Income and wealth inequality among Canadian households is increasing at record speed amid inflation and rising interest rates, and younger households are bearing the financial burden, a new report from Statistics Canada shows.
The wealthiest 20 per cent of households controlled more than two-thirds — nearly 68 per cent — of the total net worth in Canada in the first quarter of 2023, while the least wealthy 40 per cent accounted for 2.7 per cent,The gap in net worth between the most and least wealthy increased 1.1 percentage points in the first quarter relative to the same time a year before, marking the fastest increase on record.
For younger homeowners rising interest rates mean “their mortgages are becoming more expensive and at the same time they’re not necessarily making more income, increasing that debt-to-income ratio,” Petit said. Although households of younger workers may have increased their income over the years, “high inflation and interest rates continued to restrain their ability to make ends meet, as these households tend to hold higher balances on credit cards and mortgages relative to older age groups,” StatCan said in the report.
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