The average Canadian household net worth is surprisingly huge at roughly $680,000 in 2021, up from $400,151 in 2012 according to Statistics Canada. The average Canadian household net worth is roughly 2X the average U.S. household net worth.
Not only is the average Canadian net worth larger than the average American net worth, the Canadian housing market is also hotter than the American housing market! If the U.S. housing market ever gets as hot as the Canadian housing market, U.S. home prices could rise by another 30% – 75%.
When you think of Canada, what do you think? I think wonderful skiing in Whistler, hockey, maple leaves, free healthcare, cold weather, Hong Kongnese buying up Vancouver, French Quebec, McGill University and Blackberry devices. Seldom do images of extravagance and wealth come up.
You would be hard-pressed to name three well-paying international Canadian firms. Whereas you could easily name a dozen international American firms like Google, Facebook, Goldman Sachs, and more. As a result, the average Canadian household net worth might be overly-inflated given real estate prices have done so well.
Canadians Are Rich!
Despite the perception that America is the land of opportunity, we are falling behind with even The Associated Press saying that 4 out of 5 Americans are at risk of living in poverty or near-poverty at some point in our lives. That’s pretty sobering news given how hard we work.
For example, Vancouverites boast the highest net worth of all Canadians at roughly $1,144,204. Torontonians on the east coast have a average net worth of roughly $966,0000.
I’ve argued why Socialism could be a means to a brighter future to much disdain by readers everywhere. However, with this latest data about Canadian household net worth coupled with the research I conducted abroad in Socialist Europe, it’s become evident that Capitalism is not the only means to wealth.
For those of us who live in the United States, a Joe Biden Presidency, at the margin, means we may be moving closer to Canada’s government style. Therefore, perhaps the average net worth of Americans will increase as well.
Why Is The Average Canadian Household Net Worth So Huge?
To understand why the average Canadian household net worth is so high, let’s look at some key reasons.
Real estate is booming in Canada
As of 2021, the median home price of $531,000 in Canada is 56% higher than the average US home price of $340,000. The chart below either says that Canadian home prices are at risk of a correction, or US home prices are severely undervalued. There’s probably some truth to both.
$531,000 equates to 94.5% of the current average household Canadian net worth, which means the average household net worth is at risk of sharp movements in either direction. Other studies show that 60-65% of assets are tied into real estate. Either way, anything over 50% is quite risky after a certain age.
It is clear that the hot Canadian housing market is one of the biggest drivers of wealth creation. Below is another chart that shows how Canada’s strong housing market has boosted the average net worth of millions.
If the below chart doesn’t prove there is a Canadian housing bubble, I’m not sure what does. Canadian home prices have clearly decoupled from disposable income. Whereas in the U.S., the housing market actually looks undervalued.
Greater social safety net
Another reason why the average Canadian household net worth is so high is due to strong government social programs. When you’ve got free health care, strong unions, subsidized college tuition, and deep support for the unemployed you are more likely to be less stressed and do a better job at work or on your business.
As a result, the average Canadian gets to save and invest more of their disposable income. A lot of that extra disposable income has gone to housing. But some of the disposable income goes into the stock market as well.
Debt in a bull market
Canadian household debt runs roughly 160% of disposable income, one of the highest in the world. The debt is largely mortgage debt which has been going up in a relatively steady fashion for well over a decade.
Even during the global pandemic, real estate prices and stock prices have continued to go up. With cheap debt everywhere, Canadians and Americans are wisely refinancing their mortgage debt.
Check out Credible if you want to refinance your mortgage. You’ll give no-obligation quotes from competing lenders in minutes. Mortgage rates are close to all-time lows. Take advantage.
With a population of only 34 million in Canada, it’s much easier for the Central Government to govern and take care of its people. The Low Income Cutoff (LICO) is around 10% in Canada. This compares to around 16% of Americans living in poverty as of 2021 according to the US Census Bureau.
Look at small countries such as Singapore, Switzerland, and Monaco. All have very high GDP per capital because it’s much easier for the government to take care of its people.
Lower military spend
When you’ve got America as your neighbor, you don’t have to spend as much on F-35 fighter jets to protect your country. The US will scramble their jets and switch on ARC Net in no time.
When you’re not the World’s Police, butting in every other country’s business, military spend isn’t as big a priority either. Canada spends roughly $20 billion a year on the military compared to $860 billion a year in the US. Americans say they are Canadians when they travel to some countries for a reason. It pays to be more peaceful.
More open immigration policy
According to the Canadian government, 21% of the total population was foreign born in 2011, the highest proportion among any G8 country. Canada is a hot spot for immigration because they have major worker shortages in hospitality and skilled industries.
With Vancouver as the closest North American international airport to Asia, Vancouver is able to garner wealthy Asian traffic that bring with them strong savings customs.
In the US, we put up fences, pass discriminatory laws, enact trade embargoes and speak negatively about the Chinese. We also don’t seem to get along well with the French.
Greater Canadian natural resources
When you’ve got oil, minerals, and gold, what more do you need? Canada is resource rich, providing a never ending source of wealth.
There’s this enormous debate about the Keystone Pipeline project that would ship crude oil and bitumen all the way down to the refineries in Texas (cancelled by Joe Biden). Big bucks. Big dependency. Six figure jobs abound!
It’s kind of like the Saudis ruling the world just because they’ve got so much oil. It’s nice to inherit great wealth.
