The Jackpot Generation
What if you woke up one day to discover that millions of people had suddenly won the lottery? Perhaps you’d be happy for these lucky recipients. More likely, you, with your ever-shrinking piece of the pie, would be fuming, even furious, at the injustice of it all. Then again, maybe you’d be one of the winners, quietly exhaling in relief. Finally. Some good news.
A lottery win happened yesterday, and it’ll happen tomorrow, too. Between now and 2026, an estimated $1 trillion will move from Canadian baby boomers to their heirs, mostly millennials. As older Canadians live longer, even more money will stream down in the coming decades. An Ipsos survey found that among Canadian boomers who are planning to leave 100 per cent of their estates to their children, the average inheritance will be about $940,000.
For most people, this is life-changing wealth, enough to pay off the mortgage, to move the kids from public school to private school, to shift their status from renter to homeowner. Some heirs will receive much more—the kind of Porsche-and-penthouse money that they could never earn in their jobs as teachers, accountants, marketing managers. All of this signals an unprecedented economic shift: the greatest transfer of generational wealth in Canadian history, emerging in the form of mass good fortune bestowed upon the demographically lucky. When all the payouts have been made, Canada could look starkly different.
As a Gen Xer whose parents were born before the Second World War, I have noticed, with a touch of envy and an eyebrow raised high, that a lot of millennials are really into their parents. Many boomers retooled the family structure to something more emotionally enmeshed, increasing the level of parental involvement with adult children—a lot of texts and check-ins. To me, this generation of adults so entangled with their parents can seem a smidge infantile. Reaching adulthood usually means arriving at self-sufficiency, signalled by emotional and financial independence. But people are staying alive longer, and the child-parent relationship is, too.
Those tighter familial ties have had economic effects. Baby boomers still hold the most wealth in Canada. Many are “giving while living,” as it’s known, helping their kids secure financial footing with cash gifts and down payments on real estate. And often they’re sitting on their most valuable, ever-increasing assets: their homes. In other words, the approaching tidal wave of boomer deaths will be the final phase in the long project of enmeshment with their kids—a ghostly flotation device from beyond.
An inheritance-based economy sounds like something out of the 19th century. In many Victorian novels, inheritance is destiny, and those without it must scheme or marry (or murder!) to secure a future. Here in the new world, Canada’s 20th century was built on the dream—however fantastical for many—of mobility via meritocracy. Earning one’s destiny is the work-hard-get-ahead foundation of the middle class. But if inheritance determines who succeeds and who doesn’t, the downstream effects for Canada could be devastating. Taxes on primary residences, which are a large portion of Canadian inheritances, don’t exist here. There goes a huge chunk of money from the public purse.
We find ourselves at the precipice: as the lucky are gaining private wealth, our coffers are running low. Success via inheritance tilts the country toward individualism at a time when the collective is vulnerable. How will Canada get through? Once anathema, serious proposals to increase taxes on wealth are gaining traction, with calls for reform coming from surprising corridors. Something will have to give. If not, the great wealth transfer stands to widen the inequality gap to a gulf, where a person’s success in this country is determined not by hard work or education, but by how rich their parents were.
The ability to achieve more than one’s parents, financially and socially, is known in economic and sociological circles as “intergenerational mobility.” Historically, Canadians are among the best in the world at this social-ladder-climbing—better than Americans even, who act like they invented the concept. The levers that have historically made the Canadian Dream accessible were the robust public policies that set us apart from our bootstrappy neighbours: access to affordable higher education, public health care, a social safety net to catch us when we missed a rung and tumbled. Canadians have long subscribed to a set of beliefs about what it takes to succeed, at the top of which are hard work and ambition. With those tools, the thinking goes, anyone can make it.
