The income gap in Canada remains at a “record high,” according to newly released data, which highlights the growing divide between the wealthiest groups and those struggling with affordability — especially the youngest households.
In addition, the wealthiest households continue to hold the vast majority of all wealth in Canada, and that trend continues to grow.
This comes as multiple reports show that unemployment is on the rise in Canada, and as households continue to struggle with the cost of living and housing affordability.
The trade war with the United States and President Donald Trump’s tariff policies have also increased the economic challenges facing Canadian businesses and households alike, with higher costs for goods and services one of the main effects.
According to Statistics Canada, during the second quarter of 2025, from April through June, the income gap remained at an all-time high of 48.4 per cent — the same as in 2024 as the economy continues to face challenges.
“The income gap remained at a record high in the second quarter of 2025, unchanged from the previous year, amid a weakening economy that negatively affected household income and net saving across the income distribution,” Statistics Canada said in the report.
“The wealth gap grew as strong financial market gains benefited the wealthiest, while a decline in real estate values weighed on the average wealth of younger age groups and the least wealthy.”
The agency says the income gap is a measure of the distribution of disposable income across the country, specifically the difference between households with the top 40 per cent of disposable income compared with the bottom 40 per cent.
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Disposable incomes, the amount of money a person or household has left over after all taxes and mandatory charges, did increase in the second quarter of 2025 by 3.9 per cent compared with last year, but that compares with a 5.9 per cent increase in 2024 compared with 2023.
As costs for goods and services increase with inflation, measured by the consumer price index, that means those disposable income gains may be worth relatively less than last year.
How does the jobs market factor in?
Statistics Canada highlights how income growth may be slowing because of a cooling economy and labour market.
“Weak employment gains along with a downturn in economic activity contributed to a slower increase in disposable income for households in the second quarter,” Statistics Canada says in its report.
“Data from the Labour Force Survey show that the employment rate—the proportion of the employed population aged 15 and older—has been on a downward trend since early 2023, with most employment gains derived from part-time work.”
Data also shows that the more wealth a household has in Canada, the more its net worth has grown compared with lower-wealth households.
According to the agency, the wealth gap between the top 20 per cent and the bottom 40 per cent of households reached 61.5 per cent — up 0.2 per cent from last year.
In the second quarter, Statistics Canada also says households making up the top 20 per cent of all wealth distribution in Canada accounted for 64.8 per cent of all of the country’s net worth — averaging $3.4 million per household.
At the same time, the least wealthy households accounted for just 3.3 per cent of Canada’s total net worth — averaging $86,900.
Overall, Statistics Canada says Canada’s household net worth increased 4.5 per cent in the second quarter compared with last year, with wealthier groups seeing the majority of these gains.
The agency notes the increases were mainly from financial assets like stocks, with a 9.1 per cent gain, while real estate values declined by one per cent.
Statistics Canada says those under 35 years old increased their wealth by 2.1 per cent in the second quarter, which was slower than any other age demographic.
This follows multiple other reports that younger Canadians are grappling with significant unemployment and struggling with the heightened cost of living.
Although the data shows mortgage debts for the youngest households are steadily declining, the agency says this is likely because many are putting off the idea of owning a home.
“Households in the youngest age group may be reducing their mortgage balances for various reasons. Prospective homeowners may be turning away from the housing market due to affordability concerns,” Statistics Canada says in its report.
“Some of the youngest households may be prioritizing coping with the cost of living and reducing their debt obligations when financial support from family or other sources becomes available.”
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