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Rising tide of wealth

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In many ways the rich do get richer. From 1984 to 2005, the richest Canadian families enjoyed the strongest growth in wealth (excluding growth in pension accounts), as the average net worth of the richest fifth of families increased by 64% and the second richest fifth by 48%.

At the same time, families with the lowest net worth saw virtually no growth in wealth at all over that period. The second poorest actually saw their net worth decrease 11%.

The net worth of the middle group of Canadian families has risen at a steady pace over the past twenty years, climbing from $67,300 in 1984 to $74,400 in 1999 and to $84,800 in 2005—up 26% over the period.

Part of the growth in net worth can be attributed to Canada’s aging population. The higher average age of Canadians means that most people are in their prime earning years.

Another driving force is the hot housing market. Since most families in the top fifth own a house, this group gained significantly from the real estate boom—from 1999 to 2005, these families saw the median value of their principal residence rise by $75,000. However, since very few of the poorest families owned a residence, this group has gained little benefit from the rise in housing prices.

In terms of actual wealth, the gap between top and bottom is even starker—the median wealth of the richest families was $551,000, whereas the poorest owed about $1,000. The second poorest fifth of Canadian families were little better off, having an average net worth of just $12,500.