What did the 2025 budget deliver for generation Z and millennial Canadians?
Younger Canadians have been struggling with a host of economic issues, from unemployment to cost of living increases and unaffordable housing. Prime Minister Mark Carney’s government unveiled its first federal budget on Tuesday, which proposed billions of dollars aimed at programs easing Canadians’ financial burdens and shoring up an economy battered by a trade war in “a generational investment strategy.” But younger generations may be wondering what exactly the budget offers them. The Financial Post’s Serah Louis and Jane Switzer break down the initiatives that affect millennial and generation Z Canadians the most.
Can budget measures relieve the rising cost-of-living burden for younger Canadians?
Canadians of all ages have been struggling with the rising costs of everyday items — the consumer price index climbed 2.4 per cent in September, with food purchased from stores rising by four per cent.
However, there were few new measures in the budget that directly addressed this issue.
One of the initiatives aimed at providing relief on expenses is a review of fees charged by banks and other federally regulated financial institutions, such as Interac eTransfer fees and ATM fees, with an update to come in 2026.
Previously announced commitments that were not specific to younger Canadians but were reiterated in the budget included tax changes for middle-income consumers and the removal of the carbon tax.
André Côté, interim executive director at Toronto Metropolitan University’s public policy think tank, The Dais, said existing programs, such as the Canada-wide Early Learning and Child Care, which the budget proposed to maintain, would help families with children. The budget reiterated an earlier announcement making the National School Food Program permanent with its current $1 billion investment over five years. This would particularly benefit young parents and families, he said.
The government projects Canada child benefit payments will increase 5.2 per cent to $30.1 billion next year, as these benefits are indexed to consumer price inflation. Payments are expected to grow at an average 2.7 per cent rate each year.
Paul Kershaw, professor at the University of British Columbia and founder of Generation Squeeze, a think-tank that focuses on generational fairness, said he did not see measures in the budget to address a generational imbalance in funding priorities.
Kershaw compared existing program funding for Old Age Security , which is now on track to rise by $28 billion by 2029, with other commitments that affect younger Canadians. For instance, already announced new housing measures are set to grow by just $1.6 billion over the same period, pending renewal of the National Housing Strategy. Similarly, existing post-secondary education funding is set to increase by just $1.9 billion, youth employment by less than $1 billion, childcare by $2.9 billion and business tax incentives by $3.2 billion, he said.
“There’s no doubt this government wants to make generational investments and things that matter for younger people … but the actual dollars tell a very different story, and the generation that’s actually getting the most growth in spending is much later in their life course,” Kershaw said.
Can budget measures relieve the cost of homeownership?
Many of the budget’s housing measures, such as eliminating the goods and services tax for first-time buyers on homes at or under $1 million and launching the Build Canada Homes agency, were already announced. But the combination of incentives and supply stimulus could help out first-time homebuyers , according to one real estate executive.
A centrepiece of the Liberals’ housing plan is Build Canada Homes, a new federal agency first announced in September with a mandate that includes building community and co-op housing for low-income households and increasing the supply of affordable homes for the middle class. The budget reiterates a five-year commitment of $13 billion.
Phil Soper, chief executive officer of real estate brokerage Royal LePage, said Build Canada Homes is “the most detailed vision” the country has seen in the past 20 years for tackling the housing affordability problem.
“If they can continue to add supply through stimulus to the private sector and what they do directly, it could keep home prices below the rate of wage and salary inflation for a few more years and give people a chance to catch up.”
However, Soper said demand-side policies such as the elimination of the GST for first-time homebuyers on new homes under $1 million, which was first announced in March and included in the budget, can attract more people to a market where there aren’t enough homes.
“If we’re building enough homes and home prices are rising modestly at three or four per cent a year and then you add incentives for a specific target group, say first-time homebuyers, then things work out beautifully,” he said. “But if you’re not building the new homes and you’re just putting incentives in front of people, you’re shooting yourself in the foot.”
The federal government likely will not meet its goal of doubling the current rate of residential construction over the next decade due to market conditions, said Robert Kavcic, senior economist at BMO Capital Markets. One reason is that Canada does not have the capacity to double the rate of construction activity relative to what we have now, he said.
