According to CIBC, 31 per cent of first-time homebuyers in Canada in 2024 received financial help from family members to buy a home. (Mark Blinch/Reuters)
Canada is experiencing a historic wealth transfer as baby boomers pass down assets to their children. Unprecedented Wealth Shift! According to the Chartered Professional Accountants of Canada, nearly $1 trillion is expected to move between generations from 2023 to 2026.
A significant portion of this wealth stems from real estate. Rising home prices have boosted the financial standing of baby boomers, allowing them to pass down substantial assets to their millennial and Gen X children.
Impact on the Housing Market
Keith Willoughby, dean of the Edwards School of Business at the University of Saskatchewan, calls this transfer a “trillion-dollar tsunami” with widespread economic effects.
In cities like Toronto and Vancouver, where property values have soared, this trend is particularly visible. Even Saskatchewan is witnessing a similar pattern. Many young Canadians are using their inheritance to enter the housing market, either through direct purchases or parental financial support.
With Canada already facing a housing shortage, this influx of wealth is driving up demand and home prices. Willoughby explains that without an increase in housing supply, property values will continue to rise.
Growing Dependence on Family Support
A report from CIBC highlights the increasing reliance on family wealth. In 2024, 31% of first-time homebuyers received financial help from relatives—up from 20% in 2015. The average monetary gift has also surged to $115,000 in 2024, compared to $66,000 in 2019.
This trend is widening the wealth gap. A 2023 Statistics Canada study found that millennials with homeowner parents are twice as likely to own a home themselves compared to those whose parents were renters.
The ‘Status Fog’ Phenomenon
The uneven distribution of inherited wealth is creating societal tensions. Willoughby notes that wealth accumulation is no longer just about hard work—it often depends on being born into the right family.
Writer Katrina Onstad describes this perception gap as "status fog", where invisible wealth distorts how we perceive someone’s financial status. This can make it difficult to define a true middle-class lifestyle in Canada today.
Rising Farm Values and Family Tensions
In Saskatchewan, soaring farmland prices have made inheritance a contentious issue. Statistics Canada reports that the average price per acre has nearly doubled since 2016.
Wealth management advisor Donovan Tofin estimates that the average farm is now worth over $3 million. With such high values, families must decide whether to sell the farm or pass it down, often leading to difficult discussions.
"In the past, staying in farming felt like a burden," says Tofin. "Now, children see the wealth potential but don’t always know the exact value."
The Unequal Distribution of Wealth
Not all Canadians will benefit from this wealth shift. Newcomers and Indigenous communities, who were historically excluded from homeownership and business opportunities, have little generational wealth to pass down.
Jason Bird, a business professor at First Nations University of Canada, notes that many Indigenous people lack a boomer generation to inherit wealth from. "In Indigenous communities, wealth is about sharing. The more you have, the more you can give," he explains.
Turning Inheritance into Donations
Some Canadians are choosing to redistribute their inherited wealth.
Donna Ziegler, from the South Saskatchewan Community Foundation, helps individuals convert wealth into charitable funds that support communities. Similarly, Jess Klaassen-Wright, a U of S medical student who inherited $300,000, is exploring ways to donate a portion of their wealth through an initiative called Resource Movement.
Should Canada Consider an Inheritance Tax?
Unlike other G7 nations, Canada has no inheritance tax. Willoughby believes studying other countries' models could be beneficial.
"For decades, we’ve focused on taxing income, not wealth," he says. "It may be time to explore how an inheritance tax could address growing disparities."
As Canada navigates this massive wealth transfer, its long-term impact on housing, wealth inequality, and taxation policies remains a topic of debate.
