Three generations in Ontario face major financial burdens

Three generations in the GTA are facing complex and seemingly inescapable financial burdens.

Last week, the Bank of Canada (BoC) stated that the benchmark interest rate will remain at 2.25 percent, with the caveat that the future remains highly uncertain.

Geopolitical rumblings are likely to shape the future of Canadian affordability, including the conflict with Iran, energy costs, and the upcoming review of the Canada-U.S.-Mexico trade agreement. However, here at home, more pressing concerns linger.

Three key demographics — Gen Z workers, millennial parents, and downsizing retirees — have had to contend with a hostile economic climate as the months have progressed, further stretching plans, promises, and hopes for the future to their breaking point.

As a result, economic players helping those left behind — a majority of GTA residents — have been detailing key issues and what little can be done to stave off personal economic collapse while the global economy (maybe) course corrects.

Doomed Zoomers

Economic stressors on the youngest working generation have been no secret, as countless data points have shown a youth employment crisis, all while struggling to even cover rent in the GTA, with home ownership remaining a pipe dream.

As if things weren’t hard enough for Gen Z (14 to 29-year-olds), recent data released by KOHO, a digital financial platform, showed that once monthly expenses are taken care of, only $9 to $16 in spendable income is left over from zoomer paycheques.

Combine this with a provincial youth unemployment rate of over 14 per cent, and the majority of the GTA’s burgeoning professionals have been left rudderless when attaining a passable quality of life.

“The recent Ontario budget focuses more on long-term growth, and has very little to do with immediate relief for individuals. Lump in rising oil prices, what is going on overseas, rising costs and no rising income, and things remain incredibly volatile for Gen Z,” Faye Lucas, senior director of legal and customer trust at KOHO, told INsauga.com.

Lucas went on to note that many young people in the GTA are working multiple jobs (if they can find them), but it still doesn’t leave them remotely stable. This lack of progress — and borderline stagnation — is being felt across Canada, but is at its worst here in southern Ontario.

Based on KOHO’s data, 41 per cent of Gen Z respondents stated they are treading water when managing living costs, while 29 per cent bluntly said that they are drowning.

These numbers tie into employment standards, with 41 per cent of Gen Zs registering as employed, and 19 per cent (one in five) stating they are unemployed and struggling to find work.

Coast to coast, based on KOHO’s data, the average monthly income for a Gen Z Canadian — as of now — is $1,083.

According to data from Realtor.ca, the monthly rent for the average one-bedroom apartment in the GTA (Toronto, Mississauga, Brampton, Hamilton, etc.) ranges from $2,300 to $2,500, while studio apartments range from $1,600 to $1,900, pricing out Gen Z from a livable rental reality.

“There is a change in expectations, especially when compared to, say, the generation that our parents come from. Back then, it was to go in humble and work hard, but now, it’s a breaking point, where no one can really afford what even the minimum expectations for their future are,” says Lucas.

In terms of what a limited piggy bank is covering for the youngest, brightest, and brokest, 71 per cent of income is covering the bare essentials (food, bills, rent), while roughly 55 per cent, when applicable, is going to managing debt (student loans, credit cards, and lines of credit).

When balancing the books, it comes as no surprise that after all is said and done, zoomers in the GTA don’t even have $20 in their pocket after covering monthly costs.

Lucas notes that financial institutions that work hand in hand with young Canadians can only do so much, stating, “50 per cent of folks living in Canada are living paycheque to paycheque; there needs to be support, a formal change maker from the province, until then, people need to grasp their financial situation.”

While zoomers struggle with feeding themselves, the next step down the generational ladder is having to contend with mouths to feed that aren’t their own.

Millennial Mums (and Dads)

No one said being a parent is easy, and if you are trying to be one in the GTA, statistically, you enjoy a challenge.

For millennials (ages 30 to 45), the prospect of becoming a parent in the current economic climate may seem less than ideal. However, many throughout the southern Ontario sprawl are opting to do so, despite tough odds.

A recent survey from Embark — a savings and education platform — has shown that nationally, over 50 per cent of new parents are not nearly as prepared as they would like to be for the financial burdens of parenthood. Shifting the lens to Ontario, the number reaches almost 70 per cent, laying a foundation for a generation of parents facing a lifetime of scrambling to make ends meet.

As a result, numerous new parents have stated that they have planned around receiving outside support.

Embark’s data showed that one in three new parents (40 per cent) receive help from family, with 21 per cent acquiring a one-time lump sum, and 16 per cent stating they have ongoing financial support.

However, for those who don’t have parental pockets to rely on, raising a kid in the GTA comes with a new standard of sacrifice.

“Over the last few years, we have done a lot of surveys, one of the key takeaways that consistently keeps coming back is that parents are willing to sacrifice their own financial well-being to ensure that their kids are okay,” Andrew Lo, CEO of Embark, told INsauga.com.

