Statistics Canada’s latest financial security survey highlights a significant wealth gap between homeowners and renters, particularly among families with the main earner aged 55 to 64. Home-owning families in this age group with an employer-sponsored pension had a median net worth of $1.4 million, while renters without a pension had a median net worth of $11,900. The data also shows that owning a home was a major factor in wealth accumulation, with those who owned homes but did not have a pension having a median net worth of $914,000, compared to $359,000 for those with a pension but did not own a home. The survey findings reflect the growing importance of real estate as an asset class for Canadians of all income levels.
Dan Skilleter, director of policy at Social Capital Partners, notes that the survey underscores the trend of Canadians increasingly viewing real estate as an essential stepping-stone to financial security. The gap in wealth between homeowners and renters is even more pronounced for families with the main earner under 35, with homeowners having a median net worth of $457,100 compared to $44,000 for renters. Interestingly, Statistics Canada found that a growing number of renters are investing in real estate beyond their principal residence, with 15 percent of renters without pensions reporting a net worth above $150,000 in 2023, up from five percent in 2019. The survey also revealed that the median net worth of Canadian households had risen to $519,700, a 57 percent increase from 2019.
The survey, which involved a detailed questionnaire sent to a sample of almost 40,000 households, offers a comprehensive view of families’ financial assets and debts. However, it has a significant blind spot when it comes to capturing the wealth of Canada’s richest families. Statistics Canada divides the survey into tiers to ensure representation from various household categories, but the wealthiest five percent in Canada are the highest tier included in the survey. This means that ultra-high net worth individuals, such as billionaires, are not adequately represented in the data. As a result, the survey fails to provide a complete picture of wealth concentration in Canada.
Skilleter points out that Statistics Canada’s survey lacks the granularity needed to accurately assess wealth concentration and inequality in Canada. By not capturing data from the top one percent and 0.1 percent of the wealthiest individuals, the survey underestimates the share of wealth held by these groups. Comparisons with data from sources like the Forbes rich list suggest that the top one percent may actually hold a much larger share of overall wealth than indicated by the survey. Skilleter emphasizes the importance of accurately reflecting wealth ownership in discussions about public policy interventions to address economic disparities.
To address the limitations of the survey in capturing the wealth of Canada’s richest families, Skilleter suggests mirroring the approach taken by the U.S., which includes a separate tier for billionaires in its wealth survey. This would provide a more accurate picture of economic inequality and allow for a more nuanced discussion on policy interventions to improve people’s lives. By incorporating data from external sources like the Forbes rich list, policymakers can gain a better understanding of wealth distribution and take targeted actions to promote greater financial inclusion and reduce inequality.
