- Kari Norman
Senior Economist
Economic News
Canada: Rising Household Wealth Driven by Financial and Real Estate Gains
June 12, 2026
Highlights
- Canadian households were more prosperous on average in Q1 2026 as net wealth rose 1.3% q/q in the quarter (up $243.1B to $18.6T)—the tenth consecutive quarterly increase. This gain was supported by an increase in financial assets (+1.3% or $148.0B). Non-financial assets also increased in Q1 (+1.1% or $108.6B), following two consecutive quarterly declines, led by residential real estate (+1.3%). This was slightly offset by higher household liabilities (+0.4%) such as mortgage and non-mortgage debt.
- Household borrowing edged up to $35.5B in Q1. Beneath the surface, mortgage demand slowed to $22.6B while non-mortgage debt, including consumer credit, rose to $12.9B from $8.1B in Q4.
- Household credit market debt surpassed $3.25T in Q1. Relative to household disposable income, the debt ratio rose for a sixth consecutive quarter, reaching 179.6%, though it remained below the historic high of 188.2% reached in Q3 2022 (graph 1). Canadian households continue to stand out as the most highly indebted in the G7.
- The household debt service ratio—the share of disposable income directed toward debt payments—ticked up to 14.75% following two quarterly declines but remained slightly below its 15.1% peak in Q1 2023. Mortgage principal payments increased for the eighth consecutive quarter (+0.6%). Mortgage interest payments increased (+0.9%) following two consecutive declines, pushing up the interest-only debt service ratio slightly. The mortgage-only debt service ratio ticked up slightly to 7.8% in Q1—below the record high of 8.2% in Q1 2023 but still elevated (graph 2).
Comments
Stock market gains continued in Q1 2026, with the S&P/TSX Composite rising 3.3% in the quarter led by energy and mining stocks. In 2025, the S&P/TSX posted a strong 28.2% gain—the largest annual increase since 2009—while the S&P 500 rose 16.4%. Nominal household spending External link. increased in the quarter, driven mainly by higher expenditures on food and financial services. This, paired with more subdued investment earnings, more than offset the gain in compensation of employees, resulting in a decline in the savings rate in Q1 to 3.5%—the lowest rate since Q1 2024.
Implications
Despite employment losses External link. in early 2026, wage growth strengthened and continued to outpace inflation, supporting real wage gains. But with higher oil prices External link. impacting inflation in Q2 and likely beyond, household savings may be more subdued than last year. Financial markets have also shifted from anticipating rate cuts to considering the possibility of rate hikes in Canada. Longer-term bond yields have risen somewhat as well, further pushing up borrowing costs. But given the two-sided risks to the inflation outlook—higher energy prices on the upside and sluggish economy on the downside—the Bank of Canada External link. once again kept the policy rate unchanged earlier this week. We continue to expect policy rates to remain on hold for the rest of the year.