Desjardins's third report in a series on youth in Canada is here. I had the opportunity to sit down with Desjardins economists Jimmy Jean and Randall Bartlett to discuss the challenges and opportunities of generational change.
By Fatima Raza, Youth Reporter for Desjardins
Working Canadians will carry the burden of rising healthcare costs
Canada's aging population means that healthcare costs are set to rise steadily in comparison to the size of the country’s workforce, which will be responsible for covering these costs.
Randall explains that though Canada is fortunate to have a healthcare system that provides universal coverage, one of the biggest challenges is that we fund our healthcare expenses out of current tax revenue.
“That means the burden disproportionately falls on today's workers to make sure we're funding healthcare for older Canadians. Ultimately, there are fewer resources with which to pay for some of the healthcare needs of that generation,” Randall adds.
Business ownership changes will create wealth transfer
The report reveals that many business owners plan to sell (24%) or transfer (21%) their business to family members when they exit the workforce. A significant shift is expected to occur as more than three-quarters of Canadian business owners plan to exit within the next decade. At stake is over $2 trillion worth of business assets.
Jimmy explains that youth today will have the opportunity to acquire these businesses and fill the void left by retiring entrepreneurs.
“When you have a high number of businesses that are going to be for sale going forward, if there is not enough take-up on the part of the younger generation, it means that you're likely to see the pool of businesses start to diminish,” Jimmy says. This would reduce the level of competition in the economy and could be a driver of inflation in the future.
“But it's clear that given just the sheer magnitude of those older generations that are going to be looking to sell their businesses, it might be that some unfortunately are not able to find the succession that would be needed,” Jimmy adds.
The rising level of immigration to Canada is likely to help keep these businesses active. The first youth report revealed that immigrants tend to be more entrepreneurial and, as a result, could help fill the void by taking over existing businesses or creating new ones of their own.
Climate change concerns vary across demographics
The report also explored current perceptions of climate change and shows that three in four Canadians are worried about climate change and its impact, with Quebec being the most concerned (86%), followed by Ontario (75%). Only the rising cost of living and access to quality healthcare outranked climate change and its impact as perceived risks. But when it comes to younger Canadians ages 18 to 34, that number rises to 81%.
Randall highlights that climate anxiety is certainly real and that youth are increasingly concerned about it compared to older generations. “We see that youth are making decisions not just based on things like affordability, but also around climate change,” he says.
Randall emphasizes that there is a sentiment among youth that not enough is being done to mitigate or contend with the implications of climate change. Younger people often feel overlooked in discussions of society's biggest problems, including housing affordability, inflation and climate change.
This is impacting important life decisions for youth as they look to find ways to address climate change individually and reduce their own carbon footprint, including having fewer children, moving to a plant-based diet or buying electric vehicles.
The transition economy is set to create new jobs
Canada's goal to cut greenhouse gas emissions and transition to net-zero by 2050 is expected to create job opportunities in several key sectors and lead to new innovations. However, it will also likely result in job losses in the fossil fuel sector and other resource industries.
“By pressing for innovation, we could end up making discoveries that lead to improvements that accelerate the shift towards net zero,” Randall explains. For example, some greenhouse gas emissions are absorbed by oceans and forests, but there are currently human-made techniques for removing greenhouse gases from industrial processes. In the future, that could also extend to extracting them directly from the atmosphere.
He emphasizes that although we already have paths to help us maintain a sustainable future, there are likely technologies that are still in their infancy or that haven’t been discovered yet and may come to the forefront.
Jimmy highlights areas like AI, engineering and other IT-related fields as key industries to help optimize processes. “We have to think of climate change as not just an opportunity to make the planet more livable, but also as an opportunity to address our long-standing issues with productivity, growth and innovation,” he says.
Accelerating innovation to achieve net-zero
The push to net-zero emissions will require an unparalleled pace of innovation. This includes the commercial use of hydrogen, carbon capture and storage, battery technology for electric vehicles, large-scale energy storage, and lighter, stronger and more conductive materials.
Jimmy says the advantage we have in Canada is that young people in the workforce are not only concerned about climate change, but also want to do their part to make a difference.
“We have all the ingredients to enable a shift, but it won’t happen by magic. It’s going take a lot of effort on the part of governments, private sectors and educational sectors. So it’s really all hands on deck to make sure that young people are able to seize these opportunities, because there are many of them,” he adds.
That’s why Desjardins continues to prioritize supporting youth through its Together For Our Youth program, which invests $50 million annually across over 3,000 initiatives to support their goals and ambitions.
Read the full youth economic report and download the infographic This link will open in a new window..