Most Canadian families have seen their fortunes grow since the recession – but they're also swimming in debt.
A new study paints a picture of both rising net worth and swelling debt levels. All told, the median net worth of Canadian families climbed 44.5 per cent to $243,800 in 2012 from seven years earlier, adjusted for inflation, Statistics Canada's survey of financial security shows. (Net worth reflects the amount family units would have if they sold their assets and paid all of their debt.)
Rising home and pension plan values explain most of the wealth gain. At the same time, mortgage debt has grown while the size of car loans more than doubled since 1999. All age groups saw debt loads grow between 2012 and 1999.
The survey echoes household balance sheet data, which both show "that overall debt grew at a faster pace than assets," said Leslie Preston, an economist at Toronto-Dominion Bank. "But, because assets are far larger than debt, net worth still increased."
Net worth changes with people's life cycles. Families where the highest-earning person was between 55 and 64 years old had almost three times the median net worth of family units where the highest-income person was younger, at 35 to 44 years old. Among provinces, net worth is highest in British Columbia, which likely reflects rising house prices.
The study also looked at wealth distribution. The further up the ladder, the bigger the share of wealth. The wealthiest 20 per cent of families possessed 67.4 per cent of the country's net worth in 2012, although that's a decline from 69.2 per cent in 2005.
Families in the lowest quintile are the only segment that haven't seen their net worth rise – their median net worth, at $1,100, is lower than it was in 1999, when it was $1,300. All other family units saw their net worth climb in that time.
"Differences in home ownership and private pension assets between quintiles help explain these changes," the agency noted.
Wealth distribution remains "very unequal," said the Ottawa-based Broadbent Institute, with the report offering further evidence "that economic inequality remains a serious concern."
Among provinces, families in British Columbia had the highest net worth at $344,000, more than double the level of those living in Newfoundland and Labrador and Prince Edward Island. Median net worth in B.C. has more than doubled since 1999.
Houses are still the main asset for families. In 2012, the principal residence accounted for a third of the total value of assets. Among homeowners, the median value of their homes rose 46.6 per cent to $300,000 between 2005 and 2012.
Private pensions are the next largest asset. About seven in 10 families had them in 2012, a similar proportion as in prior years. But the median amount grew, to $116,700 in 2012 from $77,400 in 2005 as the population aged, the agency said.
On the debt side, more than three-quarters of total debt owed by Canadians stems from mortgages. The total amount of mortgage debt grew "substantially" in recent years, Statscan said, to $1-trillion in 2012 from $650.8-billion in 2005. The median value of mortgages was also higher in 2012 than in previous years.
A quarter of families have lines of credit. Total debt in lines of credit swelled to $144.9-billion from $77.5-billion in 2005. Car loans also ballooned. Loans on vehicles have more than doubled since 1999.
Canadian families carried a debt load of $14.21 for every $100 in assets in 2012, up from $13.06 in 1999, with single-parent families having the highest debt burden.