The wealth of Canadian families increased substantially from 1999 to 2005, but families are also carrying a much higher debt load, according to the results of a survey released today by Statistics Canada.

The survey found that the median net worth of the nation’s estimated 13.3 million “family units” amounted to about $148,400 in 2005, up 23.2% from 1999, after adjusting for inflation.

Total assets, everything from stocks and bonds to principal residences, amounted to almost $5.6 trillion, up 42.4% between 1999 and 2005. The increase was due primarily to favourable economic conditions, a strong real estate market and a rebound in the stock markets.

The main contributor was the increase in the market value of real estate, largely the result of price increases. The second largest contributor was assets held in private pension instruments, such as employer pension plans, RRSPs and RRIFs. The increase in this category was driven largely by sharp gains in the value of employer pension plans.

The single most important asset for Canadians was their principal residence, which accounted for one-third of the $5.6-trillion total. This was followed by employer pension plans, which represented 18.5% of all assets.

A significant change in the composition of assets during this six-year period was growth investments in real estate such as cottages, timeshares, rental properties and other commercial properties. The aggregate amount in this type of real estate was $481 billion in 2005, roughly 1.8 times what it was in 1999, in constant 2005 dollars. This was by far the largest rate of growth of any asset type.

About 9.4 million families, or 70.6% of the total, had some form of pension assets in 2005, whether they were employer pension plans, RRSPs or RRIFs. In total, pension assets peaked for families in which the major income recipient was aged between 55 and 64.

However, debt grew even faster than assets. Canadians had debts estimated at $760 billion in 2005, increasing by 47.5%. This was largely due to two factors: the increase in the cost of purchasing a home and the increase in the proportion of families who owned a home with a mortgage.

Three-quarters of this debt took the form of mortgages. Loans in the form of lines of credit more than doubled during the six-year period, and accounted for 9% of all debt. Loans on vehicles accounted for 6.1% of the total, credit card debts 3.4% and student loans 2.6%. Between 1999 and 2005, the median debt load for families rose 38.0% from close to $32,300 to $44,500.

The median value of mortgages on the principal residence amounted to $90,000 in 2005, up 17.5% from $76,600 in 1999. The second largest contributor to the increase in debt load was lines of credit, which more than doubled during the six-year period to roughly $68 billion. About 3.3 million families, one-quarter (24.9%) of the total, reported having a line of credit debt in 2005, up from only 15.4% in 1999. The median line-of-credit debt surged from $5,800 to $9,000. Much of the increase was secured by residential assets in the form of home equity.

Families reported holding about $46 billion in loans on owned vehicles, a 41.3% increase, and $25.8 billion in outstanding credit card and installment debt, up 58.4%. Student loans approached $20 billion, a 15.8% increase. Almost 11 million families reported owning at least one credit card last year. The median credit card and installment debt rose to $2,400 from $2,100.

StatsCan also noted that an estimated 3.9 million Canadian units, 29% of the total, had no private pension assets in 2005. The proportion was somewhat lower for economic families, 21.5%, those which consist of two or more people related to each other. However, 45.2% of unattached individuals had no pension assets.

The majority of families with no private pension assets had lower income from employment. Among economic families with a major income recipient in the prime working age of 25 to 64, 16.6% had no pension savings. However, among those with earnings below $30,000, the proportion was nearly 64%.

As well, most families with no private pension assets were relatively young. They were far from retirement and had time to accumulate assets. Close to 6 in 10 family units (57.9%) with no private pension assets had a major income recipient younger than 45.

@page_break@The Survey of Financial Security was conducted between May and July 2005. It collected new information on the assets and debts of families and individuals in Canada.