Why Vancouver is Canada’s worst city for young professionals

They earn less, owe more, and can only dream about owning a home. Is it any wonder that Vancouver’s young and educated are leaving town for good?

These days, it takes Hans Seidemann just three minutes to get home from work. During lunch breaks, meanwhile, he has time to grab groceries, take them back to his “full house with spare rooms,” cook, eat, and even “click around on Facebook before getting back to work.” This is because Seidemann no longer lives in Vancouver. He didn’t want to leave, he says, although now that he’s returned to his hometown of Prince Rupert he’s actually enjoying himself. “An opportunity came up for me that had me move up here, and I wasn’t seeing any opportunities like that down in Vancouver,” says the 31-year-old, who earned his bachelor’s degree in integrated engineering at UBC before working as an engineer at a prosthetics company for over two years. But with his old job and the price of rent in the big city, it was going to take Seidemann another three years to pay off his student loans. Now he expects to have them gone this year. And the work he’s doing in Prince Rupert—helping the city plan for major industrial projects—is fun and fulfilling, he says. “If it continues to be this way, I could definitely see myself settling down here for the long run.”Seidemann is hardly alone in leaving this city for greener, albeit colder, pastures. That’s because mild winters just aren’t enough to retain a growing number of educated Vancouverites who are choosing to pursue their careers—and their lives—elsewhere. Indeed, this has become something of a postmodern allegory in Vancouver, as well as a topic for debate. Not everyone believes the anecdotal evidence of an ongoing exodus—a friend here, a cousin there—but the numbers are much harder to argue with. Between 2006 and 2010, Vancouver gained a net 4,199 interprovincial migrants between the ages of 25 to 34. Between 2011 and 2015, however, the city lost 2,350 people within that same range to other provinces.Many have rightly cited expensive housing as the reason for this, but in fact there are a number of systematic hurdles that, when taken together, have turned Vancouver into one of the worst cities in North America for the young and educated. For example, while we’ve known for a while that Average-Joe incomes in Vancouver don’t support home prices (median family incomes here ranked just 22nd among 28 Canadian cities in 2013), it turns out our best and brightest are no better off. The median income for 25-to-34-year-old degree-holders in Vancouver is $36,484, compared to $41,419 nationally.young-educated-infographicV2And not only does Vancouver trail every other major city in Canada in this regard, the gap doesn’t get any tighter with age. In 2014, researcher and urban planner Andy Yan—who’s become a bit of a local celebrity in recent years—uncovered something, he says, that was truly unexpected. Among Canada’s 10 biggest metropolitan areas, Vancouver was home to the lowest-paid 25-to-54-year-old workers with degrees by far. If you took those 10 median incomes and drew a line from first place (Ottawa) to last place (us), it would decline like a gentle slope before transitioning, suddenly, into a cliff—with Vancouver at the bottom.But if these relatively low incomes aren’t bad enough, there’s another burden that Vancouver’s educated young people—at least, those who were educated here—have to shoulder. Not only do B.C. students graduate with the most debt in the country ($34,886 on average, compared to $26,297 nationally, according to a 2013 BMO survey), they also pay the highest interest rate on those loans: 2.5 percent plus the prime rate, which at present adds up to roughly 5.5 percent. For risk-averse graduates who opt for a fixed-rate plan, it’s nearly eight percent—comparable to what you might pay on a line of credit. “It’s hard to believe that the risk premium that ought to be attached to a student versus, say, a home buyer is 400 basis points higher,” says Krishna Pendakur, a professor of economics at SFU. Alberta, for example, charges only the prime rate on its student loans, while Ontario tacks on an additional one percent. Then there’s Newfoundland, which eliminated interest entirely on them before scrapping the loan system altogether in favour of a grant-based one.Newfoundland is an instructive case, given that it has long grappled with the problem of its young and educated workforce leaving in droves. In 2007, former Newfoundland premier Danny Williams didn’t shy away from pointing a finger at what he saw as a leading cause. “We are losing young people here because of debt,” he said. Unlike Newfoundland, however, B.C. has made no such changes. And so it was that, in 2011, the heads of B.C.’s four research universities lobbied the provincial Liberal government for a lower interest rate on student debt, noting that ours was the highest in the country. Despite their efforts, and despite the fact that our graduates are the most debt-burdened in Canada—likely due to higher shelter costs and lower parental incomes—nothing has changed. (Former UBC president Stephen Toope and SFU president Andrew Petter declined to comment for this story, though both expressed continued interest in the matter.)Naturally, these challenges feed into one another. Higher debt payments, higher housing costs, lower incomes: all are incentives to make more money elsewhere, or to leave in order to save on living expenses. And while a high interest rate on student debt has an obvious solution—lower the rate—the other challenges are more difficult to tackle, in large part because they are more difficult to understand. Theories abound on what’s driving Vancouver’s real estate market (foreign investment, a low interest rate, a lack of land), while the fact that educated Vancouverites make so much less money than their peers in other cities is equally vexing.

