Income and wealth gaps increased in 3rd quarter of 2025: StatCan

Income inequality in Canada grew in the third quarter of 2025, according to a Statistics Canada study released on Thursday.

That comes after second-quarter results released in the fall showed the income gap at a then-all-time high of 48.4 per cent — the same as in 2024.

The agency measured the difference between households in both the top and bottom 40 per cent of income distribution, finding that the income gap in the third quarter of 2025 sat at 47.5 percentage points, up from 46.3 points from the same quarter a year prior.

“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,” said Statistics Canada.

“The wealth gap grew as strong financial market gains benefited the wealthiest.”

The wealthiest households accounted for 65.5 per cent, nearly two-thirds of Canada’s total net worth in the third quarter of 2025, averaging $3.5 million per household. Meanwhile, the least wealthy households accounted for just 3.1 per cent of total net worth, averaging $82,100 per household.

In addition, the wealthier households also saw a boost to their net worth at the fastest pace (6.3 per cent) as they had “the strongest growth in the value of their financial assets.”

It was also found that wages grew by an average 2.7 per cent in this quarter, compared to the same time a year prior at 3.4 per cent.

The agency also stated that the lowest income households (the bottom 20 per cent of income distribution) were the only group that did not grow their average disposable income.

On the other hand, the highest income households (the top 20 per cent of income distribution) saw wealth rise at the “strongest pace” in the third quarter of 2025, as a result “increases in both wages and self-employment income.”

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Younger households — people 35-years old or less — saw their wealth grow at the quickest rate of any age group in the third quarter of 2025 at 7.4 per cent, which the reports states is a result of “a strong increase in the value of their financial assets.”

Younger households also reduced debt-to-income ratios by 1.3 percentage points, currently sitting at 167.2 per cent.

Canadians aged 35 to 44 years old had the highest debt-to-income ratio in the third quarter at 245.4 per cent, down 3.9 percentage points the year prior.

The report cited these reductions “were due to strong income gains that outweighed debt accumulation.”