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Once you get past B.C., Ontario and Quebec, the average inheritance was less than $100,000 over the past decade for those 50 to 75.

(Those inheritance numbers were pulled from an online Angus Reid survey conducted April 26-27 of 1,003 panelists ages 50 to 75 who have received an inheritance, and is considered accurate to within 3.1 percentage points, 19 times out of 20.)

Tal said the distribution of inheritance is “abnormal,” with the average inheritance for those making $100,000 or more almost three times higher than lower-income Canadians. The average inheritance for Canadians has been almost four times higher than the median income over the last 10 years.

“The larger proportion of the looming bequest boom that is expected to go to high-income Canadians suggests that income inequality will be further transformed into wealth inequality,” suggests Tal, noting that 40 per cent of high-income individuals suggested they saved or invested their inheritance while a larger proportion of low-income Canadians are likely to use it for daily expenses.

The transfer of wealth will help the retirement security of low- and middle-income Canadians, but is likely to have little impact on the decision of wealthy Canadians to retire early, because they don’t need the money.

Tal says inheritance will likely stimulate labour supply by encouraging self-employment by eliminating liquidity restraints on startups.



Tal said there is no doubt that some older Canadians are passing on their wealth within their lifetime, and some of it is already responsible for elevated housing prices and will continue to keep prices high. “It will pay for down payments, for renovations,” he said in an interview.

In his paper, Tal suggests the impact on real estate markets will be gradual and, in some cities like Vancouver and Toronto, might increase the supply of low-rise properties.

“Given elevated real estate values, it’s reasonable to expect that a large proportion of projected inheritance will be transferred as inter-vivos gifts — a factor that might have positive impact on home ownership rates among younger Canadians and would probably increase overall spending on renovations,” concludes Tal in his paper.

gmarr@nationalpost.com

Twitter.com/dustywallet