Millennial Canadians are unconvinced. In multiple surveys, they say they don’t believe that they’ll do better than their parents. They’re gripped by a feeling that’s been labelled the “vibecession”: even as the economy corrects itself, even as interest rates drop, it seems impossible to kick-start your mobility. It’s not a fake feeling. Earnings don’t go as far today as they did a generation ago and, overall, a millennial’s net worth by midlife is now much smaller than their parents’ was. With nowhere else to look, millennials are hitching their dreams to a down-the-road infusion. According to one survey for investment advisers Edward Jones, more than half of younger Canadians say they need an inheritance or windfall to reach their financial goals.
The ongoing wealth transfer is playing out against a background of severe income inequality. In the past two years, inflation and high interest rates have whittled down the finances of the poorest 40 per cent of the population, while the richest 20 per cent are pulling further ahead; today, the top one per cent in Canada controls a quarter of the country’s wealth. Because families with higher net worth are more likely to pass down substantial assets, like property, investments or businesses, the wealth transfer stands to perpetuate existing inequalities. Inheritance means that wealth, already concentrated among fewer families, stays there. Miles Corak is a Canadian economist and professor of economics at the Graduate Center of the City University of New York who studies intergenerational mobility. “When wealth gets passed on to the next generation, it inherently rubs against our sense of fairness. After all, what did you do to be born into a rich family?” asks Corak. “And so some Canadians might begin to wonder about the degree to which equality of opportunity really exists.”
Of course, societies have been shaped by familial inheritance for millennia. In the medieval era, landownership kept power concentrated in the nobility while their soil-tilling serfs could only rent the land they worked. Skip ahead a few hundred slightly more egalitarian years, and many sacrificial, quiet savers of the mid-century’s Silent Generation also left inheritances to their boomer kids. What’s different about today’s handover is scale: so many boomers, and so much wealth, largely bound to real estate. Over nine million boomers were born in Canada between 1946 and 1964. They became the beneficiaries of postwar prosperity at a time when jobs were handed out like Costco samples and good public schools and affordable post-secondary education were a given. “Defined benefit” pension plans—the ones that promise a regular income upon retirement—were a normal expectation, even in the private sector. And then there was the principal residence exemption: a federal policy enacted in 1972 that made principal residences exempt from capital gains tax, meaning homes would never be taxed no matter how much value they gained over time. This built, in essence, a tax shelter for homeowners that’s lasted half a century. The PRE implicitly encouraged homeownership not for the sake of having a place to live, but as a way to get rich.
In contrast, millennials spent their formative years bouncing from one global crisis to another. The oldest came of age in the shadow of 9/11. The youngest were on the cusp of adolescence when the global economy crashed in 2008. Over the course of their lives, the cost of post-secondary education, especially graduate programs, skyrocketed. Post-collegiate life began on the back foot: the average student debt at graduation is now around $30,000. Millennials face a crippling debt-to-disposable-income ratio, reaching 265 per cent in 2024. Those defined benefit pension plans that their parents enjoyed are retro now: in 1990, about 90 per cent of pension plan members in the private sector were in defined benefit plans. By 2009, the number had dropped to 56 per cent.
But the most generation-defining source of anxiety for those between 30 and 45 is housing. More millennials rent than ever before, fighting against record-low vacancy rates and record-high average monthly costs. The boomers’ tight grip on property is a key piece of our inequality crisis. As of 2019, homeowners born between 1955 and 1964 now have an average net worth of $1.4 million—seven times that of non-homeowners born during the same period. Ricardo Tranjan, a political economist with the Canadian Centre for Policy Alternatives, points to this as evidence of a new reality in Canada. “Wages don’t buy houses. Houses buy more houses,” he says. When homes are kept off the market longer, or passed down within a family the way good china used to be, there are fewer opportunities for anyone without a link to a boomer to get in. Statistics Canada reports that the likelihood of a person born in the ’90s owning a home is greater if their parents did. If your parents never owned a house, you are, for want of a better word, screwed.
