Wealth gap between rich and poor widens at fastest pace on record in Canada

The top 20 per cent of earners in Canada held 67.8 per cent of the country's net worth, compared with the bottom 40 per cent holding 2.7 per cent.

The wealth gap between the rich and poor in Canada widened at the fastest pace on record in the first quarter of 2023 compared with the year before, according to Statistics Canada, amid high inflation and declining real estate values.

The gap in net worth grew by 1.1 percentage points in that timeframe, the fastest it has grown since 2010, when the agency began keeping the record.

The gap was still lower, though, in the first quarter of this year, when it sat at 65.1 percentage points, compared with 65.6 points in the first quarter of 2020. The wealth gap previously declined 1.6 percentage points between Q1 2020 and Q1 2022.

The top 20 per cent of earners in Canada held 67.8 per cent of the country’s net worth in the first quarter, compared with the bottom 40 per cent holding 2.7 per cent. The difference between those amounts equals the wealth gap.

“Most wealth is held by relatively few households in Canada,” Statistics Canada said in its report released Tuesday.

The least wealthy households tend to be younger, according to the report. Those younger than 45 years old made up 55.2 per cent of the bottom 40 per cent of net worth in Canada, despite making up 36.2 per cent of all households.

Recent economic pressures, such as inflation, have hit the least wealthy harder as well, the report notes, with their wealth down 13.8 per cent in Q1 compared with the same quarter the year before — more than triple the rate of the wealthiest.

The net worth for all households was down in the first quarter of 2023, the report says, and lower real estate prices are mostly to blame.