Is Canada Strong?
- Sam Burke
- 6 days ago
- 4 min read
Overview
The weakened Canadian economy has impacted the lives and financial positions of many Canadians, but young Canadians, such as undergraduate students, seem to feel a disproportionate amount of these impacts. The language used in the recent Canadian federal budget suggests that the sitting government is certainly aware that there are a lot of economic problems that Canadians are facing. The politics surrounding whether the budget would be passed or voted down dominated national headlines for multiple weeks, but, political ramifications aside, this budget can mean the difference between setting up young Canadians for financial stability or plunging them even deeper into the pit. This begs the question - how will this budget affect the younger generation?
The Budget’s Effect on Housing
The budget allocates “$130 billion in total federal housing commitments over five years” (Government of Canada, 2025), which is clearly a large investment to try and combat the housing crisis Canadians are far too familiar with. However, critics of the budget question the effectiveness of the investment. In a recent media release, the Building Industry and Land Development Association (BILD) stated, “What was once a promise to deliver 500,000 new homes annually has now become a plan that will cost 100,000 jobs.” (BILD, 2025). The layoffs that the Building Industry and Land Development Association are referring to come as a result of development charges, which increase the overall cost of home building leading to reduced demand for labor.
For first time home buyers, the budget promises to eliminate federal GST on homes up to $1 million, and reduce it on homes valued between $1 million and $1.5 million. Included in the budget it says that this will “[Help] bring down the costs of a newly built home—immediately making the goal of home ownership a reality for more Canadians, especially young families” (Government of Canada, 2025). This could be very good news for young Canadians and Canadian undergraduate students that are currently considering how affordable buying a home and living in Canada will be in the future.
The Deficit
The budget plans on admittedly high levels of spending, which means that Canada's national debt will continue to grow. The office of the Parliamentary Budget Officer (PBO) said that “Finance Canada projects the federal debt-to-GDP ratio to increase from 41.2 per cent in 2024‑25 and remain slightly above 43.0 per cent over 2026‑27 to 2029‑30.”, meaning for the foreseeable future we can expect the national debt to grow at a higher rate than the country's gross domestic product (PBO, 2025). This shift from trying to lower the national debt to embracing its growth has caused concern for a lot of people as to what it may mean for the future of young Canadians. The higher interest rates that will have to be paid and the potential cuts to social services could be a serious burden that young Canadians will have to bear in the future in order to afford this investment for older generations right now. Critics of the budget at the Canadian Taxpayers Federation (CTF) have pointed out that the interest on the national debt will have to be paid using all of the federal GST payments made by Canadians (CTF, 2025). Whether or not the benefits of the investments made right now will help young Canadians get ahead or not remains unclear, but it is abundantly clear that as we move forward, this debt is coming with us for years to come.
Student Financial Aid
Although the budget does not state it explicitly, many experts have warned that student access to financial aid will likely be reduced. The Canadian Student Grant (CSG), which is a grant for low to middle income students in Canada, seems to have no money allocated in the budget for previously planned increases. Alex Usher, president of Higher Education Strategy Associates, bluntly stated, "School's going to suck for more students," going on to say that the understood reduction is going to cause many students currently relying on these grants to go into or fall deeper into financial debt (Usher, 2025).
Youth Unemployment
Youth unemployment has garnered a lot of discussion in recent months, as the rate has steadily increased to over 14% - the highest it has been in more than a decade (excluding Covid-19 related unemployment) (CBC, 2025). Before the budget was tabled, Finance Minister François-Philippe Champagne said, “To the youth, this budget was made for you,” and the budget certainly uses language that would suggest that it is aimed to help bring youth unemployment down. It states, “To invest in a robust and adaptable workforce, the government is making investments to support about 175,000 youth in 2026-27” (Government of Canada, 2025). Later in the budget, it suggests that short term improvement to unemployment may soon be visible, as they will “provide $594.7 million over two years, starting in 2026-27, to Employment and Social Development Canada for Canada Summer Jobs to support around 100,000 summer jobs in summer 2026” (Government of Canada, 2025).
Although this investment may result in direct short term results, it is not without criticism. Mikaela McQuade, partner in the economics and policy practice at PwC Canada, has said the anxiety surrounding the job insecurity of Canadian youth is not limited to summer jobs. This suggests that job security is going to continue to be a long term issue for the current generation of young Canadians (McQuade, 2025).
Conclusion
With the complex economic landscape Canada finds itself in, young Canadians will be the first to feel the negative effects that a poor performing economy may have. The Canadian budget certainly uses language that suggests it is a serious goal of the current administration to get young Canadians back on the right track. With very high levels of investment into things like housing and infrastructure, along with large cuts to the budgets of many government departments, it is unclear whether or not a better performing economy will come as a result. What is certain is that the consequences of today's aggressive spending will stay with young Canadians for years to come.
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