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You can save this article by registering for free here. Or sign-in if you have an account.Real estate remains the top share of wealth in Canadian households, but it is losing ground. Photo by Getty ImagesSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorFor all the challenges Canada’s economy has faced in recent years, the Canadian consumer has remained “resilient” in adversity.“Consumer confidence surveys have rarely looked worse. Wages for many workers are barely keeping pace with prices. And yet spending keeps climbing on both sides of the border,” said Helen Lao, an economist at CIBC Capital Markets in a recent report.The explanation for this is no mystery, she said, it’s “sitting in household balance sheets.”Breaking business news, incisive views, must-reads and market signals. Weekdays by 9 a.m.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Posthaste will soon be in your inbox.We encountered an issue signing you up. Please try againHousehold wealth in both Canada and the United States hit record highs in the first quarter of 2026, topping $183 trillion in the U.S. and $18.6 trillion here.“In both countries, rising wealth has been quietly doing the work that stagnant wages and shaky confidence can’t,” said Lao.But for how long? The fastest growing source of that wealth over recent years has been equities or the stock market.Equities made up about 23 per cent of household assets in the U.S. in 2010. By the middle of that decade stocks had surpassed real estate and today their share has shot to 35 per cent, the largest component of total household wealth in America.In Canada equities as a share of household wealth has risen from 26 per cent in 2010 to 32 per cent in the first quarter of 2026, a six per cent increase.For Canadian households, real estate remains the biggest share of wealth, but it is losing ground. In 2012 it peaked at 52% but has steadily declined to 46 per cent in early 2026 as home prices fell.How this all affects consumer spending and the economy involves something economists call the wealth effect.“When portfolios and asset prices swell, people spend more of their income and save less of it — the textbook “wealth effect” on consumption,” said Lao.CIBC calculates that the equities wealth effect will account for 30 per cent of real consumption growth in the United States this year, almost double the 18 per cent in 2024.In Canada the equities wealth effect has risen from 18 per cent of consumption growth in 2024 to an estimated 35 per cent in 2026.The same, however, can’t be said for real estate, where falling home prices have been eroding the wealth.“In contrast to equities, real housing wealth levels have turned south in both the U.S. and Canada, and are thereby cutting into consumer activity,” said Lao.Especially in Canada — not only does real estate comprise a bigger share of Canadians’ wealth, its housing market has been harder hit than America’s, pushing the real estate wealth effect into the negative.“In other words, real estate wealth is expected to be a significant drag on real consumption growth for Canada in 2026,” said Lao.Overall, the wealth effect is expected to be a tailwind for spending growth in the United States this year, and a headwind for Canada.Still, CIBC warns that wealth effects are weakening in both countries as slower home price growth reduces real estate wealth.“As a result, the wealth effect is likely to provide less support for U.S. consumption in upcoming quarters, and remain a headwind for consumer spending in Canada,” said Lao.Sign up here to get Posthaste delivered straight to your inbox.We talk a lot about Canada’s exports to the United States, but what about what the U.S. sells to Canada?The average Canadian tariff rate on imports from the U.S. is about 1.5 per cent, according to Bank of Canada estimates — far lower than the 5 per cent on Canadian goods going the other way.What’s notable, says BMO Capital Markets chief economist Douglas Porter, is that even with the lower tariff rate U.S. exports to Canada have dropped about 5 per cent in the past 18 months.The share of U.S. exports coming into Canada has fallen to under 14 per cent this year, down from 18 per cent in 2024 and 22 per cent when NAFTA was signed.“While that share had been falling fairly steadily in the prior 15 years, it has broken notably lower since the start of 2025,” said Porter.Today’s Data: United States durable goodsEarnings: Air Canada, TFI International Inc., Gibson Energy Inc., First Capital REIT, Nucor Corp., Celestica Inc.Buying stocks is never easy. It puts your hard-earned money at risk and stocks can go down, sometimes a lot. Investors often lament that they seem to always buy stocks just before they decline. Before you buy, investing pro Peter Hodson offers five things for investors to consider. Find out moreInterested in energy? The subscriber-only FP West: Energy Insider newsletter brings you exclusive reporting and in-depth analysis on one of the country’s most important sectors.Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at wealth@postmedia.com with your contact info and the gist of your problem and we’ll find some experts to help you out while writing a Family Finance story about it (we’ll keep your name out of it, of course).Want to learn more about mortgages? Mortgage strategist Robert McLister’s Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his mortgage rate page for Canada’s lowest national mortgage rates, updated daily.Visit the Financial Post’s YouTube channel for interviews with Canada’s leading experts in business, economics, housing, the energy sector and more.Today’s Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff and Bloomberg.Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at posthaste@postmedia.com.Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. 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