Statistics Canada says the gap between Canada’s highest- and lowest-income households widened in the third quarter of 2025. The disposable-income gap between the top and bottom 40 per cent of households rose to 47.5 percentage points, and the top 20 per cent held 65.5 per cent of the country’s total net worth.
The only group that went backwards
The income gap — the difference in the share of disposable income between households in the top 40 per cent and the bottom 40 per cent of the income distribution — reached 47.5 percentage points in the third quarter of 2025, up from 46.3 percentage points in the same quarter a year earlier.
At the bottom, households actually lost ground. Those in the bottom 20 per cent saw their average disposable income edge down 0.5 per cent compared with a year earlier, and were the only group not to post an increase. Statistics Canada says a relatively strong wage gain for that group — up $152, or 5.7 per cent — was offset by reductions in self-employment income, down $67 or 3.4 per cent, and net investment income, down $78 or 16.0 per cent.
At the top, the direction was reversed. Average disposable income for households in the top 20 per cent of the income distribution increased 4.3 per cent compared with a year ago, the largest gain of any group, helped by stronger wages, self-employment income and exposure to equity markets.
Falling rates helped borrowers and hurt savers
The release points to an uneven interest-rate story. In response to easing inflation, the Bank of Canada’s policy rate stood at 2.5 per cent at the end of the third quarter of 2025, down 1.75 percentage points from a year earlier.
Lower rates ease borrowing costs, but they also lower returns on interest-bearing investments such as savings and deposit accounts — exactly the assets lower-income households hold. The lowest-income households saw investment earnings fall $208, or 21.1 per cent, mostly from negative returns on interest-bearing deposits, which outweighed the $130, or 8.8 per cent, they saved on lower interest payments.
Labour income offered less cushion than a year earlier. Wages grew by an average of 2.7 per cent in the third quarter of 2025 relative to a year earlier, down from an annual increase of 3.4 per cent in the third quarter of 2024, with notably weak earnings in goods-producing sectors such as mining, oil and gas extraction and manufacturing.
Saving worsened most in the middle
Net saving worsened on average for all households, as growth in consumption expenditure, at 3.7 per cent, outpaced growth in disposable income, at 2.7 per cent. It worsened most for the middle 20 per cent of the income distribution, where net saving fell 56.6 per cent relative to the third quarter of 2024, as consumption growth of 4.2 per cent ran well ahead of disposable income growth of just 0.7 per cent.
Two-thirds of net worth at the top
The wealth gap grew alongside the income gap, as strong financial market gains benefited the wealthiest. Households in the top 20 per cent of the wealth distribution held 65.5 per cent of Canada’s total net worth in the third quarter, averaging $3.5 million per household, and their net worth also grew at the fastest pace, at 6.3 per cent, on the strongest growth in the value of their financial assets.
Those in the bottom 40 per cent accounted for just 3.1 per cent of total net worth, at an average of $82,100 per household. The wealth gap between the two groups was 62.4 percentage points in the third quarter of 2025, up 0.5 percentage points from a year earlier.
The figures, from Statistics Canada’s Distributions of Household Economic Accounts released Jan. 29, 2026, describe an economy in which the same conditions — cheaper money, softer wage growth and rising markets — are pushing households in opposite directions depending on where they start.
