CANADA: “AMONG THE LARGEST LOSERS”
The 2025 World Happiness Report is getting a lot of attention in Canada, with good reason, as we have dropped from 5th place in 2015 to 18th this year, continuing a remarkable downward trend.
The decline, according to the report’s co-author Felix Cheung, a University of Toronto assistant professor in psychology, is largely driven by a decline in happiness among Canadians under the age of 30.
(The CBC story covering this news, “Canada drops to 18th in 2025 World Happiness Report rank, among the ‘largest losers’,” is here.)
I especially notice the CBC’s sad interpretation of Cheung’s point of view, that “There has been a shift in what it means to be a young person in Canada.”
I completely agree with this interpretation, but wish I did not.
Cheung cited housing affordability and a sense of uncertainty as broader social trends that started long before COVID-19: “They feel that working hard doesn’t necessarily allow them to move up that social ladder. And that is something we need to pay attention to.”
Saddling future generations
Here at Marche Wealth Management, we have been talking about this issue for several years. Our most recent budget, the first of Prime Minister Mark Carney, projected an annual deficit of $78.3 billion, an almost doubling of the government’s projection last fall of $42.2 billion. We are continuing to saddle our children, grandchildren, and their future generations with the obligation to pay back, in the form of higher taxes, our spending.
We have an interest in this subject because we have the privilege of working with multiple generational families.
A diminishing dream
Many young people are pessimistic about the likelihood they will ever own a home—a purchase that my generation and the ones before it took almost for granted. As some relief, there is a tax-free savings and investment tool introduced by the federal government in 2022, designed to give first-time home buyers a boost.
We have mentioned it before: it is the First Home Savings Account (FHSA), and we urge all clients to have a look at it, whether they are considering a first home for themselves, or are looking to help younger generations. Almost 40 per cent of first-time home buyers get help from their parents! We can design strategies to meet home ownership goals—including the FHSA, Tax Free Savings Account (TFSA), Registered Retirement Savings Plan (RRSP), gifting while alive, and more.
Just more than half of first-time home buyers are using the FHSA, and I believe that a much greater proportion should be. If you would like to discuss how opening an FHSA can fit into your overall planning and its pluses and minuses vs. a TFSA, please let me know.
Low productivity
In addition to high taxes, Canada’s chronically low productivity makes it even harder for our young people to get ahead. Over the past decade, output per worker in this country has grown by less than approximately 3 per cent, which is one of the weakest performances in the G7, and now sits roughly 25-30 per cent below U.S. levels. That gap shows up in slower wage growth, just as costs—especially housing—have surged.
The result for young people is a tougher starting point: less earning power, higher barriers to home ownership, and a narrower path to building wealth.
What really matters
In this increasingly difficult environment for young people, it serves our clients, whatever their age, to be reminded that what really matters is not the performance of your portfolio but the performance after tax.
This is why having a customized financial plan—something possessed by every one of our clients—is so crucial. All plans take into account tax planning, a focus we renew every year during RRSP and tax season, which is now largely behind us—although, if you are still looking for documents or would like to have a consultation on any of these matters, please let me know.
THREE WAYS CANADIANS (ESPECIALLY YOUNGER ONES) CAN BE HAPPIER
Above, I have mentioned the FHSA, and the importance of conducting tax planning in the context of a customized financial plan. Here are three more ways that young Canadians can work toward happiness:
1
Focus on forward motion, not the gap
For many young Canadians, the discouragement comes from comparing where they are to where previous generations were at the same age. Make steady, visible progress, and you will feel better—and gain momentum.
2
Lean into what you can control
It is easy to feel that the system is working against you and in some ways, it may be. But the people who feel more grounded are almost always those who focus on what they can still influence: their savings, their investing, their decisions, and their time horizon.
3
Play the long game
The path may be narrower and slower than it once was. But the underlying drivers of progress have not changed. Ownership of productive assets, patience, and consistency still compound—even in a more difficult environment.
