Surging home prices, lower earnings burden young Ontarians, study says

Next to British Columbia, Ontario is the second worst economy in Canada for younger generations, according to research from youth advocacy group Generation Squeeze.

"No province reports a decline in full-time earnings [for the typical 25-34 year old] since 2003 except Ontario. That wouldn't be so bad if Ontarians' primary cost of living — housing — was also not going up in price," said the lobby group's founder and University of British Columbia professor Paul Kershaw.

According to the report, the standard of living has deteriorated more dramatically for younger people in Ontario in recent years than anywhere else in the country other than British Columbia.

Apart from the decline in full-time earnings, the report cited other indicators:

More difficult home-ownership – It currently takes 15 years on average to save a 20 per cent down-payment on an average-priced Ontario home

Hard work “pays off less” – Typical younger Ontarians have lost seven years of hard work when measured by the amount of labour required to save for a down payment on an average-priced home

Higher debt – Ontario has the third highest per capita provincial debt level ($22,500) in the country

Early childhood vulnerability – Data show that 35,000 children enter the formal school system in Ontario each year vulnerable in ways that mean they are more likely to fail, go to jail and wind up sick as adults.

Kerhsaw also made 10 recommendations to address these concerns, including the revision of tax policy to slow down the rise of home prices. “Surtaxes on foreign buyers are one option now being trialed by the B.C. government in the Metro Vancouver region. A version of this tax could be extended to Ontario and other parts of Canada.”

“Federal and provincial governments should also consider taxing the capital gains that result from the sale of homes purchased within 24 months. This sort of “speculation tax” could be administered with tax rates that decline over time,” he added.

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