Economist highlights that pandemic-era support and asset gains boosted savings, but earnings for under-35s barely rose
Young Canadians have seen their net wealth almost double since 2020, but their incomes are lagging far behind, according to a new analysis from RBC.
Economist Rachel Battaglia’s report finds that younger Canadians have outpaced every other age group in wealth accumulation over the past four years, driven largely by growing financial assets (like cash savings), rising property values, and reduced liabilities, notably mortgage debt. Critically, though, their income growth remains the weakest among all demographics.
“Households under age 35 nearly doubled their net wealth over the last four years, yet they’ve simultaneously experienced the slowest income growth of any age group,” Battaglia says.
While pandemic-era relief programs such as the Canadian Emergency Response Benefit (CERB) supplied young households with crucial liquidity, and a buoyant stock market and intergenerational wealth transfers added further financial support, the sustainability of these gains is now in question.
Beyond the accumulation of assets, shrinking mortgage burdens also played a role with many who took out loans during the ultra-low interest rate window of 2020–21 managing to repay more quickly. At the same time, some younger households simply deferred homebuying amid affordability challenges, avoiding new debt entirely while still riding the wave of elevated real estate prices.
However, the shelter provided by asset growth may be fragile as the analysis shows that since Q1 2020 disposable income for under-35s increased by just 18%, which is 16 percentage points below income growth for 45–55-year-olds and trailing the national average by 8 percentage points. Younger households are the only group whose income gains have failed to keep pace with inflation.
Earnings stagnation stems mainly from slow growth in employment compensation which is a reality made worse by the concentration of younger workers in sectors like retail, hospitality and food services, which remain vulnerable to economic swings. Battaglia says that the employment rate for those under 35 is expected to have fallen by three percentage points this year versus 2020, meaning fewer young people are earning at all.
The report warns that as housing valuations and equity market gains stabilize, while pandemic supports fade, the wealth cushion may erode. The longstanding pathway from earnings to building stable wealth for younger Canadians could be at risk unless labour market conditions improve.
