The good news is that newcomers to Canada are laughing all the way to the bank, the bad news is they are carrying a riskier amount of debt compared to other Canadians.
As a result of that risk however, immigrant families have also accumulated more wealth.
The agency’s report, “The Wealth of Immigrant Families in Canada,” found that “established” immigrants are slightly wealthier than Canadian-born households, with an average net worth of $1.06 million in 2016.
StatsCan defined “established immigrant family” as one where the major earner is 45 to 64 years old and has been in Canada for at least 20 years.
By comparison, a household with a Canadian-born major earner aged 45 to 64 had an average net worth of $979,000. Net worth is the value of all of a person’s assets, including their house, minus debts.
Canadian-born households saw their wealth rise by 88.6 per cent between 1999 and 2016, the study found, while established immigrant households saw their wealth grow by 69.6 per cent in that time.
Most of the wealth growth came from an increase in house prices and growth in the value of retirement pension plans. But the study found immigrant families are far more reliant on real estate than other families for wealth gains.
For established immigrant families, 69 per cent of wealth growth between 1999 and 2016 came from real estate. For non-immigrant families, only 39 per cent came from real estate.
Non-immigrant families with a major earner aged 45 to 64 had, on average, debt equal to 137 per cent of household income in 2016. For immigrant families, the ratio is a much higher 217 per cent.
But despite the heavier debt loads, immigrant families aren’t showing signs that they are struggling to manage their debts to any greater degree than others, StatsCan noted.
That reason why immigrant families aren’t showing signs of debt or defaulting on their mortgages is the fact that they are willing to live very frugally, work two jobs or more and will often pool in their family resources.
All this is fine as long as the housing market doesn’t collapse and at present there is no indication that anything worse than a housing slowdown is about to happen. -CINEWS