Canada has a modest but powerful value proposition—regardless of race or creed, a person’s hard work is rewarded with social mobility. The Government of Canada (GoC) think tank Policy Horizons is warning that the proposition is disappearing, and may be a distant memory in less than two decades. In a report from the agency, they paint a grim picture resembling a dystopian mashup of a Charles Dickens’ novel meets Terminator. A Canada where wealth & the ability to own a home are determined at birth, hungry households hunt & fish for sustenance in cities, and moving down social classes is the norm. Welcome to Canada in 2040.
Rising Inequality To Become A Fundamental Part of Life In Canada
Canada is suffering from a few hiccups that aren’t characteristic of the country most households grew up in. Home ownership is becoming increasingly out of reach, food banks are seeing record use, and the wealth inequality gap is the widest since the country began to measure it. Many Canadians are in denial about the erosion, while others assume it’s a temporary phase that will be corrected at some point.
However, with little being done to change the course (and a lot being done to amplify it), these trends might become the norm.
The internal government report, published in January but only making the spotlight this week, sees the negative emerging trends becoming fundamentals of the Canadian experience.
“In 2040, upward social mobility is almost unheard of in Canada. Hardly anyone believes that they can build a better life for themselves, or their children, through their own efforts… many worry about sliding down the social order,” writes the report’s authors.
Canada’s economy has long been driven by immigration. It manages to attract some of the world’s top talent looking for a quiet and stable life—an often undervalued asset these days. It also manages to retain a lot of homegrown talent with a system that rewards hard work with progress. However, by 2040 this is unlikely to be the case.
The unfair system evolving with limited socioeconomic mobility becomes a liability. Top global talent won’t find the country to be an attractive pitch, and will stop immigrating here. Our domestic talent will seek “greener pastures,” moving to where they see more opportunities.
Fewer households, especially those with high value skills, will shrink the economy. Negative economic growth tends to compound, with the shrinking economy leading to further degrowth for households.
“While this is neither the desired nor the preferred future, Policy Horizons’ strategic foresight suggests it is plausible,” warns the report’s authors.
Canadians Won’t Own A Home, Move Into Higher Social Classes, Or Have Stability Without Intergenerational Wealth
What’s driving this sudden collapse of social order, turning Canada into a country of haves and have-nots? The report attributes this to six trends that will establish themselves as fundamental to the Canadian experience. Those are:
- Property ownership, and by extension wealth, will become concentrated. As young adults abandon the idea of single-family home ownership and embrace rentals, investors will acquire all of the negotiating power potentially leading to sharp rental price increases.
- The devaluation of post-secondary education. Higher education used to land people on the fast track to upwards social mobility. As the premium is eliminated and costs inflate, it no longer yields the same outcomes.
- Intergenerational wealth is perceived as the only way to get ahead, compounding the gap between the rich and poor. Seeing fewer people get ahead despite hard work will result in declining motivation, and yield poorer productivity.
- The narrowing of socioeconomic interaction further puts up walls around class mobility. As more interactions are determined by algorithms, fewer people are able to network or date outside of their class, eliminating “marrying up.”
- Household aspirations collapse. As hard work fails to pay off, people become demotivated. Fewer people pursue the high-risk, high reward opportunities that drive industries such as entrepreneurship and innovation. This becomes a drag on the whole country.
- The value of human labor is devalued as artificial intelligence (AI) takes over. White collared jobs are captured by machines, with the best performing machines costing the most. Consequently, the wealth disparity is amplified even further as those with wealth can buy higher quality productivity.
These trends are all destabilizing to households, leading the economy to “shrink or become less predictable.” If that’s the case, why would policies fail to address them?
Reduced household confidence produces reduced spending. That leads to reduced revenues for companies, and a weaker job market. Investment capital won’t be prevalent across society, but it will concentrate with “wealthy, older people.”
The report warns this will skew national priorities towards bolstering those investments, potentially at the expense of other priorities. Wait. Isn’t this supposed to be a future report, not a description of the current environment?
