First-quarter data shows growing disparity in wages, savings, and net worth
Wealth inequality in Canada is getting worse as the richest get richer while those on more modest incomes see their finances stagnate.
In the first quarter of 2025 wealth and income disparities reached new heights according to new Statistics Canada data, with the income gap - defined as the difference in disposable income share between the top 40% and bottom 40% of households - surged to a record 49.0 percentage points from 43.8 points just three years earlier.
For lower-income households, wages stagnated or fell as the bottom 20% experienced a 0.7% drop in average wages (about $17), largely due to fewer work hours, especially in mining and manufacturing.
But investment income for this group also plunged - by $399 or more than 35% - which more than negated the modest benefit from lower interest payments (‑$107; 7.1%).
Meanwhile, the top 20% saw their disposable income climb by 7.7% (about $3,748), fuelled by a 4.7% rise in wages and a 7.4% boost in investment returns (+$1,070).
The middle 60% still posted modest income gains of 4.9% thanks to wage growth of approximately 4.4%, but their investment income dropped slightly (‑2.1%, or about $54).
For savings, the lowest‑income households increased their net dis‑saving by 3.9%, as their spending outpaced income growth, especially on housing and utilities.
For the middle tier net dis-saving improved the most relative to other households as disposable income gained 5.9% while consumption rose only 4.5%.
The top group sat comfortably, with a 9.6% jump in net saving off the back of strong income gains.
For wealth, rich households dominate with the top 20% owning nearly two‑thirds (64.7%) of national net worth, or about $3.3 million each, while the bottom 40% hold just 3.3%, or roughly $85,700 per household.
Overall household wealth grew 2.8% year‑over‑year, thanks mainly to financial assets (+6.7%), but undercut by a 1.4% slide in real estate values.
The wealth gap - the difference in net worth share between top 20% and bottom 40% -expanded slightly to 61.4 percentage point, but even the least wealthy households showed a 3.1% gain in net worth, led by a strong uptick in financial assets (+6.9%), though real estate value gains were outpaced by growing mortgage debt.
Young households (under 35) were hit hardest. They recorded the slowest wealth growth (+0.5%), had falling real estate holdings, and continued to reduce mortgage debt—a trend that began in late 2022. Their debt‑to‑income ratios improved, contributing to a broader decline in debt service burdens across all age groups Statistics Canada.
In summary, while easing borrowing costs have helped, the Q1 2025 figures paint a deeply uneven economic portrait: moderate income and wealth growth overall, but stark divergence between the haves and have‑nots—especially in real estate exposure and investment returns.
