Differences in people’s age explains most wealth inequality in Canada

TORONTO—In Canada, age largely explains the different levels of wealth among people, finds a new study released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

“It’s a natural phenomenon—younger people accumulate debt, begin paying it down as they enter the workforce, then begin to accumulate wealth over time,” said Christopher Sarlo, professor of economics at Nipissing University, senior at the Fraser Institute and author of Wealth Inequality Revisited, a follow-up to a 2017 study.

For example, according to the latest Statistics Canada Survey of Financial Security (microdata), in 2019, among the wealthiest top 20 per cent of households in Canada, 77.3 per cent were composed of people 50 years old or older. Meanwhile, among the least-wealthy bottom 20 per cent of households, 64.8 per cent were composed of people 50 and under.

And that same year, the average net worth in Canada peaked at $1.17 million, for Canadians aged 60 to 64, while for those under 30, it was less than $150,000.

Yet there remains a common misconception that wealth inequality is a bad thing for the economy and society at large. There’s simply no empirical evidence for that.

“Wealth inequality is largely the outcome of millions of voluntary transactions in society, and for the vast majority of Canadians, wealth accumulates systematically over a lifetime,” Sarlo said.

Media Contact:
Christopher Sarlo, Senior Fellow, Fraser Institute

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