OTTAWA – This week Statistics Canada released the ‘Survey of Financial Security, 2019’. The survey states that while the estimates from the 2019 Survey of Financial Security do not reflect the impacts of the COVID-19 pandemic, they do provide a baseline for assessing developments during the pandemic and shine light on which Canadian families may be more or less financially vulnerable. For example, statistics on net worth, indebtedness of families and their liquid financial asset holdings show that some families were more likely to be vulnerable than others. The data also allow an examination of the net worth of families by age and family structure.
The median net worth of Canadian families was $329,900 in 2019. The growth in net worth was slower over the 2016 to 2019 period compared with earlier in the decade.
On an annualized basis, the net worth of Canadian families was up 1.8% per year from 2016 to 2019, a growth rate that was not large enough to be statistically significant. By contrast, from 2012 to 2016, net worth grew 3.5% per year.
Canadian families include families of two or more persons, as well as unattached individuals. Net worth is the difference between a family’s assets and debts.
Housing is both the largest asset and the largest debt for Canadians as has been the case since this survey was first launched in 1999. In 2019, about three-fifths (61.9%) of Canadian families reported a principal residence as an asset with a median value of $400,000, while about one-third (34.6%) reported holding a mortgage on their principal residence with a median outstanding value of $180,000.
Overall, just under one-third (30.2%) of Canadian families were debt-free in 2019.
Families where no member had an employer pension plan, families who were renters, lone-parent families, younger families and unattached non-seniors had lower net worth than others.
Net worth highest in Ontario and British Columbia
Families in Ontario reported a median net worth in 2019 at $434,500, while those in British Columbia reported $423,700.
Families in Vancouver ($521,500) and Toronto ($467,900) had the highest median net worth among the eight largest census metropolitan areas. Québec ($352,800), Ottawa–Gatineau ($348,000), Calgary ($336,100), Winnipeg ($336,100) and Edmonton ($308,800) each had similar levels of net worth. Montréal had the lowest ($220,200).
Geographical differences in net worth can often be linked to strong housing markets in some parts of Canada. For example, the median value of principal residences in Vancouver rose from $366,000 in 1999 to $900,000 in 2019—over double the median value reported in Montréal ($350,000 in 2019 from $175,700 in 1999).
Seniors less likely to be debt-free during retirement compared with two decades ago
While net worth remained high in 2019, some groups reported being more financially vulnerable than in the past two decades. For example, fewer Canadians reported being debt-free during their retirement years. Almost one-third (30.2%) of Canadian families were debt-free in 2019. While senior-led families (56.7%) were most likely to be debt-free, this rate was down from 72.6% in 1999. Over 1 in 10 senior-led families (12.1%) still had a mortgage on their principal residence in 2019, compared with 6.6% in 1999. Furthermore, more senior-led families reported owing on a line of credit, carrying a credit card balance from month to month or having installment debt in 2019 (27.5%), than was the case in 1999.
Families in pre-retirement years were also more likely to be carrying debt in 2019 than in previous decades. Over one-quarter of Canadian families (28.1%) where the principal earner was aged 55 to 64 were debt-free in 2019, down 11.0 percentage points from 20 years earlier (39.1% in 1999).
Lone-parent families had low median net worth
The net worth of Canadian families also varied among family types, with lone-parent families and unattached non-seniors having lower net worth.
Lone-parent families reported median net worth of $83,100 in 2019, which was less than one-fifth of the median net worth of couples with children ($435,700). Lone-parent families were less likely to own their own home, have pension assets or to own a vehicle compared with couples with children.
Not surprisingly, given that net worth tends to increase with age, senior-led families reported the highest median net worth in 2019 ($840,900), while non-senior led couple-only families reported a median net worth of $459,400. Senior-led families had more pension and non-pension financial assets and less mortgage and vehicle debt than non-senior couple-only families.
Unattached seniors reported a median net worth of $322,300 in 2019, over six times higher compared with unattached non-seniors ($51,000).
Lone-parent families also held the least amount of liquid financial assets
In 2019, the median value of liquid financial assets held by families was $27,700. Senior-led families held $107,000 in these assets, while lone-parent families held $5,500.
Liquid financial assets are all assets held in chequing and saving accounts, term deposits, treasury bills, tax-free savings accounts, stocks and bonds (in mutual funds or not), and registered retirement savings plans. Liquid financial assets can provide some relief for families faced with a disruption to their primary source of income, so they can continue to meet their essential needs and financial obligations. Therefore, families with lower liquid financial assets may be more vulnerable to a disruption in income than families with higher liquid financial assets.
Three-quarters of families (75.0%) held sufficient liquid financial assets to replace one month of their own after-tax family income. Nearly two-thirds (60.5%) reported having at least three months-worth, while just under half (49.5%) reported having enough liquid financial assets to cover at least six months of their after-tax income.
Some families had little or no liquid financial assets to replace their income. In 2019, almost half of lone-parent families (45.7%) reported having less than enough to cover one month of their after-tax income, followed by unattached non-seniors (31.0%).
The median net worth for families with an employer-sponsored pension plan nearly seven times higher than for those without one
In 2019, just over half of Canadian families (50.4%) had at least one member with a current, deferred or in-pay EPP. Over half of the families where the major income earner was aged 35 or older had an EPP (ranging from 51.9% to 57.0% depending on the age cohort), compared with about one-third (35.7%) of families where the major income earner was under the age of 35.
Families with an EPP had higher median asset values for every asset category except bonds and equity in business compared with those without an EPP. Those with an EPP also had higher median debt in every debt category except mortgage on principal residence, where both groups had a median of $180,000.
Renters nearing retirement had lower net worth than homeowners
Homeowners reported a higher median net worth ($685,400) compared with renters ($24,000).
While homeowners tend to be older than renters and therefore have had more time to accumulate net worth, a difference in median net worth between homeowners and renters remains when controlling for age.
For those nearing retirement age (55 to 64), the median net worth of homeowners was $952,100, compared with $40,000 for renters. This suggests that renters in this age group have not accumulated a large nest-egg in preparation for retirement.
Likewise, few young renters have accumulated as much net worth as their homeowner counterparts. Median net worth of homeowners under 35 years of age was $272,100, while median net worth of renters was $14,500 for the same age group. In 2019, 1 in 20 young renters (5.0%) had accumulated as much net worth as the median young homeowner.
The Survey of Financial Security estimates are based on probability samples and are therefore subject to sampling variability. As a result, estimates will show more variability than trends observed over longer time periods. In this release, differences between estimates are statistically significant at the 95% confidence level unless otherwise noted.