Canada’s national balance sheet edged higher in the second quarter of 2025, with households reporting stronger wealth on the back of buoyant stock markets, even as debt levels grew and the economy slipped into contraction.
The national net worth inched up 0.1 per cent to $19.1 trillion, reflecting a firmer international investment position and modest gains in household assets.
Household net worth expanded for the seventh straight quarter, climbing by $257.7 billion, or 1.5 per cent, to $17.9 trillion due to equity markets, where the S&P 500 rallied more than 10 per cent and the S&P/TSX advanced nearly eight per cent, providing relief after a shaky start to the year. Canadians saw the value of their financial assets rise 2.7 per cent, or $291.1 billion, to more than $11.2 trillion.
The wealth effect was uneven. The top fifth of households control nearly 70 per cent of financial holdings, leaving most families less shielded from trade uncertainty, slowing growth, and lingering fears of job losses.
Financial liabilities increased $46.7 billion, or 1.5 per cent, in the quarter. Credit market borrowing slowed from earlier highs but still reached $31.6 billion, including $24.6 billion in mortgages. Consumer credit strengthened, adding $7 billion. In total, household debt stood at more than $3.1 trillion, about three-quarters of it in mortgages.
The debt-to-income ratio climbed again, with Canadians now owing $1.75 for every dollar of disposable income. The debt service ratio ticked up for the first time in six quarters, rising to 14.41 per cent. Renewals at higher rates added to the burden.
Real estate showed signs of fatigue. The value of residential properties was little changed at $8.4 trillion as resale activity slowed and new housing prices fell nearly one per cent in the first half of the year. Homeowners’ equity slipped to 73.7 per cent from 75 per cent a year earlier.
The broader economy contracted by 0.4 per cent in the quarter, dragged down by weaker exports and declining business investment in machinery and equipment. Household consumption, however, rose 1.2 per cent, outpacing income growth and pushing the saving rate down to five per cent. Canadians channelled far less into mutual funds and deposits than earlier in the year.
Public and corporate balance sheets also tilted further toward borrowing. Ottawa’s demand for funds eased to $36.7 billion but remained historically high, with chartered banks snapping up a record share of federal bonds. Combined with provincial and local governments, total per capita gross debt reached $97,178, well above Canada’s nominal GDP per person of $76,118.
Private non-financial corporations borrowed $43.9 billion, the fastest pace since late 2021. Loans made up the bulk, but bond issuance also strengthened. While the debt stock rose modestly to $2.3 trillion, the stronger Canadian dollar reduced the burden of foreign-denominated liabilities.
National wealth slipped to $17.3 trillion, offsetting some of the gains from financial holdings. But inventories of gold and precious metals rose sharply, up more than 50 per cent over the past year, underscoring how commodity markets are reshaping Canada’s asset mix.
Taken together, the figures suggest that Canadians are wealthier on paper, thanks to stock market gains, but many still face weaker job prospects, rising debt costs, and higher day-to-day expenses that strain household budgets.