Pierre Poilievre’s recent speech to the Greater Vancouver Board of Trade has received significant attention for its attack on lobbyists and the corporate class in Ottawa. But notwithstanding the subsequent commentary, it may not even be the most notable part of his remarks. 

In the same breath, Poilievre proclaimed that, as prime minister, his “daily obsession will be about what is good for the working-class people of this country.” There’s a strong possibility that this vow is more consequential in terms of influencing a Poilievre-led government’s policy agenda and ultimately reshaping Canadian politics. It holds out the potential for a new multi-ethnic conservative coalition rooted in working-class values that could transform the country’s political landscape. 

One of us will return to its possible political consequences in a subsequent commentary later this week. But any discussion of a working-class conservatism must begin with a clear understanding of who the working class actually is—where they live, what they do, how they came to join the working class, and what policies will help them flourish in the modern economy. 

Canada’s modern working class is not necessarily who readers might think it is, according to research that we’ve conducted for the Cardus Institute. Using a common definition of the working class as the population of workers in jobs that typically don’t require postsecondary education, we found that there’s a big gap between the common stereotype—white, male, blue-collar workers in the auto sector or some other form of manufacturing employment—and today’s working-class experience. 

The evolution of Canada’s working class

Here are some facts.

For most of recent history, women have actually composed more than half of the working class. 

Over the last thirty years, manufacturing jobs have constituted a declining share of working-class employment. This is true even among men, for whom manufacturing employment went from a high of 20 percent of working-class jobs to only 13 percent today. Among women, manufacturing represents only 6 percent of working-class jobs.

Conversely, jobs in sales and services have grown significantly over the same time period. Today, almost half of the working class is employed in these jobs. Among working-class women, it’s more than half.

The trades continue to be an important part of working-class employment, but not as much as one might think. It’s mostly the helpers and labourers who fall into the working class, as opposed to those with formal training in a skilled trade. There’s also a huge difference between men and women in the trades. While 32 percent of working-class men are in trades-related work or employed as some other kind of transport and equipment operators, only 4 percent of working-class women are. 

Immigrants are much more likely to find themselves in the working class than other Canadians. Census data show that the longer an immigrant has been in Canada, the less likely that he or she is a member of the working class. Fifty percent of immigrants who arrived in the previous five years found themselves in the working class, whereas only 34 percent—equivalent to the national average—of immigrants in Canada longer than 35 years did.

In short, the common stereotype of Canada’s working class no longer holds true. The “new working class,” as we called it in our paper, is just as likely to be female, much more likely to be working in a sales job or in the service industry, and highly likely to be recently immigrated.

These findings have important policy implications for the 6.5 million Canadians in working-class jobs. They constitute more than one-third of Canada’s workforce and represent the demographic foundation of a significant multi-ethnic, working-class voter coalition. But any party that seeks their votes must address their real policy needs.

A working-class policy agenda

On some of these issues, Conservatives have already staked out important territory. Take housing, for example. The transition from a goods-producing economy to a service-providing economy has led to an increasing concentration of the working class in major cities where services are most needed. Our research also predictably shows that the working class earns considerably less than other types of workers. The combination of these two factors makes it exceedingly difficult, if not impossible, for the working class to find affordable housing near where they work. The result is that working-class Canadians face impossible housing choices, including often longer commutes and less time with their families. 

More efficient public transit will be a key part of the solution to this problem as well. Poilievre’s focus, as well as that of his predecessor Andrew Scheer, on housing densification along transit hubs is a good first step in that direction.

A working-class agenda must address foreign credential recognition for new immigrants. The time and income lost to immigrants before they can work in jobs that are commensurate with their education is a serious opportunity cost to both them and the Canadian economy. Poilievre’s commitment to establishing a 60-day guarantee for recognizing foreign credentials is promising for highly-skilled immigrants. 

However, immigration policy must also recognize that low-skilled foreign workers may compete for the same kinds of jobs as working-class Canadians which can put downward pressure on wages. This represents an area within immigration policy that could pit a working-class agenda against the interests of businesses that rely on temporary foreign workers, but it is one that will require a response from a future government. A true working-class agenda would ostensibly cut the number of non-permanent residents entering the country and refocus the permanent resident stream so that it’s overwhelmingly high-skilled workers. 

It would also significantly reform the Trudeau government’s childcare policy which fails to provide the flexibility needed by the working class. The current program prioritizes one kind of childcare: institutionalized daycare, which tends to offer childcare during standard 9-5 hours. But our research showed that the working class is more likely to be working unusual hours, including evenings and weekends, and is likely to hold more than one job. A working-class childcare agenda would be built around the needs of these families, which includes flexibility, something that the federal childcare program does not offer. One way to achieve this would be to put the money toward a reformed childcare expense deduction that would flow money directly to parents and leave the decision-making in their hands.

Finally, our education system needs a serious revamp. Consider for instance our research finding that 53 percent of those in working-class jobs have post-secondary credentials. This includes one in six who have a university degree. These numbers suggest a serious misalignment between our education system and the needs of the labour market.

While education mostly falls under provincial jurisdiction, the federal government subsidizes the system through the Canada Social Transfer and funds graduate and post-graduate research through the granting councils. A working-class agenda would aim to rebalance the focus of education policy to better reflect the interests of the 30 percent or so who consistently don’t go on to post-secondary education. 

These are just a handful of policy areas that need to be fleshed out in a plan focused on the working class. The commonality is that they reflect the interests, needs, and aspirations of today’s working class based on how they actually live and work rather than commonly-held misperceptions. 

