Canada is currently experiencing an unprecedented transfer of wealth, defined by experts as a potential shift set to exceed $1 trillion. Between 2023 and 2026, aging baby boomers are expected to pass down their assets, primarily real estate, to their millennial and Generation X children, reshaping the country’s economic framework and potentially exacerbated by existing societal inequalities.
The Chartered Professional Accountants of Canada predicts this financial wave could have significant repercussions on housing markets, especially in major urban centers like Toronto and Vancouver, where home prices have reached astronomical heights. Keith Willoughby, dean of the Edwards School of Business at the University of Saskatchewan, describes this phenomenon as a "trillion-dollar tsunami," emphasizing its unprecedented nature and noting, "We’re talking about a trillion-dollar tsunami... unprecedented in our history," according to CBC News.
Homeownership is becoming more accessible for some, as the influx of inherited wealth allows younger generations to enter the property market. According to CIBC, 31 percent of first-time homebuyers were assisted by their families financially in 2024, up from just 20 percent in 2015. The average financial contribution for these home purchases has also risen dramatically, with 2024 figures showing it reaching $115,000, substantially up from $66,000 recorded just five years earlier.
While these inheritances are helping many, they also deepen the divide between those who can rely on family wealth and those who cannot. A study by Statistics Canada revealed starkly, indicating individuals born in the 1990s with homeowner parents were twice as likely to own homes themselves compared to those whose parents did not own property. Willoughby expresses concern about the societal changes this could instigate, stating, "It creates a disturbance within society... It’s almost hardwired to link cause and effect. That 'If I do X, I should get Y.'" Might financial success become less about hard work and more about familial luck?
This generational wealth shift isn’t uniform across the country. Indigenous communities, along with newer Canadians who have historically faced barriers to property ownership, stand on the sidelines of this financial wave. Jason Bird, a professor at First Nations University of Canada, highlights the lack of wealth-building opportunities among Indigenous peoples: "We don’t even have a boomer generation to pass stuff down" said Bird. He points out the significant cultural differences, explaining, "Wealth is kind of judged differently... The more you have, the more you can give, and the more you can give, the more it helps numerous people," highlighting the importance of community-centric values.
Farmland inheritance tells another story. The average price of farmland, especially within Saskatchewan, has dramatically increased, nearly doubling since 2016. This rise leads families to face tough decisions about whether to retain their agricultural legacies or sell for significant profit. Donovan Tofin, who provides advice to farming families, notes the changing perspectives, stating, "Looking back at my career... it was basically, well, which one of you poor souls got to stay in farming? Today it's the opposite; the kids know there's considerable wealth involved.”
Some Canadians are considering how to give back rather than hoarding their inherited wealth. Organizations like the South Saskatchewan Community Foundation assist individuals to create charitable funds, aiding local communities and addressing disparities. Young inheritors, like University of Saskatchewan medical student Jess Klassen, who received a $300,000 inheritance, articulate their desire to explore philanthropy and wealth redistribution. Jess joined Resource Movement, which educates individuals on effective charitable giving strategies.
Unlike many other G7 countries, Canada does not have inheritance tax, which means this monumental wealth shift remains largely untaxed aside from capital gains. Willoughby suggests examining other nations' inheritance tax models, emphasizing the increasing need for wealth distribution as inequality persists. "For generations we have hung our hat on this notion... until the CRA changes... I think we are far from having an inheritance tax" said Willoughby.
Canada's wealth transfer is posing numerous questions: Will it lead to increased prosperity for all, or will it drive the economic divide even wider? The path forward relies heavily on how society, policymakers, and inheritors choose to respond to this historic moment at hand.