Canadians are

creating wealth

at a record pace, but there is cause for concern amid the statistics, say economists.

Financial assets rose 0.9 per cent in the first quarter, hitting a record high for the sixth quarter in row, said Moody’s Analytics.  

Real estate values

also climbed, though at a slower pace.

Overall these contributed to boosting

household wealth

by 0.8 per cent to $17.6 trillion.

But other records are being set amid this growth that are not so positive.

Lower-income groups, the front line in the trade war with the United States, are falling behind.

Disposable income for the bottom 20 per cent of income distribution in this country grew just 3.2 per cent, about half the average growth and the weakest of any group.

Moreover, the gain was mostly driven by a 30 per cent rise in net transfers from government support and reduced taxes, said Moody’s. Average wages slipped 0.7 per cent and investment earnings declined.

“At the same time, all other quintiles experienced wage growth, and the top two saw a bump in net investment earnings,” said Moody’s economist Kyra Kendrick.

Lower-wage jobs in manufacturing and wholesale and retail trade have been hit hardest by weak economic growth and the uncertainty of

Donald Trump’s tariffs

. Recent layoffs have been concentrated in these industries, cutting hours worked and wages.

Canada’s

household savings

rate fell for the second quarter in a row and spending overtook gains in disposable income. Borrowing slowed but total debt rose faster than income, pushing the debt-to-income ratio to 173.9 per cent.

“Despite the top-line record-breaking gains in household wealth creation, wealth remains concentrated,” said Moody’s economist Sebastian Mintah.

According to the latest data from Statistics Canada, the wealthiest 20 per cent of households now hold 68 per cent of financial assets and 51 per cent of real estate.

This pushed the income gap in this country to its highest on record in the first quarter. The measure, which is the difference in the share of disposable income between households in the top 40 per cent and bottom 40 per cent of income distribution, rose to 49 per cent.

The gap has been widening since the pandemic and is now about 4 per cent higher than the average in the 2010s, said Moody’s.

“With tariff worries far from over, additional job losses will hit this vulnerable income segment,” said Kendrick.

“All told, a major turnaround in the income gap is unlikely soon.”

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Billions are flowing into United States coffers from Donald Trump’s tariffs.

Revenue from duties totalled US$90 billion between January and June, though according to

Royal Bank of Canada economists

, that is less than half of the US$188 billion implied by Trump’s tariff announcements.

U.S. Treasury Secretary Scott Bessent has said the tariffs are on track to pull in US$300 billion, but trade observers have their doubts.

“Either tariffs are a source of revenue, or they are a means to protect American industry — beyond the short term they can’t be both,” said Robert Wolfe, a professor emeritus at Queens University. “If imports decline in response (to) the tax, so will revenues.”

Read more on Trump’s tariff haul here

  • Canada’s premiers meet in Muskoka district, Ont.
  • The Bank of Canada releases its second-quarter issue of its business outlook survey and Canadian survey of consumer expectations. The reports come ahead of the central bank’s interest rate decision on July 30.
  • Today’s Data: Canada industrial products and raw materials price indices
  • Earnings: Rogers Communications Inc., Domino’s Pizza Inc., Verizon Communications Inc.

 

  • Donald Trump’s tariffs are pulling in billions, but is it really a win?
  • Is it time to lock in that variable mortgage rate?
  • Howard Levitt: Even the most desultory employee can find favour with the courts

Despite most economists claiming there are cracks forming in our economy, markets still think inflation has teeth. If traders are right and economists are wrong, further Bank of Canada interest rate cuts could stay shelved for months — maybe skipped entirely this cycle.

This prompts a key dilemma for certain variable-rate holders: should you lock in now or keep riding the rate waves?

Mortgage strategist Robert McLister offers six reasons you might want to stick with variable and six reasons you might want to grab a fixed rate.

See which option best fits your situation.

Send us your summer job search stories

Recently, we published a feature on the

death of the summer job

as student unemployment reaches crisis levels. We want to hear directly from Canadians aged 15-24 about their summer job search.

Send us your story, in 50-100 words, and we’ll publish the best submissions in an upcoming edition of the Financial Post.

You can submit your story by email to

fp_economy@postmedia.com

under the subject heading “Summer job stories.” Please include your name, your age, the city and province where you reside, and a phone number to reach you.

Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at wealth@postmedia.com with your contact info and the gist of your problem and we’ll find some experts to help you out while writing a Family Finance story about it (we’ll keep your name out of it, of course).

McLister on mortgages

Want to learn more about mortgages? Mortgage strategist Robert McLister’s

Financial Post column

can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his

mortgage rate page

for Canada’s lowest national mortgage rates, updated daily.

Financial Post on YouTube

Visit the Financial Post’s

YouTube channel

for interviews with Canada’s leading experts in business, economics, housing, the energy sector and more.

Today’s Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at 

posthaste@postmedia.com

.

  • Did the Bank of Canada cut rates too much and too fast?
  • Canada’s industrial heartland is bleeding jobs

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