Slightly higher tax rates at lower income levels
The top Federal marginal tax rate in the US is currently 37% on single income of over $400,000 and couple income of over $450,000 a year. The top Canadian “Federal” tax rate is 29% of taxable income over just $135,054. The closest bracket we’ve got is a 28% tax rate on taxable income over $87,850 and up to $183,250.
Canadians also pay Provincial tax rates of 10%-16.7% on incomes as little as $67,000+. In comparison, California taxes income between $46,766 and $1 million at 9.3%, and California is one of the highest tax states.
By having a lower income threshold and slightly higher taxes, this means that more people contribute to ensure a healthier system. There is no constant droning on about how half of Americans don’t pay any Federal taxes. Oh, and Canadians don’t have estate tax either.
More Canadian Net Worth Statistics 2021
If you want to get down to the nitty gritty of the average Canadian net worth, here are some more facts.
Net Worth Canada Percentiles – Top 1%, 5%, 10%, and 50% in Net Worth
- The top 1% of net worth in Canada in 2021 = $9,737,000
- The top 2% of net worth in Canada in 2021 = $2,500,000
- The top 5% of net worth in Canada in 2021 = $980,000
- The top 10% of net worth in Canada in 2021 = $840,000
- The top 50% of net worth in Canada in 2021 = $482,000
Canada’s Net Worth Dollar Amounts Between Percentiles
- The amount of net worth required to go from 90 to 95% = $140,000
- The amount of net worth required to go from 95% to 99% = $8,757,000
High Net Worth Individuals Canada
- Number of individuals with a net worth between $1 million and $5 million, High Net Worth, HNW = 764,033
- Number of individuals with a net worth between $5 million and $30 million, Ultra High Net Worth, UHNW = 91,823
- Number of individuals with a net worth greater than $30 million, Very High Net Worth, VHNW = 10,395
Average Net Worth In Canada By Province
- Average net worth per household in British Columbia (BC) = $943,742
- Average net worth per household in Ontario = $714,796
- Average net worth per household in Alberta = $700,171
- Average net worth per household in Quebec = $470,325
Average Net Worth Canada Statistics – Cities
- Average net worth per household in Vancouver = $1,144,204
- Average net worth per household in Toronto = $966,698
- Average net worth per household in Calgary= $840,417
- Average net worth per household in Montreal = $520,725
Average Household Income Canada Statistics – Provinces
- Average income per household in British Columbia = $102,355
- Average income per household in Alberta = $122,282
- Average income per household in Ontario = $106,806
- Average income per household in Quebec = $83,007
Canadians Are Living Large With A Big Average Net Worth
Despite long work hours and inventing so much of what we use every day (iPhone, Android Phone, iPad, Chromebook, Intel processor, Nike shoes, Google, Yahoo, YouTube, AirBnB, Pandora, etc) Americans are not the wealthiest ones in North America.
Canadians are King and Queen thanks to their extraordinarily strong housing market and Social system of governance. With stronger governance comes better managed financial institutions. A wider taxation net also helps ensure that a country is more united.
Although it might be hard to name a handful of Canadian billionaires, having a household net worth of $680,000 in your mid 30s to early 40s is not too bad at all. This is especially true if your health care is covered when you retire. If the average $680,000 household can keep working for the next 20 years, there’s a good chance that many of them will become millionaires.
Americans can look forward to more Canadianized America given the redistribution of wealth and the ever growing size of the government.
Americans should think twice about working so hard and taking so much career and financial risk. Although there are risks with owning real estate, it’s clear that over the long run real estate has helped more people get wealthy than not.
Manage Your Net Worth Carefully
One of the best way to become financially independent is to get a handle on your finances by signing up with Personal Capital. They are a free online platform which aggregates all your financial accounts in one place. This way, you can see where you can optimize your money.
Before Personal Capital, I had to log into eight different systems to track 25+ difference accounts to manage my finances on an Excel spreadsheet. Now, I can just log into Personal Capital to see how all my accounts are doing, including my net worth. I can also see how much I’m spending and saving every month through their cash flow tool.
After you link all your accounts, use their Retirement Planning calculator. It pulls your real data to give you as pure an estimation of your financial future as possible. Definitely check to see how your finances are shaping up as it’s free.
I’ve been using Personal Capital since 2012. As a result, I have seen my net worth skyrocket during this time thanks to better money management.
Grow Your Net worth With Real Estate
Besides finding out the average Canadian household net worth is ~$680,000, it’s also interesting to see how much more expensive the average Canadian home price is. Real estate in America is DIRT CHEAP in comparison!
Therefore, I think it’s wise to invest in U.S. real estate. With mortgage rates staying low, corporate earnings strong, and demographic trends towards even lower cost areas of the country, the best way to invest in real estate surgically is through real estate crowdfunding.
Here are my two favorite real estate platforms:
Fundrise: A way for accredited and non-accredited investors to diversify into real estate through private eFunds. Fundrise has been around since 2012 and has consistently generated steady returns, no matter what the stock market is doing.
CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations, higher rental yields. They also have potentially higher growth due to job growth and demographic trends.
Both are free to sign up and explore.
I’ve personally invested $810,000 in real estate crowdfunding since 2016 to diversify my investments. It’s nice to earn income 100% passively as I spend more time taking care of my children.
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