StatCan says Canada’s income and wealth gaps grew wider as market gains favoured the rich. If you’re falling behind, here’s what to do now

“In 2025, the gaps grew through assets rather than paycheques,” Giovanni Gallipoli, a Professor at the University of British Columbia’s Vancouver School of Economics, told Money.ca.

Household net worth increased by 5.3% overall, entirely because of a 9.9% gain in financial assets, mainly from equity markets. Real estate assets, by contrast, declined by 0.7%.

The wealth gap is increasingly about what you own

“All of the growth in household net worth came from financial assets, mostly equities, while real estate stagnated,” Gallipoli noted.

Households that already own investments are better positioned to benefit when markets rise. The net worth of the wealthiest 20% grew by 6% in 2025, compared with 2.1% for the least wealthy 40%.

Income disparities also widened. Disposable income grew by 4.1% for the highest-income 20% of households, compared with 2.6% for the lowest-income 20%.

But earnings are only part of the equation. Gallipoli says food and shelter account for about half of all spending among the lowest-income fifth of households, compared with roughly a quarter for the highest-income fifth. That leaves less room to save, invest or absorb unexpected expenses.

The figures cover 2025 and do not reflect subsequent developments, including this year’s oil-price spike, new U.S. tariffs or the Bank of Canada’s October rate increase.

Regional economic disparities offer another perspective. A recent Institut du Québec report, found that Quebec’s regions outside Montreal had reached 99% of Ontario’s GDP per capita outside Toronto by 2022. Montreal, meanwhile, remained at about 80% of Toronto’s.

The findings suggest that economic performance varies considerably across the country, even within neighbouring provinces. While GDP per capita doesn’t tell us how wealth is distributed among households, it highlights another dimension of the economic divide: where people live can shape the economic opportunities available to them.

The squeeze on middle-income households

The pressure isn’t confined just to Canada’s lowest-income households. Gallipoli identifies the second-lowest income group as particularly vulnerable, with many caught between earning too much to qualify for income-tested support and too little to build meaningful savings.

Statistics Canada found that average net saving for this group deteriorated by 7.9% in 2025. Disposable income grew by 2.3%, while consumption spending increased by 3.8%. The agency suggests some households may be borrowing to make up the difference.

“They often earn too much for income-tested support and too little to build a cushion, so a job loss or a mortgage renewal can push them into debt,” Gallipoli says.

Younger households face another challenge. They tend to carry more debt relative to income and have had less time to accumulate assets. That leaves them with less financial breathing room when borrowing costs rise or an unexpected expense arrives.

What can you do if you’re struggling to get ahead?

The economic forces behind inequality aren’t something an individual household can fix with a tighter budget. But CPA and financial educator Lianne Hannaway says there are practical ways to strengthen your position, even with limited savings.

“Start with a small buffer, like one month’s essential living expenses, then capture any employer match as it is essentially free money,” Hannaway told Money.ca.

Once that initial cushion is in place, she recommends tackling high-interest debt while continuing to build emergency savings. Gallipoli agrees, noting that “no safe investment earns the 20% charged on credit cards.” Keeping some money aside for essentials can also prevent an unexpected bill from going straight back onto a credit card.

Hannaway advises focusing on major expenses rather than obsessing over small purchases.

“Look for your $10,000 problems, not your $10 ones,” she says. “Skipping a coffee won’t change your trajectory.”

That could mean reviewing housing costs, renegotiating a mortgage or reconsidering expensive children’s activities.

If you have money left to invest, Hannaway recommends automating small, consistent contributions to diversified, low-cost exchange-traded funds (ETFs). A Tax-Free Savings Account (TFSA) can offer flexibility for people on modest incomes, while Registered Retirement Savings Plans (RRSPs) may become more tax-efficient as income rises.