Canada’s Rising Inequality May Destabilize The Country
Those in the bottom of the order aren’t the only ones that’ll be hit by this collapse in social order. People will try to find the cause of why they aren’t getting ahead, and begin to attack it. They see recent targets like Big Tech and unions falling into their crosshairs, leading to excessive action to regulate or punish those segments.
Scapegoating is common in 2040, with many blaming immigrants for issues they have little to no influence over. A prime target becomes older generations, who benefited from the upward social mobility but then are seen as “shutting the door.”
In extreme cases, the report sees serious social and political conflicts. People may question the state’s legitimacy, resulting in civil disobedience and tax evasion.
Policy Horizons, the report’s author, is a non-partisan department within Canada’s government. It provides foresight for policymakers, emphasizing they aren’t criticizing specific policies or parties. They’re simply highlighting the path we’re on, and it’s up to policymakers to right the course.
Unfortunately, few are willing to acknowledge the existence of these problems. If no one is willing to acknowledge a problem exists, they’re unlikely to address it or fix it.
Then there’s a more troubling thought—this may be exactly the path some policymakers want, and doubling down on the problem and pitching it as a solution is the desired outcome.
2040? This seems like they’re describing 2025, right down to lower classes foraging and fishing for food in the city.
You’re right that thete’s a class of people who pretend it’s not happening to selfishly inflate their home value, failing to understand the minor wealth is short term as opposed to the long term value we were creating a few years ago.
Well, who ever gets elected both parties are pushing for the gov to help stimulate institutions building rental companies.
The CMHC was turned from an organization to help people buy a home into one that helps institutions price you out of one, lending them the cash to turn you into permanent cashflow.
Pierre totally side blinded me on that one. I thought Carney was trying to drum up businesses for pensions and incorporate landlords, then Pierre & Singh are both pitching the same plan.
All roads lead to you funding the destruction of your own future. At least in the short term. Gotta get out of this country, it doesn’t want people who are looking to work hard in exchange for prosperity. It wasn’t perpetual cashflow to exploit with no other options.
When did the Conservatives ever fix a problem for low income peoplee again?
1) The government’s role is not to be a nanny for able-bodied people. Safety net, yes. Nanny, no.
2) The Conservatives aren’t the ones who waged economic war against their own working class citizens by importing 3 million largely low-wage foreigners (if they even *do* work) over a 4-year period.
Well, it is very unfortunate to see how quick the polling number changed in the last few months. It seems like just as quick as flipped the light switch, people forgot the devastating economic caused by the current governing party during the last 9 years and want to give them another chance… repeating same mistake 4 times in a row is not stupid, it is sad. Time for a new government
What’s funny with Conservative supporters right now is that they all think that this started exactly when Trudeau was first elected. As if, for instance, the era of way-too-low interests that fueled our real estate bubble didn’t start under Harper, and only *continued* under Trudeau. People have really short and selective memories.
One would be right to point out that Carney was among the main architects of this bubble, as he was governor of the Bank of Canada back then. But one has to be completely delusional to think that Poilievre is going to correct any of the problems that have developed over the last 2 (not just 1) decades.
Actual change? That’s certainly not something that is offered in this election.
You are right about this way-too-low rates starting before Trudeau came to power. However, importing 3 million foreigners in a very short period and dismantling our own middle class, that’s 100% on the Liberals. You might not like Poilievre but to repeat Einstein’s famous quote, the definition of insanity is doing the same thing over and over again and expecting different results.
I’m more than ready for a change.
Canada has become a Monster eating Her own children.
How the mighty have fallen
When did the Conservatives ever fix a problem for low income people again?
Not sure but would you not agree that low-income Canadians were *vastly* better off under Harper?
Trudeau’s time in office was a massive gift to wealthy speculators.
