Canadian household wealth grew last year, but so did inequality. Statistics Canada (StatCan) data shows the average household net worth rose in Q4 2025. However, the rich had a different read on the economy that helped their share grow much faster. While the rich racked up stocks and pumped the brakes on mortgage debt, the bottom 40% hit the gas for mortgage debt. The result is a widening gap between the haves and have-debts.
Canadian Household Wealth Rose, But Not Due To Housing
Canadian households saw their average net worth rise to $1.08 million in Q4 2025, 5.3% (+$53.9k) higher than last year. The gain is driven by 9.9% y/y growth in household financial assets, primarily due to equities. Despite the average household growing its mortgage debt by 4.2%, real estate assets fell 0.7%. As stock market exposure is even more concentrated than housing, only one group won.
Canada’s Wealthiest Households Capture A Bigger Share of Wealth
Canadian household wealth: Average net worth per household, by wealth quintile.
Source: StatCan; Better Dwelling.
Any wealth boom tends to favor those who are best positioned to capture it, and that’s usually the rich. Canada’s wealthiest 20% of households saw their average net worth climb to $3.54 million in Q4 2025, up 6.0% (+$201.4k) y/y. The bottom 40% of households saw their net worth rise to $81.7k, up 2.1% (+$1.7k) over the same period. Yup, the top households gained 120x more than the bottom 40%, adding more than double their total net worth.
The wealthiest households don’t just have more wealth, they’re allocating differently. The top 20% saw financial assets grow 10.8% y/y, gaining 0.9 points more than average. In contrast, the bottom 40% saw their financial assets grow only 6.1%, falling further behind.
A gap was also seen in how they approached mortgage debt and housing. The wealthiest households increased their mortgage debt 0.7% y/y, while the bottom 40% added 7.5% over the same period. Those with the least wealth piled into mortgage debt at 10x the rate of the wealthiest. A problem made worse by the least wealthy households seeing real estate assets rise only 3.5% on average.
Canada’s Rich Capture Biggest Share of Wealth Since 2020
Canadian household wealth: Share of total household net worth held by the top 20% by wealth.
Source: StatCan; Better Dwelling.
The result is a wealth gap hitting its widest point in years. The top 20% by wealth held 65.7% of the country’s net worth in Q4, up 0.9 points to the highest since Q3 2020. The bottom 40% collectively represented just 3.0% of total net worth, down 0.1 points from a year prior. It’s worth noting that StatCan combines the bottom 40% in its report, but the bottom 20% represents -0.1% of wealth. That’s right, adding up the net worth of 3.45 million households works out to 0.1% of total wealth in Canada. They would have to save up to have nothing.
Low Rates Contribute To Widening Household Wealth Gap
There are many obvious factors, including investment allocation, income growth, and expenses. Additionally, StatCan notes the role of interest rates.
“Households’ ability to maintain their economic well-being differs with changing macroeconomic conditions. In response to easing inflation, the Bank of Canada’s policy rate stood at 2.25% by the end of 2025, down 1.0 percentage points from a year earlier,” explains StatCan. “While declining interest rates can moderate borrowing costs, they can also lead to lower returns on interest-bearing investments such as savings and deposit accounts, with varying impacts for households across the income distribution.”
That sounds logical, but doesn’t really support the findings they’re presenting, does it? For that to make sense, the bottom 40% of households would have to have excess bond exposure. While this data didn’t cover it, it’s fair to say the class with 3% of national net worth isn’t the lending class. Their exposure to bond yields accounts for a tiny share of all issuance.
StatCan is right that low rates play a role in the widening gap, just not the mechanics. The widening inequality is more related to how rates work and capital cushioning.
Low Rates Help The Rich Expand, Help The Poor Buy Necessities
Most assume lower rates reduce interest costs, leaving more in the pocket of the poor. De Nederlandsche Bank studied low rate shocks over 95 years in 15 countries, and the data didn’t agree. Instead, the Dutch central bank found low rate shocks transfer 1 to 6% of national wealth to the top 1%. Lower rates mean less interest paid, while also helping to increase leverage. If you’re wealthy, that helps you expand your empire. If you’re poor, that helps you pay more to the wealthy for your necessities like housing.
Oh, and those interest savings? The Bank of Canada studied the impact of low rates and housing affordability. They often frame low rates as an affordability tool, but found buyers didn’t save money—they paid more. Low rates increased leverage helping them to more easily absorb price hikes over a 20 year span. People didn’t save money, it removed the friction to paying more, helping to generate bigger loans. A more recent study from the US Federal Reserve echoes those findings.
Then there’s capital cushioning. Have you noticed that policymakers show up with “help,” but only after investors pull back? Like the Clown from IT, holding a mortgage guarantee instead of a balloon? It’s not a coincidence, it’s a risk transfer from low use owners (investors) to high use (families).
Low use owners are high risk for lenders, as they’ll default more easily as they’ll try to cut losses on an investment. High use families don’t default because that’s where they live—they would be homeless. Instead of defaulting, they ride out negative equity, and “cushion” any downturn.
The strategy was openly used when the US housing bubble turned into the 2008 financial crisis. We warned that Canadian policymakers adopted a similar scheme recently. Mortgage delinquencies rising in the wealthiest households revealed risk inversion is happening. The widening inequality based on asset and debt composition confirms it.
This is financial planning 101. If something runs for 20 years, you giggle at the money you made and take a little off the table, reallocate into something else.
The best financial advice you can get is stop taking advice from people who make money selling you products, not giving advice. That’s true if it’s Realtor or a mutual fund salesperson at one of the Big Six pretending to do “advisory.”
If you’re managing your own portfolio, read up as much as possible and don’t get married to your narrative. If you see something you don’t like, don’t automatically dismiss it.
If you don’t know how and aren’t interested, find a fee-only planner and you’ll get a pretty much foolproof plan that you can automate and review in a year. Boggles the mind how many people are willing to pay 5% of their investment for advice, but won’t pay $200 to talk to a planner—probably 0.05% of the money you’re probably investing when you want advice.
A lot of smart people with deep pockets getting burnt right now with the speculative play on precon. They aren’t playing that game again for awhile.
We should start a list of realtors getting sued by the people they advised were “risk free” investments.
Less friction?! The bidding wars and fomo that happened in real estate when rates were low demonstrates why some people never have money. We needed the boc to raise rates earlier to save people from the bad decisions made with less friction. Now the hangover