Income Inequality and Wealth Disparity Rise in Canada’s Q3 2025

Income inequality in Canada intensified during the third quarter of 2025, according to a report released by Statistics Canada on October 5, 2025. Following a previous high of 48.4 percent in the second quarter, the income gap has now reached 47.5 percentage points. This figure marks an increase from 46.3 points reported in the same quarter of the previous year.

The study highlighted that lower-income households faced adverse effects due to declining interest rates and reductions in self-employment income. As a result, net savings for middle-income households deteriorated significantly, primarily due to stagnant wage growth. The report stated, “The income gap increased in the third quarter of 2025 as lower-income households were negatively affected by declining interest rates and self-employment income, while net saving worsened the most for middle-income households due mainly to weak wage gains.”

Wealth Disparities Widen Among Households

The wealth gap has similarly expanded, with affluent households now holding 65.5 percent of Canada’s total net worth in the third quarter of 2025. On average, these households possess $3.5 million, while the least wealthy households hold just 3.1 percent of the total net worth, averaging $82,100 per household. Wealthier families also experienced a notable increase in net worth, rising at a rate of 6.3 percent due to significant growth in the value of their financial assets.

Wage growth in Canada averaged 2.7 percent in the third quarter, a decline from 3.4 percent noted during the same period the previous year. The lowest-income households, classified as the bottom 20 percent of income distribution, were the only demographic that did not see an increase in their average disposable income. In contrast, the highest-income households, comprising the top 20 percent, witnessed the most substantial wealth growth, driven by increases in both wages and self-employment income.

Trends Among Younger Households

Interestingly, younger households, specifically those aged 35 years or younger, reported the fastest growth in wealth among all age groups, achieving a remarkable 7.4 percent increase in the third quarter of 2025. This growth is attributed to a strong rise in the value of their financial assets. Alongside this, these households managed to reduce their debt-to-income ratios by 1.3 percentage points, now sitting at 167.2 percent.

In comparison, Canadians aged 35 to 44 years held the highest debt-to-income ratio at 245.4 percent, although this figure reflects a decrease of 3.9 percentage points from the previous year. The report indicated that these reductions were primarily due to robust income gains that outpaced debt accumulation.

Overall, the findings from Statistics Canada reveal a concerning trend of rising income and wealth inequality in Canada, highlighting the challenges faced by lower and middle-income households amidst shifting economic conditions.