Introduction

Statistics Canada regularly publishes macroeconomic indicators on household assets, liabilities and net worth as part of the quarterly National Balance Sheet Accounts (NBSA). These accounts are aligned with the most recent international standards and are the source of estimates of national wealth for all sectors of the economy, including households, non-profit institutions, governments and corporations along with Canada’s wealth position vis-a-vis the rest of the world. While the NBSA provide high quality information on the overall position of households relative to other economic sectors, they lack the granularity required to understand vulnerabilities of specific groups and the resulting implications for economic well-being and financial stability.

There is a growing recognition, both in Canada and internationally, that building distributional dimensions into household macroeconomic indicators is becoming increasingly important. If information on disparities among households is consistent with macroeconomic indicators, it enriches the understanding of economic developments and allows for a more complete assessment of the risks associated with for example, rising inequality of income, consumption, saving and wealth.

Recent comprehensive revisions to the Canadian System of Macroeconomic Accounts published in 2012 and 2015 better positioned the macroeconomic statistical program to undertake this work. Changes were introduced to align measures with new international standards, including the creation of a separate sector for non-profit institutions serving households, (previously included in the household sector) and the measurement of employer-sponsored pensions on an entitlement basis. More detail on the changes made during the revisions in 2012 and 2015 can be found in Revisions analysis – Canadian System of National Accounts 2012 and Results from the 2015 Comprehensive Revision to the Canadian System of Macroeconomic Accounts.

This documentation outlines the steps towards a program of annual wealth distributional estimates for the household sector in the Canadian macroeconomic accounts; those estimates will be referred to as “Distributions of Household Economic Accounts”. It describes the sources and methods for the compilation of the estimates of household assets, liabilities and net worth. These estimates have been further developed and refined relative to earlier releases. Distributions of income, consumption and saving are also produced and are part of the DHEA ongoing statistical program. More detail can be found in the Sources and methods guide related to income, consumption and savings distributions.

The documentation is organized as follows: the first section describes the primary data source used to establish household distributions of wealth, the Survey of Financial Security (SFS). The subsequent sections describe the general estimation process in the years for which survey information is available, which follows recommended international practice, and how wealth distributions are estimated using a modelling approach in the intervening years for which survey information on wealth distributions is not available. The final section describes future enhancements planned to further validate and improve the wealth estimates, and to integrate wealth with income, consumption and saving.