The under-24 cohort's potential market strength is estimated at $11.8 billion
The Canada Emergency Response Benefit might be a potent stimulant of activity involving the next generation of home buyers, if the results of a new market study are any indication.
According to Fraser Institute economists Jason Clemens, Milagros Palacios, and Nathaniel Li, around 400,000 Canadians in the 18-24 age range are eligible for CERB. The study estimated that this cohort earned between $5,000 and $12,000 per month in 2019.
“These [young] Canadians represent a total potential cost to CERB of $4.8 billion (before taxes on CERB),” the economists said in an analysis published by The Financial Post. “It’s also worth noting that for this group of CERB-eligible Canadians, CERB benefits are on average higher than their monthly earnings in 2019, meaning they’re actually better off receiving CERB than they were working.”
Moving the age range to Canadians younger than 18 years old who had monthly household incomes of $5,000-$24,000 will push the number of CERB recipients to 855,500, with a total potential cost of $10.3 billion.
And the widest range in the economists’ estimates – the 15-24 age cohort with household incomes of $5,000-$24,000 last year – yielded around 985,200 CERB recipients with a total potential cost of $11.8 billion.
This wellspring of future market strength will likely offset the significant economic impact of the COVID-19 pandemic on younger Canadians, as reported recently by TD Bank.
The TD Bank study found that around 66% of Canadians in the 18-34 age range are bracing for – or have already experienced – job losses or reduced hours due to the coronavirus. To compare, the unemployment/underemployment rate among those older than 55 years old was 38%.
