As we saw in May 2007, the middle class is a dying breed in Canada. An updated version for 2025 is available farther down this article.
This is from Stats Canada, May 2007. It reinforces the theory put forward by many economists. They suggest that in Canada, we have a disappearing Middle Class. Additionally, the gap between the “Haves” and “Have nots” continues to increase. They have, in fact, published a report, Income Inequality and Redistribution in Canada: 1976 to 2004. It is free. It is also an interesting read for those who want to know more about the topic.
A telling quote from this document is:
Using data from the 1976-to-1997 Survey of Consumer Finances and the 1993-to-2004 Survey of Labour and Income Dynamics, we examine developments in family income inequality, income polarization, relative low income, and income redistribution through the tax-transfer system. We conclude that family after-tax-income inequality was stable across the 1980s, but rose during the 1989-to-2004 period.
Income Inequality and Redistribution in Canada: 1976 to 2004.
You have already heard my rants about how the Government Hates Single Income Families. This survey kind of bears that out. They are measuring Household incomes. The traditional single income family is disappearing. The tax system rewards dual income families.
This causes a "stratification" of household income levels, making it not really a surprise. The traditional single income family is disappearing. The tax system rewards dual income families. This causes a "stratification" of household income levels. Relatively affluent dual income families are at the top of the data. Less affluent dual income families working hard to get by are in the middle and bottom.
Single income families are on the edge. There's very little "in the middle" anymore (my interpretation of the data, you can read it and decide what you think).
I think I need to do another analysis of my income from last year. I want to see how much farther ahead I would be if my wife and I had separate jobs. We aim to get the same family income that we currently enjoy.
The Disappearing Middle Class in Canada (2025 Edition)
Back in 2007, I raised concerns about the shrinking middle class in Canada. Nearly two decades later, not much has changed—except the gap is now wider and harder to ignore.
Recent data from Statistics Canada shows that income inequality is intensifying. In Q3 2024, the difference in disposable income between the top 40% and bottom 40% of households was significant, hitting a crazy 46.9 percentage points.
🏠 Middle-Income Households Are Feeling the Squeeze
Middle-income households saw wage growth of just 2.7%, while the average across all households was 3.6%. To make matters worse, rising interest payments on mortgages and consumer credit are eating away at any financial gains.
The result? A shrinking share of disposable income and mounting pressures on families already walking a financial tightrope. Noticed a few more folks worried about money lately? (Rhetorical)
💰 Wealth Concentration: The Rich Get Richer
The top 20% of households in Canada now hold 64.7% of total net worth, with an average net worth of $3.3 million per household.
In stark contrast, the bottom 40% of Canadians collectively hold just 3.3% of the nation’s net worth—an average of only $83,189 per household.
🧾 Tax Policy & the Changing Family Model
Tax policies continue to disproportionately benefit dual-income households, leaving single-income families struggling to keep up. This structural imbalance makes achieving or maintaining a middle-class lifestyle hard.
The traditional definition of “middle class” is becoming harder to pin down—not because it's evolving but because it’s eroding.
📉 What Does This Mean for the Future?
The middle class was once the engine of economic stability in Canada. But now, it’s caught in a bind. Rising costs are straining budgets. Wages remain static. Policy frameworks no longer reflect the realities of modern households.
If we don’t address the systemic factors contributing to this erosion, we risk permanent loss of a thriving Middle Class in Canada. This was once a pillar of Canadian society.
John F Kennedy said, “A rising tide lifts all boats.”
It’s too bad that this isn’t happening for the middle class. I have a related post on Stagnant Family Incomes.