We’re not good at talking about money, but we’re even worse at talking about death. So the topic of inheritance, that bitter cocktail of the two, is squirm-inducing. Shannon Lee Simmons is a certified financial planner who runs her own consultancy in Toronto. When inheritance comes up in meetings with her millennial clients, she notices a pattern. “I hear the same joke over and over. ‘So one day, when my parents die, I’ll be a millionaire. But how am I going to pay my bills in the meantime?’ ”
In her practice, Moira Somers, a psychologist and family wealth consultant in Winnipeg, is constantly fighting through the secrecy around estate planning with her clients. Reasons vary: general discomfort around any money talk at all. Denial of death. The parents’ fear that kids who know an inheritance is coming will stop striving. Or perhaps the will favours one child over another, so the parents don’t want to trigger a domestic storm. “They’ll say: ‘They’ll find out when I’m dead,’ ” Somers explains. She discourages the big-reveal approach and pushes for a dialogue among the living, where the financial picture gets clear enough for inheritors to see what their futures might look like. Making this happen is an uphill battle. A survey by IG Wealth found that only one-fifth of Canadians have had detailed discussions with the beneficiaries of their estate or executors of their will. “People don’t want to talk about it,” says Simmons. “It’s too painful. Inheritance comes at an emotional cost, and every dollar is steeped in it.”
Those conversations, however weird, can be a pre-emptive strike against later disappointments. One of Simmons’ clients came in to review her retirement strategy. She told Simmons that her parents had a multi-million-dollar house in Oakville, Ontario, and she was counting on the money from its sale. But when her parents died, it turned out they had reverse-mortgaged the house to the gills, and there was very little money left. Another adviser worked with a client in her 20s who wanted advice about how to responsibly manage the $400,000 her deceased grandparents had left her. But then the assets were valued and taxes were paid—and the inheritance was a lot smaller than she expected. That $400,000 is expected to shake out closer to $100,000. Simmons tells her clients never to count on an inheritance unless there’s been a full, transparent conversation with all parties. “You don’t want to be the grasshopper who sang all summer,” she says.
What this generation will do with all this money is a question mark. Surveys reveal that millennials are quite financially literate, if suspicious of traditional financial institutions, and drawn to DIY investing. But wealth, in the framing of the American financial consultant James Grubman, is a new country. People from a different class may not feel comfortable in this alien land of the wealthy, and a surprising number of heirs, consciously or unconsciously, lose their inheritances, letting in scammers, making bad investments. Somers had a client whose parents left them a significant sum of money. But the client was not comfortable suddenly catapulting up the socioeconomic ladder. Very quickly, they made rash investments at an Olympic pace, as if outrunning the money. Within four years, they’d returned to their initial net worth.
Some advisers I spoke to admitted to untangling clients who were getting their investment tips from TikTok and crypto ads. One planner helped a parent in their 70s transfer $200,000 to a millennial child as a kind of teaser—a trial run for the real inheritance that would happen when they died. The recipient made a run of withdrawals, offering vague reasons. The adviser assumed something nefarious was afoot—a dodgy investment, maybe an online scam? As the money dwindled, the parent realized a trust would have been a better idea. Because they had simply gifted the money, it became the beneficiary’s to fritter away.
No one brags about inheritance. It’s a little embarrassing, strange, at odds with those foundational myths of productivity and self-reliance. Among new heirs, Shannon Lee Simmons observes a fair amount of anxiety. Spending an inheritance is a final obligation to one’s parents, spring-loaded with pressure to do it right or risk betrayal of the dead. “The fear of squandering is deep. When I read my intake forms for people who have inherited money, the word ‘squander’ is very, very, very prevalent.”
I spoke to one 35-year-old millennial, who I’ll call Chris. As he made his way to adulthood, his family provided many boosts up the ladder toward financial security. His grandparents had set aside money to pay for post-secondary education, so he didn’t accrue student debt. After he graduated, his parents helped him with a down payment on a condo in a suburb of Vancouver, which he bought in 2015 for about $200,000. But he’s still stressed about money. “I feel so broke all the time. That’s crazy, I know it, and I have guilt because I know it’s a very privileged position to be in,” he says.
