Canadian Household Wealth Shift Towards Equities Fuels US Consumption Growth

Canadian households' wealth is shifting, and it's having a significant impact on the economy. According to Helen Lao, an economist at CIBC Capital Markets, consumer confidence surveys have rarely looked worse, yet spending continues to climb.

The explanation for this resilience lies in household balance sheets, which hit record highs in both Canada and the United States in the first quarter of 2026. The fastest-growing source of wealth over recent years has been equities, or the stock market, making up about 23% of household assets in the U.S. in 2010.

In the United States, stocks have surpassed real estate and now make up 35% of total household wealth. In Canada, equities as a share of household wealth has risen from 26% in 2010 to 32% in the first quarter of 2026.

However, for Canadian households, real estate remains the biggest share of wealth but is losing ground, declining from its peak of 52% in 2012 to 46% in early 2026 due to falling home prices. Economists refer to this phenomenon as the 'wealth effect.'