interest-free loans, and C$200 million for expanded child care.

"Millennial and Gen Z Canadians can get a good job, they can work hard, they can do everything their parents did and more, and too often the reward remains out of reach," Freeland said in a speech to the House of Commons. "They look at their parents’ lives and wonder: How will I ever be able to afford that?"

During a three-week cross-country roadshow ahead of the budget, Trudeau and Freeland rolled out a drumbeat of preview announcements aimed squarely at their target generations, with whom the Liberals are currently polling in third place, behind the Conservative party and the progressive New Democratic Party. The pair toured daycare centers, elementary schools, pharmacies and construction sites in electorally important cities including Vancouver, Calgary, Winnipeg, Toronto, Montreal and Halifax.

They promised C$6 billion for water and waste infrastructure essential in new housing construction. Provinces can only access the money if they agree to certain conditions, including denser neighborhoods and more "climate-friendly" housing.

The Liberals also pledged C$1 billion over five years for a national school food program that "will launch with a target of providing meals to 400,000 more kids every year."

Even a C$2.4 billion spending package meant to jolt Canada's AI sector was targeted at younger voters yearning for "good-paying opportunities that help them get ahead."

The Liberals plan to pay for those expensive promises by clawing back more than C$19 billion over five years on capital gains over C$250,000 accrued by some of the wealthiest Canadians. The Finance Ministry’s budget documents calculate that the measure targets only the top 0.13 percent of earners.

Freeland's Tuesday speech concluded with a vow to anxious youth: "Today we say to our younger generations, and to those who care about them: We are putting the power of government to work for you."

Losing the youth vote

When the youthful Trudeau swept into office in 2015, he wooed young voters with the promise of legalizing marijuana and making radical changes to the way Canadians vote. (He delivered on the first one but abandoned the second.)

Back in 2015, the numbers were staggering. Fifty-nine percent of voters aged 18-24 cast a ballot that year, up 18 points from the previous election. Abacus Data reported at the time that Liberals scooped up 45 percent of them.

The Liberals are now bleeding those voters badly.

On the heels of a punishing pandemic, sky-high interest rates have spiked mortgage payments for millennials who snuck into the market — and pushed homeownership out of reach for younger families eager to enter it. Persistent inflation has young parents staring down high grocery bills that aren't coming down.

Last summer, as ascendant Conservative Leader Pierre Poilievre promised lower taxes and bigger paychecks, young people appeared to be listening.

By the end of August, Poilievre had won many of them over.

Trudeau's Liberals now wallow in third place at 23 percent, by Abacus' measure. Thirty-three percent of voters aged 18-34 supported the Conservatives. Twenty-six percent sided with Jagmeet Singh's left-wing New Democratic Party.

"Whether or not the Liberals can win them back remains to be seen, but well over 40 percent of eligible voters can be classified as Millennial or Gen Z," said Dan Arnold, Trudeau's top pollster for seven years. Even if they don't go to the polls as much as their parents, he said, "that’s a lot of votes to write off completely."

Now chief strategy officer at Pollara Strategic Insights, Arnold has tracked rising anger among younger voters, "driven primarily by frustration with the post-Covid economy and the realization by many that they won’t approach the quality of life of their parents’ generation."

Youth dissatisfaction with the Liberals predates the pandemic, he said.

"I remember giving presentations to caucus in the lead-up to the 2019 campaign showing that we were losing them, and indeed, they were a weaker-than-average voting group for the Liberals that year. By 2021, they were the Liberals’ weakest age demo," Arnold said.

Provincial tensions

The new budget is expected to be adopted swiftly by the Canadian Parliament. However, many of the measures require cooperation from provinces, which administer most housing, health care and education programs within their borders.

Some provincial premiers are fuming that the Liberals are intentionally blurring those jurisdictional lines — and accusing Trudeau of federal fiscal overreach.

Alberta Premier Danielle Smith, a populist conservative and constant thorn in Trudeau's side, has vowed to block Ottawa's direct housing negotiations with municipalities. Smith has introduced legislation that would force the federal government to do deals with the province, not one-offs with cities.

"We're prepared to take [Ottawa] to court. They cannot be using their federal spending power in asymmetric federalism," Smith recently told CBC News. "We will not stand by while they continue to treat Alberta municipalities unfairly."

The thinking in Ottawa is voters don't fuss over constitutional responsibilities.

Labor Minister Seamus O'Regan, one of the federal Cabinet's go-to communicators, put it bluntly in a pre-budget video on housing measures: "You don’t care what government does what," he said. "You just want us to work together and get it done."

The budget was also notable for what it didn't deliver: tax cuts and less red tape for corporate Canada. The budget also increased defense spending by $C8.1 billion but still failed to reach 2 percent of GDP, a NATO target that allies are expected to pony up for military readiness.

Robin Guy, a vice president at the Canadian Chamber of Commerce that represents thousands of large and small companies, implored the federal government to cut taxes and regulations in order to "let business do business."

"The inefficiencies and higher costs of all the new red tape Ottawa keeps generating are ultimately passed on to consumers, fueling the inflation the government says it wants to help fight," Guy wrote in the Financial Post Tuesday morning.