How do you know if you’re doing well financially? Maybe you have a home to your name that’s appreciating in value. Or perhaps you rent and live in the city but make all your car loans, credit card, and rent payments on time. Both sound like good financial pictures, but knowing your net worth helps you see the bigger picture. Net worth acts like a bird’s eye view of your personal financial landscape. So, what’s the average Canadian net worth? We’ll talk a close look in this article.
Table of contents
What is Net Worth?
Net worth is the value of all your assets minus the value of all your liabilities. Assets most commonly include:
- Cash savings
- Securities like stocks, ETFs and mutual funds
- Businesses and equity in a business
- Real estate property and home equity
Your assets might include physical possessions as well, like cars, jewelry, art, and furniture. Of course, your $19.99 tablecloth isn’t typically included in the calculation of net worth.
Liabilities refer to all your debt. This includes:
- Credit card debt
- Car loans
- Student loans
- Mortgage debt
- Lines of credit balances
- Taxes owed
- Payday loans
With this in mind, you might look at someone with a $1 million property in Toronto and assume they have a high net worth. But what’s their credit card debt like? What’s the balance of their mortgage? Do they have a second mortgage on their property? These are all liabilities that could reduce their net worth.
Similarly, you might see someone with a whopping $50,000 of credit card debt. Even if the debt collectors call, you can’t know for certain that they have a low net worth. All they need are a couple of high-end paintings, a Mercedes, and paid-off house to bring their net worth well into the green. The point of these examples is to demonstrate that net worth goes deeper than the outward picture someone presents.
Your net worth is like a snapshot of your financial health. It’s also a great data point to help you visualize your current position compared to where you want to end up.
If you calculate your net worth and note a below-average number, look at your liabilities. Perhaps your mortgage debt isn’t something you can eliminate quickly, but you could identify other areas where you can tone down the spending and eliminate debt.
Related Reading: What is the average annual income in Canada?
What Is the Average Canadian Net Worth?
As of 2019, the average Canadian net worth (median) was $329,900. Since 2016, Canadians experienced a 1.8% growth per year in net worth. Between 2012 and 2016, the net worth growth was 3.5% per year. As you can see, the net worth growth between 2016 and 2019 was slower than the prior half of the 2010s. Lastly, net worth was the highest in Ontario and British Columbia at $434,500 and $423,700, respectively. The higher net worths in these regions are usually linked to the strong housing markets in those provinces. However, these figures do not capture the recent economic turmoil and uncertainty caused by the pandemic.
The next survey from Statistics Canada is not due until 2023. However, in October of 2022, an update was provided. Overall, net worths decreased for many Canadians since 2019. The least wealthy were hit the hardest with a 12% decrease in net worth. Households younger than 45 years of age experienced an 8.2% decrease. The main cause of a decrease in net worth was due to an increase in debt and a decline in real estate values. Unfortunately, gains from the 2012 to 2019 period were essentially erased due to the COVID-19 pandemic. While there isn’t a clear figure of what the average Canadian net worth is at this very moment, between $200,000 and $300,000 is a good estimate.
Related Reading: What is the average credit score in Canada?
What is the Average Net Worth of a Canadian Family?
The average (median) net worth of a Canadian family is $329,900. Family refers to any household with two or more people, as well as ‘unattached individuals.’ Meaning this figure is consistent with the average Canadian net worth for singles too. If we’re looking at families that comprise 2 or more people, the median net worth figure reaches $514,400. A near 5% increase from 2012, these results might look promising. However, this figure is from a Stats Canada 2019 study, which might not reflect the many developments of the COVID-19 pandemic. More accurate data will be produced in the coming year.
Statistics Canada describes housing as both the biggest debt and liability for Canadians surveyed. Still, older Canadians who were homeowners had higher net worth amounts than those in similar age groups who were renting. About 62% of Canadians reported owning property worth $400,000 (median). In the same vein, about 35% of Canadians reported a mortgage of $180,000 or more.
But if we considered mortgages, $329,900 still might feel like high net worth. The second-largest asset for Canadians in this study was their pension plans, including the standard CPP and employer pension plans. In fact, employer-sponsored pension plans pumped up the family net worth seven times higher than for Canadians without them.
Here’s a quick look at the median Canadian net worth across different family types:
|Family Type||Net Worth 2019 (Median, $)|
|Couples with children under 18||$435,700|
You might assume the families with children have a much higher net worth since they don’t have to pay for extra mouths to feed, but these stats tell a different story. Couples without children have a median net worth of only $24,000 higher than couples with children. The true disparity lies in single-parent homes, where the net worth median sits at $83,100. Another important tidbit: senior families have greater net worth than non-senior families. Perhaps more time to build wealth accounts for the near-double increase.
What is the Average Net Worth of Canadian Seniors?
The average net worth of a Canadian senior is $543,200, with seniors categorized as people aged 65 or older. And if we’re talking about “unattached” seniors, the median drops down to $322,300. Senior-led families top the median list with an average net worth of $849,900.
Canadian seniors have some of the lowest poverty levels compared to other countries. But that doesn’t mean every senior has high-value assets. Remember, people with employer-sponsored pension plans are 7 times higher in net worth than those without. In other words, these individuals could skew the senior net worth figures high, when the reality is that poverty amongst Canadian seniors is increasing. Additionally, that same report tells us 31% of seniors don’t have enough money to cover one month of after-tax income in the event of an emergency. Here’s some more details:
|Senior Type||Net Worth 2019 (Median, $)|
|Singles 65, and older||$543,200|
Related Reading: Debt and Assets Rise Among Senior Canadian Families
What is the net worth of the top 1% of Canadians?
Entrepreneur and wealth expert Jeff Wiener says $9.2 million. This real estate investor and business coach calculated a necessary annual income of $225,000 to play in the top 1% of Canadians. Still, the richest Canadians reported an annual taxable income of $496,200 per year. Don’t get us wrong – we’re talking about net worth, not income. You could make $1,000,000 per year and still have enough liabilities to bring you down to a negative net worth.
Still, what do these high-income Canadians have in common? Statistics Canada notes that Ontario and British Columbia have the highest net-worth Canadians, with a median net worth between $423,700 and $434,500. While nothing close to the top 1%, these provinces typically have more expensive real estate (especially Vancouver and Toronto), which pumps up net worth based on property assets.
Related Reading: How many millionaires are there in Canada?
What net worth is considered rich in Canada?
There’s no solid answer, as rich to you might look average to another. Financial columnist Ted Rechtshaffen offers the Financial Post a few ideas based on the RBC Wealth Management Report. He sees rich as people with a high net worth, between $1 million to $5 million, though he cautions against blanket classifications since this applies to anyone who owns a home in Toronto or Vancouver. Additionally, these figures are from 2015, which might be a bit dated considering major economic events from recent years.
Net Worth and You
Your net worth helps you visualize your financial standing. It’s more than just a number – it’s a way to compare your current position with your ideal one. You might use your net worth to inform a personal financial strategy for yourself or help you communicate your goals to an advisor.