“The other aspect is that when demand falls off, supply tends to fall, and what you’re seeing out there on the ground today is very little new home sales activity, which is ultimately going to pass through to lower construction activity down the road,” he said.
In other words, there may not be enough supply to spur homeownership among millennials and gen Z, whose rates of homeownership are dropping , according to a recent Re/Max Canada poll.
Will budget commitments support more jobs for young Canadians?
Younger Canadians have been bearing the brunt of reduced hiring in many sectors of the economy, reflected in a higher youth unemployment rate. As of September, the national unemployment rate among all Canadians was 7.1 per cent, but more than double that for those aged 15 to 24, at 14.7 per cent, according to Statistics Canada. This marked the highest unemployment rate for youth since September 2010, excluding 2020 and 2021, during the COVID-19 pandemic.
The budget included a few programs to support jobs for youth, which, if approved, would be implemented starting as soon as next year.
It proposed providing $594.7 million over two years, starting in the 2026-27 fiscal year, to Employment and Social Development Canada to support about 100,000 jobs through Canada Summer Jobs in summer 2026. It also proposed another $307.9 million to go toward employment, training and “wraparound supports,” which would include mentorship, transportation and mental health counselling, to about 20,000 youth facing employment barriers each year, over the next two years.
About $635 million would be allocated to Employment and Social Development Canada to support 55,000 work placement opportunities for post-secondary students and $40 million for a Youth Climate Corps, to provide paid skills training for young Canadians to respond to climate emergencies.
But these programs may not make a “dramatic difference” in reducing the youth unemployment rate amid a relatively inhospitable labour market, said Côté of The Dais think-tank.
Youth and early career professionals are likely seeking longer term opportunities than one-off job or training placements, said Mikaela McQuade, partner in the economics and policy practice at PricewaterhouseCoopers Canada.
“Their job anxiety isn’t necessarily limited to summer jobs,” she said. “This is a long-term concern about not only their place in the current economy, but as we evolve into a digital and an intelligent economy, what impact AI could have on their job prospects from there.”
The federal government said it would invest $1.3 billion over the next five years toward artificial intelligence and quantum technologies infrastructure but McQuade said it is unclear to what degree the deployment of AI could affect the labour market.
Matthew Hutchens, a tax partner at RSM Canada, noted that although there were few details regarding the $51 billion commitment toward the Build Communities Strong Fund, aimed at financing infrastructure such as roads, this could signal potential job opportunities for younger Canadians as well, particularly in the resource sector.
Can young Canadians benefit from budget promises on open banking?
The budget promises to advance open banking and finalize consumer-driven banking legislation, which will allow individuals and businesses to share financial data with third-party financial technology companies. This, experts say, may spur competition and help consumers save money. Younger Canadians are more likely to adopt digital financial tools and say they are looking for more options in financial services, surveys have indicated.
Dan Broten, senior vice-president and head of EQ Bank, the digital banking platform of Equitable Bank, said the government’s commitment to advancing open banking and modernizing payment infrastructure through the upcoming Real-Time Rail payment system are both “pro-competition areas” that young people may gain from in the future.
“More competition here really helps customers get the absolute best products in the market, and that’s going to keep more in their pockets,” he said. “In a time like this, they need a lot more control of their financials but also help to earn and retain as much as possible.”
Vass Bednar, managing director of the Canadian SHIELD Institute think-tank, said the government’s intention to delegate oversight of the Consumer-Driven Banking Act to the Bank of Canada “more clearly signals that open banking is part of the ‘capital B’ banking system.”
Bednar said while the premise of interoperability and more autonomy are good for consumers, it remains to be seen what open banking will truly do for people.
“Personally, I’m not totally convinced that open banking is as pro-consumer as everyone says it is. I do think it’s a way for other companies to access our banking data and data-hungry companies that want to train AI, that want to profile us, that want to know a lot about us.”
• Email: slouis@postmedia.com
• Email: jswitzer@postmedia.com