Intergenerational Wealth Transfer Underway in Quebec

Quebec is reportedly experiencing the largest intergenerational wealth transfer in its history. While many details remain unknown, it is clear that this transfer of wealth has already begun and is likely to benefit the wealthiest individuals.

As of the end of 2023, Quebecers aged 65 and older held a total net worth of nearly $1 trillion, according to Statistics Canada. This amount is three and a half times higher than it was 25 years ago, even when adjusted for inflation. While it is hoped that these individuals will be able to enjoy their accumulated real estate and financial assets for as long as possible, it also indicates a significant transfer of wealth to the following generations.

This phenomenon is not unique to Quebec. Last fall, the insurance and financial services company Sun Life also referred to it as “the most significant wealth transfer from one generation to the next in Canadian history.” The same sentiment has been echoed in the United States and several other economies.

Various factors contribute to this trend, according to experts. The demographic aspect, with the mass of baby boomers currently aged between 59 and 78, plays a significant role. This generation had fewer children than their parents, experienced periods of economic growth, and benefited from a substantial increase in house prices and financial assets in recent decades.

In Quebec, these factors have been further influenced by other changes, including those brought about by the Quiet Revolution, which expanded the economic horizons of a French-speaking population with previously modest incomes and assets.

Unfortunately, precise statistical data to accurately measure the ongoing and future wealth transfer are scarce. The measurement of accumulated wealth for certain segments of the population, especially the top 1% or 0.1% of the wealthiest individuals, is challenging due to their small numbers and the sometimes ambiguous nature of their assets.

The distribution of this wealth is uneven, with the richest individuals holding a significant portion. It is expected that as individuals age and build their wealth, the concentration of wealth will increase, and it will begin to decrease once they reach retirement and start using their reserves.

The implications of this intergenerational wealth transfer raise numerous questions, both at the individual and societal levels. With the concept of inheriting wealth being relatively new for most Quebecers and relatively few legal constraints in place, individuals must navigate the rules guiding their decisions on inheritance.

In conclusion, the ongoing and anticipated intergenerational wealth transfer presents challenges and opportunities for Quebec and its residents. As the transfer unfolds, it will be essential to address issues of wealth inequality, taxation, inheritance laws, and social welfare to ensure a fair and equitable distribution of assets across generations.