These issues therefore represent a good test for Poilievre and the Conservatives and their genuine commitment to a new, working-class conservatism. Major policies on housing, immigration, childcare, and education would show that the Conservatives are attuned to changing working-class dynamics and ready to fulfill the vision of a multi-ethnic, working-class coalition for the twenty-first century. 

If you want a well-functioning economy, people must have hope that hard work will lead to success. But in Canada, people are giving up. A recent poll by Abacus found that a full 74 percent of Canadians believe housing affordability will get worse for first-time homebuyers in 2024 and that 57 percent of non-homeowners are either pretty pessimistic or have given up hope entirely of ever being able to buy a home. That’s up from 48 percent since September 2023. 

Locking young people out of home ownership is bad for the political fortunes of incumbent governments and bad for the economy. It is also a threat to the social stability of Canada, according to a recent RCMP report. Therefore, all orders of governments need to restore the dream of homeownership to Millennials and Generation Z, while creating abundant options for renters.

Additional housing supply for both owners and renters is necessary. But building new supply will take time. Governments cannot expect people to feel good about the measures taken to increase housing supply if they’re living in unsuitable spaces, with only the promise that supply may restore affordability in a decade or more. Canadians need solutions now, so the government needs to find ways to get existing homes into the hands of first-time homebuyers. 

We believe it’s possible to attack the demand side of the equation to get first-time homebuyers into homes sooner. This goal can be accomplished through a three-part plan of scaling back international student enrollment, creating incentives for investors to return single-family homes to the ownership market, and making it easier for first-time homebuyers to qualify for mortgages. The key is that all of these reforms must be implemented together for it to have an effect.

Getting more single-family homes back into the hands of families

The only immediate way to increase homeownership for younger families is to make it easier for them to buy homes that already exist or are about to be completed. In Ontario alone, there are nearly 700,000 single-detached, semi-detached, and row homes that are not occupied by their owners but are serving some other purpose. 

While homes being left unoccupied or turned into short-term rentals receive a great deal of attention, the majority of these investor-owned homes are being used as long-term rentals, often for university and college students. With the international student boom, entire neighbourhoods are getting converted into student rentals. These conversions reduce the number of homes available for families but also cause inefficient use of existing infrastructure. It leaves local elementary schools underused because these neighbourhoods then lack children.

International students and other non-permanent residents add to the social, cultural, and economic fabric of Canada. However, for them to thrive, they must have adequate housing. Canada’s international students and temporary foreign workers programs need to be scaled back even more until Canada’s non-permanent resident population returns to pre-pandemic levels. The scale of the international student program, in particular, should be tied to the construction of on-campus or near-campus housing. This could help prevent the loss of single-family neighbourhoods in our cities.

Governments should then create incentives for the current owners of those student rentals to return them to the market to be used as homes for actual families. A time-limited and temporary reduction in capital gains tax or provincial land-transfer taxes when selling a secondary property could act as such an incentive. For example, the capital gains inclusion rate could be lowered for any single-family home or condo unit purchased before January 1, 2024, so long as that unit is sold to a buyer using it as a primary residence, and the sale is completed between July 1, 2024, and July 1, 2027. This measure would incentivize investors to return those units to the ownership market. Over the longer term, the tax system should be designed to disincentivize investors (from mom-and-pop investors to large domestic and foreign corporations) from buying up existing single-family homes and instead incentivizing them to provide capital only to new home construction (rental and ownership).

While having investors sell their portfolio of single-family homes will increase the supply of homes available for purchase and put downward pressure on prices, it will still likely not be enough to allow first-time buyers to purchase these homes. Last year, home sales dropped by 11 percent due in part to high prices and interest rates, causing first-time homebuyers and young families to be unable to qualify for a mortgage at all. The drop in sales can be addressed by recognizing that the current rules could be better designed for younger homebuyers. 

For example, the current 25-year amortization rule helps ensure homebuyers will not still be paying off their mortgages when they are in their 80s or 90s. However, these rules do not take into account the age of the buyer and treat a 50-year-old and a 30-year-old the same. Because younger buyers have more time left in their working careers, they should be allowed to choose longer amortizations if they wish. A 35-year-old buyer with a 30-year amortization would still have their mortgage paid off before retirement. The federal government could create an amortization length of 30 years, but only for first-time homebuyers of primary residences. Ideally, this would only apply if one of the buyers is under 40 years old. It could even introduce 35-year amortizations for buyers under age 35. The reform would allow more young families to qualify for a mortgage and give an advantage to first-time homebuyers when they are competing with investors and older buyers for a home.

Finally, the current stress test rules are not particularly well-designed for young professionals. The stress test is an important tool to ensure that homebuyers can continue making payments if interest rates go up or if economic circumstances change. However, the current test may be excessive for young professionals, who are likely to be earning more five years from now than they are today. Canada should consider reducing the stress test rate from 200 basis points to 50 basis points, but only for first-time homebuyers of primary residences. Or, for buyers under 40 (and the home will be used as a primary residence), who choose a fixed-rate mortgage of five years or more. As with the amortization changes, it would allow more families to qualify for a mortgage, while giving an advantage to families over investors.

It is critical that these ideas be implemented together. Policies designed to increase homeownership that do not take into account the rental market risk displacing renters. A program in the Netherlands that banned investor ownership of some housing types did manage to increase first-time ownership. But it also led to increases in rents, as lower-income renters were displaced by middle-income families. It left more renters chasing fewer rental properties. A plan to scale back international student enrollment until sufficient on-campus and near-campus housing can be built would help minimize this effect, ensuring rents do not skyrocket as rental housing is converted into ownership housing.

Governments cannot afford to wait for new supply to come onto the market to address the dying dream of homeownership in this country. Canadians cannot afford to wait that long. Demand-side policies must be a part of every government’s toolbox in 2024.