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.