Strong asset growth among bottom 40% and under-35s reshapes Canada’s wealth divide post-pandemic
Canada’s wealth inequality has narrowed to its lowest level on record following significant post-pandemic gains among younger Canadians and households with lower net worth, according to a new analysis.
The gap between the share of wealth held by the top 20% of households and the bottom 40% shrank by five percentage points between 2019 and 2023, marking a historic improvement in wealth distribution.
Households in the bottom 40% saw their average net worth surge 76% during that period — more than seven times the pace of growth recorded by those in the top wealth bracket.
Mekdes Gebreselassie, Economic Analyst at TD Economics, said a unique mix of pandemic-era conditions enabled financially constrained households to build assets more quickly than wealthier Canadians. Government income supports, low borrowing costs, strong market performance and financial help from family members all contributed to the shift.
Housing market participation was a major driver of the gains. While mortgage borrowing increased, asset growth among lower-wealth households outpaced the rise in liabilities, allowing many to benefit from higher property values.
Wealth accumulation among the richest 20% was comparatively muted, rising by about 10% over the same period. Although real estate equity continued to underpin asset growth, declines in pension wealth and evolving retirement savings patterns weighed on overall gains, particularly among older households.
Younger Canadians were among the biggest beneficiaries of the trend. Households led by individuals under 35 recorded an 81% jump in net worth between 2019 and 2023 — far outstripping the roughly 11% increase seen among older cohorts.
As a result, younger households now hold a larger share of the country’s wealth even as their population share has edged lower.
The data also highlight the growing role of intergenerational financial support. Rising mortgage debt among Canadians aged 55 to 64 suggests many may have leveraged home equity or taken on additional borrowing to help younger family members enter the property market.
Family wealth transfers also played a meaningful role. The average real value of inheritances received by under-35 households climbed 45% over the period, helping drive a seven-percentage-point increase in homeownership rates for this group — well ahead of the modest gains recorded across the broader population.
Despite the progress, the narrowing trend appears to have levelled off, with wealth distribution measures holding steady into the third quarter of 2025. Persistent affordability challenges and elevated living costs could limit further improvements if they continue to discourage younger Canadians from entering the housing market.