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Andy Yan admits he’s not entirely sure why Vancouver incomes are uniquely low, but he has at least one theory. “Which has more head offices: Vancouver or Calgary?” Yan asks rhetorically. “Vancouver actually has more head offices than Calgary—however, they are half as big.” In fact, among the 10 largest cities in Canada, Vancouver comes in at ninth place in terms of head office size. This may be a sign, Yan says, that Vancouver is not a good environment for growing small businesses into larger firms. That’s more or less how Krishna Pendakur sees it, too. “Vancouver is a city of consumption, not production,” he says. The problem? It could be that businesses are struggling to keep talent around.That combination of factors—low incomes, high housing costs, and high student loan payments—is making it difficult for young Vancouverites to see a future for themselves in this city. “It’s really hard to create a garden of new economic activity under an inch of concrete,” Yan says. “We may very well attract some of the smartest and brightest around in this country, but to saddle them with debt limits their potential, and if anything is motivation to get out of a region that may not pay as well as other regions.” In other words, retaining talent—not just attracting it—may be the biggest priority for those who want to see Vancouver become more than just a place where people spend money they earned somewhere else. “At the core of this, it really is a question of how can Vancouver be a city of the future, for the future,” Yan says. “Vancouver is of the future, but then without the ability to create a city for the future—that is for young people, for young workers, for young families—there will be profound challenges on the road ahead.”Yan isn’t alone in worrying about the city’s future. Writing for the Financial Post in February, Hootsuite CEO Ryan Holmes echoed Yan’s concerns, and blamed the housing market specifically for making it difficult to keep talented workers around. “It makes it exceptionally hard to grow a business in Vancouver. I’ve experienced this firsthand, but it’s hardly unique to the technology sector,” Holmes wrote. “Qualified job candidates are deterred from moving to the city and great employees are leaving because they can’t afford to build a life here.” That was the conclusion of a 2015 Vancity report as well. Between 2001 and 2014, house prices in Metro Vancouver increased 63 percent while salaries rose just 36.2 percent—and that was before the remarkable run-up in prices on detached homes in the last 12 months. If that gap continues to grow, the report said, talent will continue to leave.That was certainly the case for Hans Seidemann and the thousands of others like him who have moved to Calgary, Toronto, Seattle, or even Prince Rupert—anywhere, really, that offers them a better chance of being able to build a future. Jennifer O’Keeffe, however, is still sticking it out. O’Keeffe, who ran for Vancouver city council last election with COPE, is obviously invested in her community’s future and wants to be a part of it. But like many people her age, she isn’t convinced that she’ll be able to. “I want to teach after my master’s, but I’m not sure what the job market is going to be like when I get out of school, and I have doubts about whether or not I’m going to be able to afford to stay in Vancouver,” she says. O’Keeffe hears similar stories from all her friends: the jobs don’t pay enough, they’ll never own homes, and they’re buried under mountains of student debt. So what if the views are nice? “It’s kind of like what Adam Smith said in The Wealth of Nations,” she says. “No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.”Follow @trevormelanson