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Posthaste: Wealth is no longer about rich versus poor, but homeowner versus renter


Good morning!

Homeownership, long considered the great wealth equalizer, might actually lead to greater wealth inequality between those who were lucky enough to have parents who owned homes and those who weren’t so fortunate, said a new report from Toronto-Dominion Bank.

“On the surface, Canada might appear to be doing quite well on inequality, but digging beneath that surface shows that we have merely papered over the fissures that separate Canadians along housing lines,” said report authors Beata Caranci, vice-president and chief economist, Francis Fong, senior economist, and research analyst Mekdes Gebreselassie.

To make their point, the authors focused on a group of Canadians born between 1955 to 1964. Based on data for that group from the Survey of Financial Security, the trio estimated that by 2019, the average net worth of homeowners was more than $1.4 million, or $1.2 million greater than that of the average non-homeowner.

“Back in 2005, this gap was just $498,600, highlighting the wealth-generating advantage posed by real estate,” the authors said.

But, don’t misunderstand, the authors said. Real estate’s wealth-building capacity has been a good thing for a lot of people. The sector’s share of total assets has risen from 37 per cent in 2005 to 45 per cent today, the report said. The authors credited housing with reducing the share of wealth controlled by the one per cent and 10 per cent of wealthiest households, while increasing the share of the pie for the bottom 30 per cent.

Only 12 per cent of the bottom 30 per cent are homeowners. Notably, the share of people aged 25 to 34 in that group is up three percentage points since 2005, suggesting younger people are purchasing homes at about the same rate as they have in the past. However, they tend to be high-income earners carrying a heavier debt load due to the rising cost of homeownership.The mortgage stress test, which requires that a prospective buyer qualify for a rate higher than the one for which they have been approved, could also account for why these higher income individuals have landed in the lower net worth bracket, the TD report said.

Caranci and her co-authors note that it’s somewhat surprising that homeownership among younger people has held up even as housing has become less affordable. However, they contend this group has an ace in the hole, citing research that indicates that younger people whose parents own homes are more likely to own homes themselves. “A growing body of research points to the role of parental wealth in perpetuating unequal access to homeownership,” Caranci, Fong and Gebreselassie said.

They cited a survey done in Ontario in 2020 that found 41 per cent of parents with adult children under the age of 38 helped purchase a home for their children. The average gift, the survey showed, was more than $73,000. The average loan was $40,000.

Caranci and her co-authors also pointed to U.S. research that revealed a 17.3-percentage-point gap in homeownership rates between millennials whose parents were homeowners and those whose parents were renters. Even when correcting for age, household income, education level, marital status and race, the gap remains at 8.4 percentage points, the trio wrote.

Parental homeownership has other perks, too. It gives children access to higher education, better economic options and “a higher perceived socioeconomic status, the authors said, citing research carried out in 2019 that looked at several generations of Norwegian families.

“The current generation of young Canadians is likely to not just repeat, but accentuate the narrative of wealth inequality across housing lines with affordability now at its worst levelin decades,” the report said. “The lengths to which young households have to go to acquire housing is becoming untenable without a starting point of higher income relative to peers and/or a transfer of intergenerational wealth, commonly in the formof parental wealth.”


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DRIVERLESS DELIVERY For about two-and-a-half years, Loblaw Cos. Ltd. has been working with Gatik Inc., an autonomous technology company based in Silicon Valley, to run a fleet of five driverless trucks guided by cameras, laser sensors and sonar. Now, all five trucks are driving around Toronto, 12 hours a day, with an empty driver’s seat, which Loblaw said is a first for autonomous commercial delivery vehicles in Canada. The hope is that by next year, the trucks will run without any humans in them at all, making Loblaw’s e-commerce deliveries more efficient and less reliant on a tightening labour pool, writes Financial Post’s Jake Edmiston. For now, though, there is a safety driver in the passenger seat as a precaution. Photo by Peter J. Thompson/National Post


  • Bank of Montreal hosts global high yield conference

  • Bank of Canada governor Tiff Macklem to give a speech to the Halifax Chamber of Commerce

  • The parliamentary budget officer will release a report entitled “Cost Estimate for Bill C-18: Online News Act” on the website at

  • Jean Gattuso and Louise Yako, co-chairs of the National Supply Chain Task Force, will hold a news conference to provide details on their final report on how to make our supply chain stronger and make life more affordable for Canadians

  • Canada Mortgage and Housing Corp. on labour capacity constraints in the construction industry and supply across large provinces in Canada

  • The standing committee on official languages meets about Bill C-13, An Act to amend the Official Languages Act, to enact the Use of French in Federally Regulated Private Businesses Act and to make related amendments to other Acts

  • Monte McNaughton, Ontario minister of labour, immigration, training and skills development, will make an announcement about combatting the labour shortage in construction

  • Joel Lightbound, Liberal MP for Louis-Hebert, hosts a presentation on artificial intelligence

  • The Economic Club of Canada and the Ontario Securities Commission host an event to discuss regulatory oversight of the crypto industry and its critical role for our capital markets and outline the OSC’s path forward under its new structure and expanded mandate

  • Ravi Kahlon, B.C. Minister of Jobs, Economic Recovery and Innovation, Adam Walker, Parliamentary Secretary for the New Economy, and others will make an announcement about supports for the restaurant industry

  • B.C. Premier John Horgan, together with California Gov. Gavin Newsom, Oregon Gov. Kate Brown and Washington Gov. Jay Inslee, will further expand the region’s climate partnership through the signing of a new climate agreement in San Francisco

  • Today’s data: Canadian Ivey Purchasing Managers Index; U.S. initial jobless claims and continuing claims

  • Earnings: Levi Strauss and Co., Constellation Brands Inc., ConAgra Foods Inc., Richelieu Hardware Ltd.





September home sales in the Greater Toronto Area were down 44.1 per cent from a year ago while sales and average prices declined sequentially from August, according to monthly figures released by the Toronto Regional Real Estate Board (TRREB) on Wednesday.

Meanwhile, the MLS Home Price Index (HPI) Composite benchmark reported an increase on a year-over-year basis of 4.3 per cent to $1,110,700 in September while the average price tumbled from $1,135,027 to $1,086,762 over the same period of time.

Read Shantaé Campbell’s story here.



Instalment plans have been around for a long time but have grown to cover a wider variety of purchases. While traditional instalment plans required lengthy application processes and were only used for large ticket items, these days they offer far greater flexibility and can be used for almost any purchase over $100. Our content partner MoneyWise unravels how instalment plans work and unpacks whether they are a financial win or a woe.


Today’s Posthaste was written by Gigi Suhanic (@gsuhanic), with additional reporting from The Canadian Press, Thomson Reuters and Bloomberg.

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