Mike Colledge: Canada's political class needs to work against its own interests

The affordability crisis can only be solved by bringing housing costs down, even if that's bad news for homeowners

By: Mike Colledge

There is a paradox sitting at the centre of modern Canadian life and a challenge at the doorstep for Canadian politicians.

Over the last decade, household wealth in Canada has surged. Between 2010 and 2025, many Canadians became dramatically more asset-wealthy, but you wouldn’t know it talking to them. Over the same period, and particularly in the last five years, these same Canadians became more cash constrained and financially pessimistic. This is because a substantial share of that accumulated wealth is tied up in owner-occupied housing, unavailable for day-to-day living and extremely sensitive to the one policy correction Canada increasingly needs to make.

This paradox is at the centre of the problem facing politicians today, as leaders grapple with the shift from the politics of wealth preservation to the politics of affordability restoration. Simply put, how can Canadians be so rich on their balance sheets, and yet find themselves unable to balance their chequing accounts?

In practical terms, affordability restoration means bringing housing costs and household debt burdens back into closer alignment with incomes, even if that requires slower asset growth, prolonged price stagnation or real declines in housing values. And someone will have to pay for it.

From roughly 2010 to 2025, Canada operated under an implicit political consensus: rising home values were not a problem to solve. Rather, they were evidence of success. Governments at every level became structurally incentivized to protect housing appreciation because it underpinned consumer confidence, household borrowing, retirement security, municipal tax bases and political stability itself. Everyone with a house felt like they were getting rich; those with houses also being the most likely to vote.

The social cost of that model is now difficult to ignore, The byproducts of the wealth-preservation era are affordability collapse and generational divergence. We assumed progress was automatic, and we now know it was anything but.

Ipsos research shows Canadians no longer assume progress is automatic. Large majorities now believe their children face a more frightening future, while many expect younger generations to struggle more with housing, financial security and stability than their parents did.

For most of modern Canadian history, the belief that the next generation would naturally be better off than the last was a structural assumption embedded in Canada’s national identity. That assumption, along with the generational compact beneath it, has now weakened significantly.

But here is what the generational framing and the reflexive “OK Boomer” meme usually misses: the transition will not hurt the people most responsible for the old system. And it may not arrive in time to help the people who need it most today. Instead, the cost may fall disproportionately on a cohort caught precisely in the middle, those too late for the old boom, too early for the reset and too financially exposed to comfortably survive either.

Consider three Canadians.

Jeff is 25. He rents with roommates, carries student debt and treats home ownership as a distant maybe. But Jeff has time. If affordability improves meaningfully over the next fifteen years, through slower price growth, stagnation or real declines, he may still enter the market in his late 30s under materially better conditions. The transition, if it happens, largely works in Jeff’s favour.

Nadia is 38. She did everything right: a good education, career, responsible saving, but is spending her early earning years chasing a housing market growing faster than her income. She is not poor. She is perpetually delayed and enduring. If affordability restoration takes another decade, Nadia may access a more rational housing market in her early 50s. Technically helped. Practically late. She doesn’t have time to catch up, and in almost any scenario, her retirement will be poorer than her parents’.

Then there is Mario. He is 61, not on track to retire comfortably, and he still has a decade or more left on his mortgage. He benefited modestly from rising housing values, but not enough to become financially insulated. He may have refinanced to maintain living standards or help his kids. Today’s affordability challenges have delayed his plans, and potentially, his retirement.

If Canada moves toward affordability restoration between now and 2040, both Mario and Nadia could be squeezed. For Mario, it could weaken asset values at the exact moment he most depends on them, and the retirement horizon would keeps recede. Nadia may finally get into the housing market, but she would have a short runway to retirement and a slow growth housing market that would result in slower wealth accumulation.

Because affordability restoration and wealth preservation are not compatible systems, this is where the politics become difficult. Restoring affordability almost certainly requires some combination of lower asset inflation, higher supply, policy intervention, tax reform or prolonged stagnation in real home prices. But the previous generation’s economic confidence was built on the opposite model and they remain politically powerful. In fact, they’re putting their “elbows up” to protect it.