Years from now, that privilege will be even further cemented through an inheritance that will be cleanly split between him and his brother. His parents are retired from their government jobs, with over $2 million in savings, accrued from his mom’s chronic thriftiness but also sizable inheritances from their own parents (luck begets luck). That $2-million-plus cushion doesn’t include excellent government pensions or the house, which Chris’s parents purchased for around $188,000 in the mid-’80s but is now worth about $1.7 million. I know this because I spoke to his parents and they told me. But Chris said he doesn’t know how much money is coming his way. “There’s some section of my brain that’s like, I know it’s there. I know it’s going to be substantial. My brother and I are probably both going to inherit seven figures. I worry that I’ll get lazy or just rely on all that’s coming,” he says.
Sudden wealth can also isolate people from their peers. Inheritance stands to breed bitterness, striking at a sense of injustice—hostility and envy are not the building blocks of a healthy society. Some advisers told me about clients who inherited a windfall in their 40s and decided to stop working entirely. The promised ladder—work hard, move up—will get even further out of reach unless there’s a shift, a reassurance that the promise is not broken, evidenced by policies that even the playing field. It’s all a recipe for misery, personally and nationally.
This situation is decades in the making, according to Generation Squeeze, a think tank out of Vancouver that advocates for intergenerational fairness. “The wealth the boomers have is part of an intergenerational tension,” says Paul Kershaw, founder of Generation Squeeze and a professor of public policy at the University of British Columbia. “But for the quarter of Canadians who don’t have that attachment to a boomer, and for the others who are attached to a boomer who doesn’t have a lot of housing wealth, the moment the others start passing it on to their kids, it’s going to fuel intra-generational tensions.”
Inheritance doesn’t always require death. Many parents are giving with a warm hand, not a cold one, as one wealth adviser put it to me, succinctly and creepily. The Bank of Mom and Dad is both a punchline and a reality. According to Statistics Canada, one in six homes across Canada owned by people born in the 1990s is co-owned with their parents. Nearly a third of first-time Canadian homebuyers cover their down payment with money from parents or relatives. This holds especially true in pricier urban centres, like Toronto and Vancouver, but smaller cities like Guelph and Hamilton aren’t far behind. And the amounts have increased too, rising 73 per cent from 2019 to hit a national average of $115,000 in 2023. Where housing is most expensive, the handouts are the highest, with Ontario and B.C. parents giving the most: $128,000 and $204,000, respectively. Sometimes the kid has the income to qualify for a mortgage but doesn’t have the down payment, and the parents will cover that. The reverse can also happen, when the parents will have to co-sign because the kid might have a down payment but can’t qualify for the mortgage at higher interest rates.
This kind of boost is no longer just for Succession-type families. “When I started in this field, the idea of living inheritance was only for the super-elite,” says financial adviser Shannon Lee Simmons. Before opening her own financial consultancy, she worked with many high-net-worth families at a major firm. “They wouldn’t even call it an early inheritance. It was just rich people helping their kids be rich. Now a lot of retirement planning that I do with my middle-class boomer clients is like, How much can I give my children now without being in trouble myself? Because they’re anxious that their children will never be able to own a home.”
Sometimes these gifts come with strings. An adviser described one couple who set up a trust for their kid with the promise of buying them a house upon graduation from university. The catch: it had to be in the same neighbourhood as the parents. Another set of parents is supporting their child at every stage of the property ladder. After paying for their daughter’s $75,000 wedding, they’ve purchased a condo for the couple, with plans to upgrade them to a house in the ritzy neighbourhood of Kitsilano in Vancouver once they have a few kids. (The younger couple, it should be noted, are doctors.)
I’ve wondered about the disconnect between the mind-blowing housing prices in my downtown Toronto neighbourhood of Trinity Bellwoods and these hip millennials moving in with spiritually fulfilling but low-paying creative-class careers. I’ve watched, over the past decade, as Teslas and Jaguar SUVs have crept onto our block, which, when we arrived in the early 2000s (lucky, lucky), was known for sex workers and karaoke-bar shootings. I observe—snoopily—these millennials setting up in $2-million houses and I wonder: how can an illustrator and novelist possibly afford that three-storey Edwardian? A potter is undertaking that solarium reno?