Actually, the biggest danger for Canada’s future is the continuing march towards a “Capitalism only” philosophy that creates massive divisions between the few elite, entitled citizens and a growing mass of hard-working, patriotic Canadians who are shut out of opportunities. Look south to see the Robber Barons lifestyle that has taken hold there and is destroying not only that country but its entire empire. Strengthen education, strengthen public health care, reduce the gap between wealthy and motivated non-wealthy. Motivate the Canadian government accountable for guiding the country to a land of truly equal opportunity, appreciation for ‘differences’, respect for humans regardless of race, creed or colour and pursue mutually beneficial alliances amongst provinces and like-minded countries. Pay respect to Canadians who pay their taxes and make corporations pay their fair share.
These are the concete changes that will revive uniquely Canadian values and make Canda a desirable place to live!
“Capitalism only” philosophy ?? Are you being serious ? We are being govern by an ultra-socialist entity. Ever thought of how much money is taken off your paycheck, just to redistributed to god knows which government program ?
Capitalism/socialism labels are now pretty much meaningless, unless you really buy in to either extreme. The so-called left and the right don’t seem to realise they agree upon many issues . What we have for decades increasingly experienced under any label is watching our profits privatised offshore, and debt more and more accrued to tax-resident Canadians. Some of our ‘Free-trade’ agreements only look good under a ‘no trade’ situation. Fair trade with wider reach might actually lift all boats.
How is this an article? What value is this kind of unhinged rambling supposed to create?
The article is spot on other than 2040 is already here.
The only thing unhinged is your blind refusal to open your eyes to the reality that is unfolding right before your eyes.
Tell me how someone with kids Vancouver is supposed to scrape together enuf money for a down payment on anything that could support a family whilst paying 4k per month in rent.?
My models show a brighter side which is why I am now bullish Canada in the medium to longer term. Here’s why……
1. As America self destructs and drowns in debt, USD will continue to fall and CAD will gain parity if not get stronger. Already in play…..
2. Strength in CAD will entice foreign nations, sovereign wealth funds and others to treat it as a hard reserve currency for parking excess reserves, thereby providing a strong demand for Canadian bonds. This in turn will make it easier for Canada to raise funds for development and infrastructure. Keep an eye on bond auctions this year.
3. A rising CAD will also reduce inflation and house prices.
4. Drumpf’s tariff wars will cause excess Chinese goods to flood other markets including Canadian. This is deflationary and should provide adequate materials and continuous supply to build Canadian housing.
5. Drumpf’s tariff wars will also destroy demand for shipping containers making it cheaper to ship goods across Atlantic and Pacific. Already in play and good for Canadian exports/imports to markets other than US.
6. A commodity cycle is just turning and a boom in demand will ensure our commodity exports continue to balance out imports keeping the trade deficit in check.
7. Breaking inter and intra province barriers and regulations will ensure the local economy keeps humming. Watch CN stock shoot up as local trade blossoms.
8. Those looking to leave Canada for greener pastures, will be balanced out by those leaving a broken America and wanting to enter Canada along with their capital. Remember, if the grass is greener on the other side for Canadians, then Canadian grass will also be greener for Americans looking to escape a tyrannical dictatorship. A full mad max dystopia is much more likely in US than in Canada. On this front, Canada should make it easier for Americans and firms to move their capital here be providing tax incentives and other perks. Get rid of W8-BEN and other junk forms preventing Americans from opening bank accounts in Canada. Americans have no safe haven left except gold and are desperate to get their money out.
See? No need to be all gloomy. The party has just started and there are multiverse of possibilities going into 2040. Just be united and strong and don’t self destruct before the southern neighbor does.
Disclaimer:
Canadians can also elect a tyrannical and hateful dictator who manages to break up Canada before the US breaks up. Then, no guarantees of course ! It will all be well deserved.
Well put. I’m optimistic overall and excited for our future. The main thing that worries me though is our low birth rate. It’s too low – like many countries – and that’s guaranteed to ruin us if not addressed. So we need to keep immigration flowing and entice people to have more kids to avoid a guaranteed destruction. Just look at South Korea, they’re doomed and facing collapse over the coming decades. 30% population reduction by 2060 with half the population over 65 years old, less than 1 in 10 under 25, and 1 in 100 being children. It’s awful and need to avoid this fate.