Every generation unconsciously optimizes institutions around the economic realities it personally experienced. Canada’s decision-makers must design a transition that serves Canadians whose economic reality looks nothing like their own; the question is whether they are capable of doing so.

Canadian MPs cluster in the same life stage as Mario — typically they are late career, asset-heavy, and approaching retirement rather than entry into the housing market. Cabinet ministers skew even older. These are the Canadians writing housing policy, setting tax frameworks, determining supply targets and deciding how aggressively to pursue affordability restoration.

Their formative economic years, the period that shapes instinct, assumption and what feels normal, occurred during the wealth-preservation era. Many own homes that appreciated substantially. Many are within a decade of drawing down the assets they spent their careers accumulating.

The real fault line in Canadian politics over the next two decades may not be Boomers versus Millennials. It may be between protected asset owners and structurally delayed wealth builders. And the most exposed group in that collision is not the oldest or the youngest. It is the cohort in the middle.

Late-stage Boomers, and much of Generation X and the earliest Millennials have more in common than they might think when it comes to affordability concerns, They all (more or less) entered adulthood after the peak decades of broad-based wage growth and during the early stages of housing acceleration and labour-market restructuring. They absorbed repeated recessions, pension erosion, precarious work transitions and escalating housing markets. Some accumulated housing wealth, but later, slower and less than those before them. These “squennials” (squeezed by affordability and between economic eras) did not fully receive the benefits of the old prosperity cycle. But they may also age out before the new affordability cycle arrives.

That is a uniquely combustible form of frustration: people who spent decades trying to reach stability only to discover the economic model changed before they arrived.

The next generation may eventually do better. But if they do, the growing suspicion is that they will do better precisely because one cohort, Mario’s cohort, absorbed the pain of the transition. The evidence suggests people like Mario, the people writing the policies to engineer this transition, lack the personal incentives to absorb the pain themselves.

In short, the people responsible for engineering that transition are largely members of the same cohort.

Their mortgages are being paid down. Their home values compounded for two decades. Their retirement security relies, in significant part, on the asset-growth model that genuine affordability reform would disrupt.

An MP who votes to meaningfully cool housing markets, aggressively expand supply or restructure tax incentives to lower real-estate values is often voting against the interests of their own cohort and, in many cases, against their own household balance sheet. They will face the wrath of voters in their riding who rely on those same interests.

That is a difficult ask of any political class. As a result, policy tends to converge on a managed compromise, an attempt to balance affordability pressures with asset-price stability thus producing a longer, slower, and more incremental transition rather than a decisive reset.

The question is not whether Canadian politicians understand the affordability crisis. Most do. The uncomfortable question is whether the people most positioned to fix it have any compelling personal reason to move faster than the minimum required to manage the optics.

Ipsos has tracked personal financial outlook in Canada for 15 years. In 2010, net optimism sat at plus 30. By 2025, it had fallen to plus 7. That is not a mood. It is a structural erosion of confidence. Slow, persistent and now deeply embedded in how Canadians understand their own economic futures.

The MPs writing housing policy today came of age during the plus-30 era. They built careers, families and balance sheets inside it. The Canadians who will live longest with the consequences of their decisions — Jeff and eventually his children — inherited the plus-7 world instead.

That gap is the distance between the Canada that was designed and the Canada that now exists.

The challenge facing Canada is no longer whether affordability restoration is necessary. It is whether a political system built during the wealth-preservation era can engineer a successful transition away from it, largely counter to their own personal interests. That’s a lot to ask of anyone.

Mike Colledge is Executive Insight Lead at Ipsos Canada

---

The Line is entirely reader and advertiser funded. No federal subsidies, no bailouts. If you value our work, please consider supporting us by subscribing or making a donation. Donations are not subscriptions and do not unlock paywalled content, but they help keep The Line independent

---

To contact The Line with a general inquiry or comment, please email info@readtheline.ca. For other ways to connect with us or to follow us on social media, please see our LinkTree.