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Canadian youth are among the unhappiest in the G7

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Over the last decade, young Canadians have reported the second-largest decline in life satisfaction in the Group of Seven (G7) nations. Canadians under 30 are now among the least happy of their G7 peers.

The drop in reported happiness among Canadians has contributed to Canada’s overall decline in life satisfaction since 2013. Canadian happiness, which has seen a steady decline since 2017 in particular, has fallen the second most only to the United States within the G7.

Accounting for all age groups, Canada ranked as the 15th happiest country in the world and the happiest in the G7 for 2023. However, if one excludes older Canadians, Canada’s life satisfaction score falls to second last in the G7, and below countries like Mexico and Saudi Arabia globally.

Late last month, the Oxford Wellbeing Research Centre and the UN Sustainable Development Solutions Network released their annual World Happiness Report, evaluating the happiness of inhabitants in 143 countries. Participants self-reported their happiness on a scale of zero to 10. 

Between 2021 and 2023, Canada’s average happiness score was 6.9, making it the 15th happiest country surveyed. Canada beat the U.K. (20th with 6.749) and the U.S. (23rd with 6.725). Finland (7.7), Denmark (7.58), and Iceland (7.52) were the top three happiest. 

The latest World Happiness Report enables researchers to examine life satisfaction across different age groups. Canadians' reported happiness differs greatly across generations.

Canada's leading rank among G7 countries is highly influenced by two age groups: Canadians aged 45 to 60 years old and those aged 60 and older. These two groups report higher-than-average levels of life satisfaction.

However, Canadians under 30 are the third unhappiest of their G7 peers with an average happiness score of 6.44 from 2021 to 2023. They follow unhappy teenagers and twenty-somethings in the U.S. (6.39) and Japan (6.23). Internationally, if one limits Canada's life satisfaction to Canadians aged 30 and under, the country is ranked 58th globally.

According to the World Happiness Report, Canada’s age distribution contrasts with the global norm, where the young tend to be as happy or happier than the old. Although the study does not attempt to explain declining youth happiness in Canada and other countries, other reports have examined this trend. 

This month, a working paper from the National Bureau of Economic Research in Cambridge, Mass., reported on the worsening well-being of America and the U.K.’s young and middle-aged, with specific implications for Canada.

The study demonstrates that well-being in those Western democracies has historically followed an upside-down U-shape. This has meant well-being rose through young adulthood, peaked in middle age, before declining in old age. However, in recent years, the researchers showed that U was much flatter.

In terms of factors that have contributed to youth unhappiness, the authors highlight the 2008 recession, the COVID-19 pandemic, a failing health-care system, and the persistent “scar” of poor job security and wage growth as these young people begin to work. Finally, they mention the negative effects of smartphones and social media.  

“The world appears to have changed in the face of three major shocks—the Great Recession and Covid as well perhaps as a huge technological change,” write authors David Blanchflower, Alex Bryson, and Xiaowei Xu. COVID-19 and the 2008 recession in particular “appear to have lowered the well-being of those under age forty-five, relative to older groups, and especially those under twenty-five.” 

For more details on Canada's happiness outcomes, read The Hub’s recent DeepDive into the World Happiness Report from March 2024.

For the first time in 12 years, government debt costs will surpass GST revenue

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Projections from budget 2024 show both revenues from the Goods and Services Tax (GST) and public debt charges match each other at $54.1 billion this year. This means that the 5-percent GST will simply to cover the government’s debt-servicing costs. This marks the first year since 2011 that GST revenues will be the same or less than public debt charges. 

The federal government’s debt interest payments have skyrocketed in recent years. They were just $20 billion in 2020-21. But this year they’re projected to hit $54 billion and reach as high as $64.3 billion before the end of the decade. 

Still, the Liberal government’s budget and its proponents have rightly emphasized that although public debt charges have risen significantly in absolute terms, they remain low in relative terms. For instance, at about 1.8 percent of GDP today, they’re far lower than they were in the 1980s and 1990s when they hit as high as 6.5 percent. 

While these debt-servicing costs are manageable, they do come with opportunity costs for the government. Scarce public dollars must be dedicated to servicing past debt, rather than, for example, investing in the country’s long-term productivity capacity. 

In the coming years, the government estimates that GST revenues won’t even fully cover its swelling public debt charges. In 2028-29, for instance, the GST is projected to generate $61 billion in revenue. Meanwhile, public debt charges will reach $64 billion. 

A historical look at the relationship between GST revenues and public debt charges shows that GST revenues have consistently exceeded public debt charges for the past decade by an average of around $11 billion per year.