Falling birth rates are definitely a concern, however we are not the only ones facing this problem, so it becomes a level playing field.
Social media, video games, wifi/mobile radiation, lack of interest in dating/marriage, ease of divorces, both parents working etc. will continue to hammer birth rates. We control what we can through proper and legal immigration and let the divine winds blow the way they do, whilst also incentivizing having children.
The falling empire will also become a source of rich immigrants. CBSA needs to be properly financed and prepped for a refugee crisis or even a full on zombie invasion on our southern border.
Those moving from Canada to the US are likely to be successful business owners and productive professionals.
Those making the move in the opposite direction are likely to be gender-studies graduates who work in HR.
Guess which group is more valuable to a national economy?
Additionally, despite Trump’s crackdown on mass immigration, I can easily see the US smoothing the path for productive Canadians to relocate. If they really make it easy for highly sought-after workers (both white collar and tradespeople) to immigrate, it’s game over for Canada.
Drumpf will not be smoothing anyone’s path but his own and his rich billionaire buddies.
Who would want to immigrate to a land where visas can be abruptly cancelled and even green card holders can have their b&$ts shipped to El Salvador without due process ?
The only game over is for the old and decaying empire which has now become a liability for the rest of the world including Canada. Shame it did not have to be this way, but the old order is dead and it’s end game is playing out. Stocks, bonds, interest rates, falling USD, real estate, tourism, rising gold, everything is speaking the truth now. Only the deaf don’t want to hear it.
That’s really funny Howard. Stats show a mass exodus of Doctors, Health professionals, Scientists and Tech professionals leaving and applying to leave USA to Canada. These are welcome additions to our economy and unfortunately will be part of the demise of the US empire.
If you keep drinking the MAGA Kool-Aid you reap what you sow.
That’s some major gaslighting there. There is NO stats, I repeat NO stats, showing a mass exodus of US doctors (and Health professionals, Scientists…) to Canada. Just stop it.
Very interesting approach, dear.
How you think to sort out the problem of Canada economy??
90% of canadian export going to USA!!!!
Do I need to draw that on a board, or you understand where lays the problem.??
“90% of Canadian exports go to the US”, you said ???
Even if completely true, that is an unsustainable old world order collapsing before your very eyes. Only the blind are unable to see it.
I have left enough hints in my message above as to how we should take advantage of newer ground realities. America is broken and also broke. Time to look for newer markets. A strong CAD and a weak USD will force the issue of searching for new markets.
The new world order is a choice between US versus the rest of the world (EU, Global South, China). Who do you think we should start trading with ?
Strong CAD, capital flight from US, commodity boom, surplus Chinese goods, cheap container and shipping costs, melting Arctic sea routes, and successful CA bond auctions, is opening up a whole new world of opportunities to take advantage of.
Empires such as “Great Britain”, Soviet Union, Ottomans, Spanish, Rome etc. and now the US will come and go, but the sun will still rise, winds will blow and the birds will still sing…..
Enough of the doom and gloom.
lol
Canada as a country and its citizens are driven through policy not to invest in its businesses and as individuals. Companies are lacking R &D and capital investment. Low productivity workforce. It is painful to watch people head towards the safety net and not want to work overtime to avoid trimming baby bonuses etc. Its a recipe for people and businesses to leave. I do business development in manufacturing. Canadians are slow to respond to inquiries vs Chinese and usa persons. Usa makes it easy to di business. Canada punishes you. Our factory pays a 7k month delivery fee for hydro nothing like that in USA. Many things do not add up. The comments I see in these threads from mainly lib/ndp are why I would not directly push for more factories and further development in Canada.