I call this status fog: how hard it is to know where anyone stands financially, or to recognize what real achievement looks like, when invisible wealth is altering one’s place in society. The markers of a comfortable middle-class life—being able to afford a family vacation or buy a home—appear to exist, but do they actually? It sounds like a tree-falls-in-the-forest-type koan: if the family lounging poolside on their vacay couldn’t pay to be there themselves, is there even a middle class?
I spoke to a woman I’ll call Jane, who is 40 and lives in a family-friendly, pricey central Toronto neighbourhood with her school-age kid and husband. Her family rent an apartment, and homeownership isn’t in the cards for them. All around her, she sees parents financially boosting their kids. “It’s not a transfer,” she says. “It’s a trickle.” She’s noticed that, on playgrounds and at the office, most people aren’t overt about the parental subsidies that are floating their lifestyles, but some do talk, if in hushed tones. Down payments. Daycare. Summer camp. Family vacations. Parents are footing the bill. A friend of hers lost her grandparents recently and, soon after, made a down payment on her first house. Everyone is going to “the cottage,” but everyone knows what that means. “No one actually owns a cottage. It’s Mom and Dad’s cottage,” says Jane. “You go into nice neighbourhoods, and it’s like, ‘Sorry, what do you do? How do you own this house?’ And then slowly it comes out: ‘Oh, you’re the son or daughter of... right. Okay. Yeah, that makes a little bit more sense.’ ”
Living inheritance is also creating many opportunities for intergenerational households, where parents and their grown kids and grandkids all co-habitate or live nearby. Certainly, this is nothing new—Canadian newcomers and Indigenous people are the groups most likely to live multigenerationally. But for Canadians wedded to the postwar script of the single-family home, it may be an unexpected swerve. Managing chores with Mom and Dad at 40 might not have been in the master plan, but consider the upsides. Living together might break the loneliness epidemic. Perhaps it strengthens those much-frayed communal and community ties.
Heather Bell and her husband are one couple whose housing solution came in the form of co-ownership. They contemplated starting a family a decade ago. Newly married with well-paying jobs, they still didn’t have the means for a down payment on a house and were living in a two-bedroom Vancouver rental. “If you’re going to live in the city, you have to be comfortable with people leaving. And that’s exactly what we’ve seen. Our friend groups have moved out.” The ones that stayed? “They typically have family support.”
Bell’s father had bought a big Arts and Crafts home in the desirable neighbourhood of Riley Park in 2006 for $780,000. As the years passed and the market blew up, Bell’s stepmother pitched an unorthodox plan. They would rip down the house and build a duplex where Bell and her family would live in one unit, her parents and grandmother in another. Bell’s sister would reside in a new laneway house. On top of a mortgage, each family member covers monthly maintenance fees and taxes.
The gift was what Bell’s father calls “the dirt”: the land that they would build on. The property will likely be worth $4 million when they sell it. It was, in essence, a down payment—one that will continue to appreciate, with the likelihood of a big cash-out down the road. “Without it, we would not be living in this neighbourhood. We would have left the city, or we’d be in a two-bedroom condo with two kids, just making do.”
When Bell moved in, she was worried the neighbourhood would be a desert for families: what young parents could possibly afford to live there? But instead, there are lots of kids and big block parties. Those people got there the same way she did. On her block alone, she knows of several other intergenerational living situations and laneway houses, most of which, she presumes, are financed to some degree by parents.
A perfect storm is brewing in Canada. Before the boomers die and pass their wealth down to their heirs, they’re going to get old, and that’s going to cost Canada a lot of money. Because of that, the country stands to become poorer over the next decades—at the same time as millions of private individuals are getting richer from the wealth transfer. The problem, again, is demographics. In the ’70s, governments could pay for medical care for older people because there were so many working boomers—seven for every retiree. But today, there are only three workers to pay for every retiree.
