Income Inequality in Canada Grows in Q3 2025, Reports StatCan

Income inequality in Canada intensified in the third quarter of 2025, as detailed in a report from Statistics Canada released on Thursday. The findings reveal a troubling trend, with the income gap between the wealthiest and lowest earning households widening. The income disparity registered at 47.5 percentage points, an increase from 46.3 points in the same quarter the previous year, and slightly down from a record high of 48.4 percent recorded in the second quarter of 2025.

The report highlights that lower-income households faced significant challenges due to declining interest rates and a decrease in self-employment income. In contrast, middle-income households saw their net savings worsen, primarily due to subdued wage growth. Statistics Canada noted, “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 Canadians

The wealth gap also became more pronounced, as strong financial market gains disproportionately benefitted wealthier households. In the third quarter of 2025, the wealthiest households accounted for 65.5 percent of Canada’s total net worth, averaging $3.5 million each. In stark contrast, the least wealthy households represented only 3.1 percent of total net worth, with an average of $82,100 per household.

Additionally, the wealthiest households experienced the fastest growth in net worth, increasing by 6.3 percent. This surge was attributed to a robust rise in the value of their financial assets. In terms of wages, the average increase was recorded at 2.7 percent, a decline from 3.4 percent during the same period last year.

The data indicates that the lowest income households, specifically those in the bottom 20 percent of income distribution, did not experience any growth in their average disposable income. Conversely, households in the top 20 percent saw a significant rise in wealth, driven by increases in both wages and self-employment income.

Demographic Insights on Wealth and Debt

Among younger Canadians, specifically those aged 35 years or younger, wealth grew at the fastest rate of any age group in the third quarter, increasing by 7.4 percent. This rise is attributed to a substantial increase in the value of their financial assets. Furthermore, younger households successfully reduced their debt-to-income ratios by 1.3 percentage points, now standing at 167.2 percent.

In contrast, Canadians aged 35 to 44 years reported the highest debt-to-income ratio during the quarter at 245.4 percent, albeit a drop of 3.9 percentage points from the previous year. The report emphasized that these reductions were due to strong income gains that outweighed debt accumulation.

The findings from Statistics Canada underscore the growing divide in income and wealth among Canadians, highlighting the need for targeted policies to address these disparities. As the economic landscape continues to evolve, understanding these trends will be crucial for fostering a more equitable society.