To say again, we have the privilege of working with many multigenerational families. If there is a young person in your family who is interested in discussing these matters, please do not hesitate to be in touch.
CEASEFIRE
At the time of writing, tensions between the U.S. and Iran appear to have eased somewhat. We should think of this not as “problem resolved,” but instead as “less bad than it might have been.”
While the immediate risk of disruption to energy markets—particularly through the Strait of Hormuz—has receded for now, it has not disappeared.
Any period of de-escalation gives both sides time to regroup and potentially find common ground—or at minimum, avoid further deterioration. If calmer conditions hold, the most likely outcome remains a period of slower growth and somewhat higher inflation, before conditions improve later in the year.
Prior estimates from RBC Global Asset Management remain instructive: a sustained energy price shock could lift inflation by roughly one percentage point in North America, and more in Europe and Japan. Canada’s position as a net energy exporter could, at the margin, provide a modest boost to growth.
All of that said, the ultimate determinant of our portfolios’ performance is not geopolitical events, but the quality of the companies we own.
AS ALWAYS
The war has certainly resulted in a period of market volatility. However, as always, we are well-positioned to prudently capitalize on it when appropriate, by buying companies we believe to be priced below their intrinsic value, and which meet the stringent criteria of our investment philosophy.
Volatility can be unsettling for investors, but really, what it underscores is the importance of staying invested. History is our guide. While geopolitical shocks often generate short-term market volatility, they have had limited influence on the longer-term direction of the market, and even less on our portfolios. As we stated in the February edition of Marche Monthly:
“Across roughly two dozen significant military conflicts since 1950, the S&P 500 – which we consider to be the authoritative indicator of how the markets are doing – delivered positive returns twelve months later nearly three-quarters of the time.”
Staying invested amid uncertainty is all part of the process, and why withstanding volatility generates higher returns over time.
LIBERATION DAY, ONE YEAR LATER
There is the idea of “American exceptionalism”: that the U.S. is intrinsically superior to other countries in various ways, including its business environment and, of particular interest to us, its public companies.
One year after President Donald Trump’s “Liberation Day” of April 2, 2025, on which he announced tariffs on more than 100 countries around the world, there is a question being asked as to whether American exceptionalism is in decline.
For example, the U.S. dollar has been showing weakness since Trump’s return to power, brought about by uncertainty created by his administration with respect to trade and overall policy, and Trump’s pressuring of the U.S. Federal Reserve.
But here is something that remains as true as ever: The U.S. still has the best companies in the world. Yes, the markets dropped after Liberation Day. But once again, they have proven resilient. The S&P 500 index, which is comprised of U.S. companies, is up almost 30 per cent since Liberation Day.
This is why we continue to own U.S.-domiciled companies. Many of them have global exposure via their operations in many—and in some cases hundreds—of countries, which minimizes our concentration risk.
It is also notable that after the U.S. initiated hostilities with Iran, investors bought up the U.S. dollar, once again confirming its status as a haven and global reserve currency.
SPRING IS HERE
Is it? Let’s hope so. April always keeps us guessing. But the trendline of warmer temperatures is clear. Happy Spring!
We don’t speak jargon. We’re all about uncomplicating your life, so we speak plain English. If there is someone you care about—someone who would appreciate this simple approach—please feel free to share this message with them or put us in touch.
Want to discuss any aspect of this month’s blog, or any other issue on your mind? Have a story idea? I am always happy to receive your call or email.
Tyler Marche, MBA, CFP®, CIM, FMA, FCSI®
Your life, uncomplicated
tyler.marche@wellington-altus.ca
416.446.5432
WHO WE ARE
Tyler Marche, MBA, CFP®, CIM, FMA, FCSI® – Senior Wealth Advisor & Senior Portfolio Manager
Elizabeth Yip – Senior Investment Associate
Joy Loewen – Associate
Tracy McClure – Associate
Matthew Wilcox – Associate