Even with financial stressors dominating the day-to-day, other variables that come with starting a family, such as sleep loss and exhaustion, still hold a firm spot on the podium regarding the data.

However, when Embark’s survey asked new moms and dads whether they would take a week of uninterrupted sleep or $5,000 on the spot, 84 per cent of respondents took the money.

“It’s not surprising, mostly everyone out there are having a tough time when it comes to budgeting, groceries and paying down their mortgage,” says Lo.

When asked what they would do with a sudden windfall of only $2,500, the majority of respondents said they would pay down debts rather than purchase essentials for a new baby.

To better reach a Millennial audience on financial assistance, such as a Registered Education Savings Plan (RESP), Embark has been surveying young parents on financial literacy, while also engaging the middle generation on their home turf.

“We try to engage all the modern channels parents are looking at, this includes TikTok, Instagram, and even training AI,” says Lo.

Based on the core numbers within Embark’s survey, out of Gen Z, millennial, and Gen X parents, millennials lead the charge in terms of relying on modern tech for parenting advice, with 35 per cent turning to social media and 22 per cent using AI chatbots.

Despite incentives to better educate parents via modern platforms, Embark’s numbers showed that while 35 per cent of Canadian parents feel they are prepared to manage their child’s educational expenses, 28 per cent feel in no way prepared for those financial burdens.

While being cash-strapped has fallen to younger generations, those trying to exit into the promise of retirement are being stonewalled in ways that stack the stressors for Millennials and Gen Z.

(Fool’s) Golden Years

Following the bouncing ball of ‘intergenerational support’ to its source, retirees in the GTA, some of whom are saddled with supporting two generations, are facing their own economic reckoning.

Downsizing — for the last several decades — has often been viewed as the final step in the long journey of managing equity and savings, with new retirees flipping their homes, getting some financial padding, and finding a condo or smaller home to ride out their retirement.

However, given the cracked landscape of Canadian economics, downsizing is not the sunset many were promised to ride off into.

According to the 2025 Aging & Affordability Insights Benchmark Report from watchdogs at Bloom Finance, 76 per cent of Canadian seniors have stated that assisting multiple branches of their family tree has impacted their retirement savings.

One in three retirees, according to the data, also serves as a key financial fixture for their children and grandchildren, beyond just the odd bit of help here and there. Tie this to the playing field, where home values are depreciating, and decades of planning by Canadian retirees have become moot.

“Canada-wide, home values are down about 20 per cent; here in the GTA and its suburbs, it’s even worse at 30 per cent. People’s homes are worth a lot less than what they’ve mentally indexed themselves for — there’s way less money to be unlocked there,” Ben McCabe, CEO of Bloom Finance, told INsauga.com.

Family support and lack of equity only further cascade when downsizing, as McCabe adds, that if the average GTA retiree were to consider the plunge given current market standards, they still have to contend with realtor fees, land transfer taxes, moving expenses, renovation costs and more.

The hostility of the housing market also functions as a cruel pendulum, as, beyond subsidizing the finances of their children or grandchildren, those who cannot afford to do so, but still want to help, opt to have their kids or grandkids live with them, greatly putting a halt to any plans to sell a house.

“It’s already so hard for young people to manage housing of any kind right now, let alone get into the housing market, so they are moving back in with their parents. Thai makes downsizing nearly impossible, as those bedrooms are being used by either one generation or two,” says McCabe.

As a result, Bloom’s data shows that both Canadian — and by extension — retirees in the GTA are planning to make some serious changes, with 61 per cent of respondents stating they are going to cut back on spending, 29 per cent halting further financial support to family, and 19 per cent indicating they have no idea what to do.

Combine this with the lack of return on investment when selling their home, and it comes as no surprise that 55 per cent of retired Canadians have stated their retirement savings will likely dry out as cost-of-living standards continue to rise.

While McCabe does mention a glimmer of hope, stating that within the next handful of years the seller’s market could return, as long as generations down the line are struggling, financial support or the need to live in the family home will be the new standard.

“It costs 10 to 12 times as much as it did in the last generation to enter the housing market in Canada,” says McCabe. “We actually calculated what the average Canadian, on the average Canadian salary, would need to save to enter the Toronto housing market — it would take roughly 29 to 35 years to just get a down payment.”

As a result, parental sacrifice trickles into the proverbial golden years, as those without generational wealth are taking out reverse mortgages on their homes to create a living inheritance for younger generations.

McCabe further relates that, at the cost of any hope of downsizing soon, retirees are doing this to give their kids the fighting chance that they were told their salaries would give them, and in turn, get them out of the house so they can sell when (and if) the market stabilizes.

“A lot of folks are thinking that way because they don’t want to have to face a reality that the only people who can enter the housing market are people with rich parents, or those with large portfolios that can be liquidated for their kids,” says McCabe.

However, even then, with so many moving pieces — spanning three generations — McCabe says, “It will take a long time for things to get back to the way they are supposed to be, years, which is tough because people anchored their expectations on this.