The wealthiest 20% of households controlled nearly 68% of the total net worth in Canada in the first quarter of 2023, while the least wealthy 40% accounted for 2.7%.
Core working-age households also experienced unprecedented increases in their debt-to-income ratios, reaching 275.8 per cent for households aged 35 to 44 years — up 16.6 percentage points from a year earlier — and reaching 260.6 per cent for households aged 45 to 54 years, a 20.5 percentage point jump.
Although households of younger workers may have increased their income over the years, “high inflation and interest rates continued to restrain their ability to make ends meet, as these households tend to hold higher balances on credit cards and mortgages relative to older age groups,” StatCan said in the report.
Least wealthy households were most affected by the recent economic pressures, seeing their net worth decrease by 13.8 per cent compared with the same quarter last year, and more than triple the rate of decrease for the wealthiest, according to StatCan. Average net worth decreased the most for households aged less than 35 years, down 8.7 per cent from a year before, compared with a decrease of 1.8 per cent for households aged 55 to 64 years.
And the drop in net worth for all households was due “almost entirely” to real estate, the agency said, as the average value of real estate held by households declined by 8.6 per cent compared with a year ago.
Statistics Canada in June reported that Canadians owed $1.85 for every dollar of disposable income in the first quarter of 2023. And Canada has the highest level of household debt in the G7, according to the Canadian Mortgage and Housing Corp., with mortgages making up around three-quarters of that debt.
“Persistently high interest rates and inflation are likely to continue to strain households’ ability to make ends meet without going further into debt, especially vulnerable groups, such as those with the lowest income, the least wealth and those of younger age groups,” StatCan said.
