As last year came to a close, the richest Canadians saw their investments grow, while lower-income households saw their wages decline, according to the latest economic numbers from Statistics Canada.
The national statistics agency released new information on the wealth of Canadians for the final three months of 2024 on Monday, showing the income gap is widening.
The wealth gap has been widening ever since the pandemic, and while the pace of that widening slowed slightly in the fourth quarter of 2024, the wealthy are still decidedly getting ahead while the bottom 40 per cent of earners fall behind.
Statistics Canada tracks the wealth gap, defined as the difference in disposable income between the top 40 per cent of households and the bottom 40 per cent, and right now pegs it at 47.1 percentage points — up from 39.7 in 2020.
The Bank of Canada steadily cut interest rates in the second half of 2024, but even though it became easier to borrow money the economy still didn’t rebound. And the weak job market may be to thank — particularly in the manufacturing and transport sectors.
For the poorest households in the bottom 20 per cent of earners in the country, wages actually fell.
“Labour market conditions weakened in 2024 as overall wage earnings grew at the ‘slowest annual pace since the COVID-19 pandemic-induced shutdowns in 2020’,” Statistics Canada said in its brief.
But there is hope as the housing market turned to favour buyers more, on average, across the country. As interest rates eased, many households made wealth gains from buying or owning a home.
“This is in stark contrast to a few years ago, when the wealth gap increased as the more prohibitive cost of mortgage financing outweighed the benefit of owning a home,” Statistics Canada said.
“On average, the least wealthy were less able to engage in the housing market from 2022 to 2023 amid rising interest rates and peak home prices that made owning a home less affordable.”
As well, middle and low income Canadians are finding ways to cut spending. That’s evidenced by debt service ratios stabilizing.
Financial concerns have only become more pronounced since the calendar flipped to 2025, with the U.S.’ tariff saga stoking fears about cost of living.
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