Income gap slows, but financial strain persists for low-income Canadians: StatsCan
Canada's latest household economic data shows a mixed picture: while income inequality continues to grow, the pace of widening has slowed, offering a narrow window for targeted policy relief.
According to Statistics Canada, the income gap between the top and bottom 40% of earners rose to 47.1 percentage points in 2024, up just 0.5 points from 2023 — slower than the 2-point increases seen in prior years.
This shift comes as the Bank of Canada cut interest rates from 5.0% to 3.25% over the year, easing inflation and reducing debt servicing costs. Interest payments grew just 9.0% in 2024, compared to a 52.8% jump in 2023.
However, low-income households saw wages fall 3.3%, with job losses concentrated in manufacturing and transport. In contrast, high-income households gained most from investment income, pushing their disposable income up 5.9%.
Falling mortgage rates and modest home price gains helped the least wealthy grow their net worth by 8.8%, outpacing all other groups. This reversed a trend from recent years when rising rates shut many out of the housing market.
The wealth gap held steady at 61.5 percentage points, with the top 20% still holding nearly two-thirds of total net worth.
Younger households (<35) reduced mortgage debt and lowered their debt-to-income ratio significantly (from 175.3% to 160.8%), while older Canadians increased mortgage borrowing, possibly to support younger relatives or invest in property.
