Generational Wealth Divergence in Canada: How Market Gains Favor the Privileged

The Canadian wealth landscape is undergoing a seismic shift, but not all generations are feeling the tremors equally. As the $1 trillion intergenerational wealth transfer from baby boomers to their heirs accelerates, it's becoming increasingly clear that this shift is not a silver lining for younger Canadians. Instead, it's deepening the chasm between high-net-worth households and millennials, who are grappling with stagnant incomes, declining real estate values, and a financial system that disproportionately rewards those who already have.

The $1 Trillion Transfer: A Boon for the Already Wealthy

According to a report by the Chartered Professional Accountants of Canada, an estimated $1 trillion in wealth is set to shift from baby boomers to their children-primarily Gen X and millennial households-between 2023 and 2026. Much of this wealth stems from real estate gains in high-cost cities like Toronto and Vancouver, where home values have surged over the past decade. However, this transfer is not redistributing wealth but rather preserving it within families that already hold significant assets. For instance, 31% of first-time homebuyers in 2024 received financial assistance from family members, a sharp rise from 2015. This pattern underscores how intergenerational support is enabling wealth preservation for those with existing resources, while younger households without such safety nets are left behind.

Asset Allocation: High-Net-Worth Families Diversify, Millennials Stagnate

High-net-worth individuals are leveraging their advantages to secure long-term gains. As of 2023, the top 1% of high-net-worth families hold 23.8% of Canada's total net wealth, according to the Parliamentary Budget Officer's High-net-worth Family Database. These households are increasingly allocating capital to private markets, such as private equity and venture capital, to diversify their portfolios and generate stable income in an uncertain economic climate according to a new report. Meanwhile, millennials and Gen Z are growing their wealth at a slower pace. The median net worth of households under 35 was $159,000 in 2025, compared to $873,000 for pre-retirement households according to Q2 2025 data. Younger generations are also shifting away from real estate-where affordability challenges persist-and toward financial markets, but their gains are modest compared to older cohorts. For example, while high-net-worth families saw real estate holdings rise by 2.65% year-over-year, millennials' real estate values have declined, squeezing their net worth.

Financial Gains Concentrated at the Top

The concentration of financial gains in Canada's wealth distribution has reached alarming levels. In Q2 2025, the top 20% of households accounted for 64.8% of the country's total net worth, averaging $3.4 million per household, while the bottom 40% held just 3.3% of the total, with an average net worth of $86,900. This disparity is driven by strong equity market performance, which disproportionately benefits high-net-worth families. The wealthiest households increased their net worth by 4.9% in 2025, largely from financial asset gains (+9.6%), while the least wealthy saw only a 4.7% increase, driven solely by financial assets. Younger households, meanwhile, experienced the slowest growth at 2.1%, as declining real estate holdings and high interest rates eroded their wealth.

Income Stagnation and Structural Barriers

Income growth for younger Canadians has also lagged behind older generations. Households under 35 saw disposable income rise by just 18% since Q1 2020-a 16 percentage point gap compared to households aged 45–55. This stagnation is partly due to their overrepresentation in industries vulnerable to economic shocks, such as retail and food services, where employment rates have declined. Additionally, systemic barriers, such as the historical exclusion of Indigenous communities from wealth-building opportunities, exacerbate these disparities.

A Call for Strategic Reevaluation

For investors, these trends highlight the need to re-evaluate long-term wealth-building strategies. High-net-worth families are prioritizing diversification into private markets and alternative credit to mitigate risk, while younger households must navigate a landscape where real estate and income growth are less reliable. Policymakers, too, must address structural inequities that perpetuate wealth concentration. Without intervention, the next generation risks being locked out of the very markets that fueled their predecessors' prosperity.