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Economic News

Canada: Household Wealth Climbs Amid Ongoing Debt Challenges

March 16, 2026
Kari Norman
Senior Economist

Highlights

  • Canadian households were more prosperous in Q4 2025 as net wealth rose 1.3% q/q in the quarter (up $230.2B to $18.6T)—the ninth straight quarterly increase. This gain was largely supported by an increase in financial assets (+2.5% or $296.9B). This was slightly offset by higher household liabilities such as mortgage and non-mortgage debt (+1.0% or $33.0B) and a modest decline in residential real estate value of -0.4%.
  • Household borrowing slowed to $36.2B in Q4. Beneath the surface, mortgage demand rose to $28.7B while non-mortgage debt, including consumer credit, fell to $7.5B from $10.6B in Q3.
  • Household credit market debt surpassed $3.2T in Q4. Relative to household disposable income, the debt ratio rose for a fifth consecutive quarter, reaching 177.2%, 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—edged down to 14.57%, but still close to its 15.1% peak in Q1 2023. Mortgage principal payments increased for the seventh consecutive quarter (+1.0%), while mortgage interest payments dipped (-0.6%). The mortgage-only debt service ratio eased slightly to 7.8% in Q4—below the record high of 8.2% in Q1 2023 but still elevated (graph 2).

Comments

Stock market gains eased off their breakneck speeds in Q4 2025, with the S&P/TSX Composite rising 5.6% and the S&P 500 a more modest 2.4%. Throughout last year, the S&P/TSX posted a strong 28.2% gain—the largest annual increase since 2009—while the S&P 500 rose 16.4%. These gains would have accrued disproportionately to higher wealth households in Canada, as the wealthiest 20% continued to hold nearly two thirds of all financial assets. The weaker investment earnings paired with softer income growth contributed to a decline in the savings rate External link. in Q4 to 4.4% from 5.2%. Household spending External link. increased in the quarter, driven mainly by higher expenditures on rent and services.

Implications

Looking ahead, higher mortgage payments at renewal remain a central concern for many households and are likely to restrain consumer spending while supporting elevated savings in the near term. Despite employment losses External link. in early 2026, wage growth has strengthened and continues to outpace inflation. With higher oil prices External link. expected to impact inflation, financial markets have shifted from anticipating rate cuts to considering the possibility of rate hikes in Canada. Longer-term bond yields have risen somewhat as a consequence, pushing up borrowing costs. Even so, the weak labour market data at the start the year should help reduce pressure on the Bank of Canada to pre-empt what may prove to be a temporary, albeit highly uncertain, supply shock. The Bank must also weigh the downside risks associated with the upcoming Canada‑United States‑Mexico Agreement (CUSMA) review External link.. As a result, we continue to expect policy rates to remain on hold for the foreseeable future.

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.