Though provinces may levy probate or administrative costs to the estate of the deceased, and capital gains tax may apply, Canada is the only G7 country without an inheritance tax. Six U.S. states gather inheritance taxes. Most EU countries have some form of one. In the U.K., any estate valued above £325,000 is taxed at a rate of 40 per cent—one of the highest in Europe. Just like here, housing values have gone wild in the U.K., and the revenues drawn from inheritance taxes have been steadily increasing, too: they came to approximately £5.3 billion between April and December of 2022.
In a 2021 Abacus poll, 88 per cent of Canadians supported a wealth tax. One of the calls is coming from inside the building: a national group of wealthy young Canadians called Resource Movement has been advocating for tax justice that would directly affect their own inheritances. Most of their members, about 200 across Canada, are in the top 20 per cent of wealth holders; some are in the top one per cent.
Resource Movement proposes a progressive inheritance tax targeting the top 10 per cent of estates, increasing to a marginal rate of 55 per cent on estates over $7.5 million. But a more radical approach has been put forward by French economist Thomas Piketty, whose book Capital in the Twenty-First Century sold over two million copies. Piketty proposes “inheritance for all,” where every citizen receives a minimal inheritance, paid out at 25 years of age. This would be financed by a mix of progressive wealth and inheritance taxes, aimed squarely at stripping away some of the generational privilege of the “rentiers”—families who live on investment income like property.
Nicolas Chevalier’s mother and stepfather built a successful construction business outside of Montreal. Chevalier, who’s now 42 and uses they/them pronouns, worked construction and did a degree in environmental science. When their mother and stepfather died, the inheritance from the sale of their house thrust Chevalier into a new economic bracket. They noticed that, as a construction worker, a big portion of their paycheque went to taxes and dues. They thought about this when their parents’ house was sold and the taxes were nominal. “Most of my current wealth comes from inheritance rather than income, and yet my income was taxed way higher than my wealth,” Chevalier says. “It’s weird that a person like me would have this much wealth. It doesn’t align with the values I have.”
Chevalier admits that in the wake of those losses, there was an upside to inheritance: they immediately paid off thousands in student loans. They could afford to take time off to grieve. Then they took a few pieces of furniture, as reminders of their mom, and moved into a rental apartment in Montreal’s NDG neighbourhood. The money made Chevalier anxious, a little guilty. “Money is trouble,” they say.
So Chevalier joined the Montreal chapter of Resource Movement. The group meets regularly, often over Zoom. Members share their money stories to air the truth about their good fortune—maybe assuaging some of that guilt. Then they strategize, directly funding some social-justice groups and, beyond cheque-cutting, advocating for tax reform. On top of their support for an inheritance tax, they echo the NDP proposal for a one per cent wealth tax on fortunes over $20 million. The group approves of the new capital gains inclusion rate, which taxes two-thirds of net capital gains over $250,000, not including primary residences. It’s estimated to generate $19.3 billion that can, says Chevalier, go toward programs that may slightly close the inequality gap—health care, childcare and, of course, housing.
One of Resource Movement’s big concerns is the ongoing boomer-millennial wealth transfer. “It’s a big risk. Unlocking this transfer of wealth means money just goes to an even smaller pool of people, and the cycle goes on,” says Chevalier. A return to a concentration of power among a land-owning elite doesn’t sound exactly forward-thinking, nor does it help address Canada’s looming productivity crisis. The OECD says that Canada is going to lag behind the developed world’s productivity growth for the next 30 years. Once success is divorced from output, becoming purely a function of arbitrary family input, why innovate at all? How much can-do spirit can anyone muster when it’s clear that the system is rigged? A have vs. have-not society is the soil of anger, divisiveness—if not defeat, then hate.
When I spoke to Chris, the young Vancouverite who stands to inherit a hefty sum from his parents, I asked him if he thought the trillion-dollar transfer was going to change the circumstances of his generation. He said he could see a future where those with low incomes would get pushed further down the ladder, and those with money would move up even higher. “We lived in that middle range,” he says. “I wonder who will be there.”
This story appears in the October issue of Maclean’s. You can buy the issue here or subscribe to the magazine here.
