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Economic News

Canada: Strong Financial Markets Drove Household Wealth Higher, Highlighting Persistent Inequality

September 11, 2026
Kari Norman
Senior Economist

Highlights

  • Canadian households were more prosperous on average in Q2 2026 as net wealth rose 2.9% q/q in the quarter (up $546.3B to $19.1T)—marking eleven consecutive quarterly increases. This gain was supported by an increase in financial assets (+4.5% or $540.7B). Non-financial assets also increased in Q2 (+0.5% or $48.9B), led by residential real estate (+0.8%). This was slightly offset by higher household liabilities (+1.3%) such as mortgage and non-mortgage debt.
  • Household borrowing slowed by $5.0B in Q2 to $29.4B. Beneath the surface, mortgage demand slowed for the second consecutive quarter to $19.4B—the slowest pace of borrowing in over two years—while non-mortgage debt, including consumer credit, slowed $2.3B to $10.0B.
  • Household credit market debt rose to $3.28T in Q2. At the same time, following six consecutive quarterly increases, debt relative to household disposable income eased to 176.4%. This was the largest decline in nearly two years and kept the debt ratio below the historic high of 188.2% reached in Q3 2022 (graph 1). Despite this improvement, 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—declined to 14.5% as income growth (+2.1%) outpaced growth in total debt payments (+1.0%). It remained below its 15.1% peak in Q1 2023. Mortgage principal payments eased slightly (-0.4%) following two years of increases. Mortgage interest payments rose 1.6%, the largest increase in two years. Despite this, the mortgage-only debt service ratio eased slightly to 7.7% in Q2—below the record high of 8.2% in Q1 2023 but still elevated (graph 2).

Comments

Household net worth continued to rise in Q2 2026, supported primarily by gains in financial markets. However, the benefits weren’t evenly distributed across households. More than two-thirds of financial assets are held by households in the highest wealth quintile, meaning much of the increase in financial wealth accrued to higher-wealth Canadians.

At the same time, substantial federal transfers External link. to low- and middle-income households pushed disposable income up 8.8% q/q annualized, outpacing growth in household spending External link. in Q2. As a result, the household savings rate was lifted to 3.7%.

Implications

Amid modest employment External link. gains year to date, real wage growth continued as wage gains outpaced inflation in Q2. At the same time, higher oil prices added to inflationary pressures External link. in Q2 and are likely to continue doing so in the near term, which could weigh on real wages and household savings going forward. Longer-term bond yields have also moved higher, pushing up borrowing costs. With risks to the inflation outlook remaining two-sided—higher energy prices and counter tariffs on the upside and potential weaker economic growth on the downside—the Bank of Canada External link. once again kept the policy rate unchanged last week. We continue to expect policy rates to remain on hold through the end of 2026.

NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.