Getting reacquainted with our finances, and talking about them

November is Financial Literacy Month in Canada—a time for Canadians to strengthen their financial knowledge and skills, with the goal of improving their financial well-being.

Let’s have a look at the latest financial snapshot of Canadians, who have faced ever-increasing price pressures that aren’t always matched by upticks in income.

Income gap at a record high as net saving rates and disposable income decline

First, let’s get a sense of where Canadians are at in terms of income, savings, disposable income and debt.

The income gap between the top 40% and the bottom 40% of the income distribution remained at a record high of 48.4 percentage points in the second quarter of 2025, relative to a year earlier.

Disposable income grew by an average of 3.9%, down from an annual increase of 5.9% in the second quarter of 2024, in large part caused by weaker wage earnings in several sectors.

Though disposable income grew at a faster-than-average pace (+5.6%) for the lowest-income households, it was mainly because of an increase in transfers from government, such as various benefits and income support measures.

The debt to disposable income ratio measures how much debt households have compared with their available income after taxes and other deductions. A higher ratio means households have more debt relative to their disposable income.

Canadian households held an average of $1.82 of debt per dollar of income in the second quarter, unchanged from the same quarter of 2024 ($1.82) but less than the second quarter of 2023 ($1.90). This ratio was higher for younger households, those with lower income and those with a mortgage.

Net saving worsened for households across all five income quintiles, marking it the first time this has occurred since inflation reached a 40-year high (on an annual average basis) in 2022—as measured by the Consumer Price Index, Canada’s official measure of inflation.

Median income ticks down slightly in 2023 while household spending increases

Our latest data on income from 2023 (T1 Family File) indicate that the average after-tax income of census families and persons not in a census family edged down to $82,610 in 2023 (-0.1%) after adjusting 2022 data for inflation.

Declines in government transfers and average employment income were factors in the composition of income, along with increases in average dividend and interest income, and lower average income taxes paid. The share of low-income Canadians held steady.

The Survey of Household Spending (SHS) gives us detailed insight into household expenditures every two years. The latest data are from 2023, when Canadian households spent an average of $76,750 on goods and services, up 14.3% from 2021 and the largest two-year increase on record since the inception of the SHS in 2010.

Expenditures increased for food purchased from stores (+7.4%) and for transportation (+19.7%), driven largely by an increase in spending on public transportation coming out of the COVID-19 pandemic.

Homeowners spent an average of $27,831 on shelter (+17.4%), driven by an increase in mortgage payments caused by higher interest rates. Renters spent less ($18,333), but the increase was at a faster pace (+20.2%).

Affordability challenges: Housing and day-to-day expenses

If you’re concerned about affording shelter and day-to-day expenses, you’re certainly not alone.

In August and September of 2024, nearly half of Canadians (45%) reported being very concerned about housing affordability because of the rising costs of housing or rent, according to findings from the Canadian Social Survey (CSS).

In the spring of 2025, the CSS found that nearly one in four (24.1%) Canadians reported that it was easy or very easy for their household to meet its financial needs, down from nearly half (47.7%) compared with the summer of 2021.

Improving financial literacy

So, the question remains: how can we improve our financial literacy in the face of ever-present challenges to our finances? It starts with talking about it.

This year’s Financial Literacy Month campaign is “Talk Money”—a call to action to encourage open conversations about money across Canada, breaking down the stigma that often surrounds financial discussions. Our colleagues at the Financial Consumer Agency of Canada have more information and resources to guide those discussions.

Check out StatCan’s Personal Inflation Calculator, an interactive tool that can help you understand your unique experience of inflation.