June 17, 2024

It appears the advertising slogan is true.  Canadians may well be richer than they think.

A recent survey by Statistics Canada shows that household net worth in this country rose to a record high of nearly $17 trillion in the first quarter of this year. That is a 3.3%, or $548 billion, increase over the fourth quarter of 2023 and is the second quarterly increase in a row.

The growth was fed by a 3.6% quarter-over-quarter rise in financial assets and a 2.6% increase in the value of residential real estate.

StatsCan says 90% of all net worth is held by homeowners.

Along with the gains in assets, Canadian households have also diminished their liabilities.

High interest rates have dramatically reduced borrowing, which grew by just 0.3% in Q1.  That combined with income growth that outpaced debt growth saw the household debt-to-income ratio drop to 176%.  That is still high, but it is the fourth consecutive decline in the debt-to-income ratio and it is a notable reduction from the 178% posted in Q4 of 2023.

Canadians are also saving more.  The household saving rate rose to 6.9% in Q1, its highest level in two years.  Canadians tended to put their savings into mutual funds and ETFs.  They parked $23.8 billion in these investments in Q1, more than in all of 2023.