Canadian-Born Wealth Falls Behind Immigrants After Real Estate Bubble

Being Canadian-born isn’t the wealth advantage many assume, according to a new study. Statistics Canada (StatCan) researchers compared Canadian-born households with established immigrants who had lived in the country for at least 10 years. They found the immigrant group came out ahead across every wealth quartile, though the gap narrowed at the top. The difference was driven almost entirely by Canada’s real estate bubble in its largest cities.

Canadian Wealth Disparity Is Non-Existent Among The Rich

Canadian-born and established immigrant wealth wasn’t very different. Canadian-born households aged 35-64 years old in the fourth quartile of wealth—the top 25% of households—had an average net-worth of $2,908,900. They found a ratio of 1.0, meaning there’s no statistically significant gap (-$4,600) for the upper quartile of established immigrants, those who arrived at least 10 years before the survey period. The ratio drops for the third quartile of wealth to 0.94, but is still considered statistically insignificant: Canadian-born at $916,200 vs established immigrants at $973,900. 

The average wealth may not be different for the upper half, but how they got there is. The fourth quartile of Canadian-born households held $649,800 in employer-sponsored Registered Pension Plans (RPPs), 69.0% (+$265,400) more than established immigrants. Canadian-born households in the third quartile held $288,200 in RPPs, 79.1% (+$127,300) more than established immigrants. To be blunt, Canadian-born households had better jobs—with benefits. 

Established immigrants closed the gap with real estate. Those in the fourth quartile had $1,070,300 in primary home equity, 48.9% (+$351,700) more than Canadian-born households. In the third quartile, established immigrants had $542,000 in home equity, 65.9% (+$215,300) more than Canadian-born households. Real estate effectively closed the wealth disparity gap, but the researchers note there’s a catch. 

“Place of residence accounted for about four-fifths (81%) of the observed difference in home equity between established immigrant and Canadian-born families in the fourth quartile,” notes StatCan researchers. That gap was smaller for those in the third (53%), but still massive.  

In plain English? It wasn’t just real estate that closed the gap—the timing and credit bubble did. Established immigrants were more concentrated in real estate because they’re physically concentrated in more expensive markets (Toronto and Vancouver). Simply being able to afford a home and paying your mortgage in a major city pre-frothy valuations was enough to offset a lack of employer benefits. 

Keeping this gap closed may be harder than many expect. A lack of diversification compounded returns on the way up, but compounding works both ways. 

The headline data makes life in the bottom half seem a little more unequal. Canadian-born households in the second quartile had an average net worth of $348,500, 18.2% (-$77,500) lower than that of established immigrants. This disparity widens for the lowest quartile, with Canadian-born households averaging $39,900, 19.7% (-$9,800) less than established immigrants.  

“In relative terms, Canadian-born families had about 20% less wealth than established immigrant families in both the first and second quartiles,” writes the agency. They note this is “largely because of greater home equity.”

Once again, home equity skews these numbers. Canadian-born households in the second quartile had an average of $141,300 in primary home equity, 42.7% (-$105,100) behind established immigrants. Those in the first quartile had $13,000 in primary home equity, 42.7% (-$9,700) lower than established immigrants. The better employer benefits help to partially offset the gap, but it remains statistically significant. 

It’s also important to remember that statistically significant doesn’t mean material. In the second quartile, the additional home equity held by established immigrants still amounts to less than a down payment on a single-family home in major immigrant hubs such as Toronto and Vancouver. In the lowest quartile, a 42.7% equity gap sounds substantial—but for either group, the difference is worth less than six months of average rent for a two-bedroom apartment in Canada. This isn’t much of a wealth gap; it’s evidence that half the country is left behind. 

The larger problem is more apparent in the upper half of the wealth distribution. Established immigrants only narrowed the gap because they were more exposed to the real estate bubbles in Canada’s largest cities. That makes their progress fragile, tying their gains to the cost-of-living challenges that young adults face—regardless of whether they’re Canadian-born or established immigrants.