Commonsense tells us this is happening and the foolish cannot see that the liberal party of Canada is leading the way to this unfair description given
They are to foolish to change their thinking patterns for change,
And this will lead to complete anarchy, fighting violence even for a piece of bread, when this is closely described in the bible, when they will be throwing their gold in the streets for a piece of bread,
This will only get worse because people like you have denied God’s true love and are following your own desires and the beast deceptive influence, originated from the time of Constantine rein changing several laws and commandments that were not supposed to be changed,
People like those who follow not the love god has given will eventually find out the hard way when the messiah returns,
This article, and website, are trash.
This report is not from the Government of Canada, it is meant to portray scenarios to help policy makers plan. Did this website even read the article to the end, where it says:
Disclaimer
Policy Horizons Canada (Policy Horizons) is the Government of Canada’s centre of excellence in foresight. Our mandate is to empower the Government of Canada with a future-oriented mindset and outlook to strengthen decision making. The content of this document does not necessarily represent the views of the Government of Canada, or participating departments and agencies.
The disclaimer literally says it’s the Government of Canada’s foresight department, dumb ss. These reports are used for Privy Council to either choose to address the emerging trends or not.
The Finance Department also empowers the Government of Canada to make its decisions about budgets and spending. By your logic is the King the only member of the Government of Canada, since he’s executing on the advice of the Prime Minister?
Seriously bonkers how crazy some Federal workers get around election time.
AI Overview:
The Canadian Gini index, which measures income inequality, has generally been lower than that of the United States and other G7 countries over the past few decades. While Canada’s Gini index has shown a slight decrease over the last few years, it generally remains relatively stable. The G7, on average, has seen a reduction in the Gini coefficient following the implementation of social safety nets and tax policies.
Gapminder does charts of all kinds of stuff. Watching it plot gini over time, all the way back to 1800, shows we’re now a little bit worse than the ‘golden’ 1950’s… not much, but a little bit. Worth a watch… google if the link doesn’t survive.
https://www.gapminder.org/tools/#$model$markers$bubble$encoding$y$data$concept=gini&space@=geo&=time;;&scale$domain:null&zoomed:null&type:null;;&trail$data$filter$markers$can=1800;;;;;;;;&chart-type=bubbles&url=v2
Always check the stats when reading stuff like this… gapminder is awesome.
It’s true, you should double check the statistics. Like when someone comments on a news piece with a misleading comparison to the Gini Index.
The article you’re commenting on literally links to a report discussing Statistics Canada data explaining the income inequality gap widening to a record. Worth noting SC also began using the top + bottom 40% instead 20% because it shrinks the gap better, the implication being the middle class is only 20% of a country.
https://www150.statcan.gc.ca/n1/daily-quotidien/250414/dq250414a-eng.pdf
A record going all the way back to 1972. I guess I’m old… doesn’t seem that long ago. Well, there’s also the lag in gini data so it might be a little worse. Of course, back in ’72 was when the Liberals changed the national housing program to mass-build public housing and the gini dropped back down. Kind of like what Carnie is campaigning on now. We’ll set aside that housing affordability hit it’s worst in the early ’80s (yes, worse than now). Not sure if those 2 things correlate, but I guess we’ll find out.
As for Stats Can changing how they do their thing… I guess you could interpret it as trying to keep output relevant in a changing world, or they’re skewing the numbers for some (conspiratorial?) reason. I have a lot of respect for Stats Can’s work.
Oh, and back in ’72, the gini index in Canada was almost as bad as the US. It’s nowhere near as bad now. The US is actually hitting Depression era levels.
Social spending (i.e. the Nanny State) is at an all time high as is the debt that accompanies socialism yet here we are – declining living standards, few opportunities for my children (forget home ownership), inflation, bloated bureaucracies, the smart ones leaving for the U.S.
How dare some of you say this has nothing to do with the current ruling party. I am sickened by the idea that this liberal party may win yet another election. They don’t even deserve official party status. Well, I suppose the people get the government they deserve. Canada might not make it at this rate. Might as well merge with the U.S. sooner than later.