A new Global Wealth Report from Credit Suisse predicts outsize growth in Canadian millionaires in coming years. In fact, over the next five years, the number of millionaires is predicted to grow by as much as 54 percent.
This would put the number of Canadian millionaires at close to two million by the year 2023. While millionaires are used as a sign of a nation’s wealth, some might see the high percentage of Canadians with wealth between $100,000 and $1 million at 46.6 of the population compared to the world’s less than 10 percent, as an even stronger sign of the nation’s riches.
Global Wealth Report 2018
The Credit Suisse Global Wealth Report is one measure of the wealth of a nation including the number of millionaires. For those who consider millionaire numbers a positive sign, the news is exceptionally good this year. While Canada has seen slow steady growth since 2000, in contrast to a powerhouse like the U.S. where the “boom goes on” or Brazil where wealth is dropping, with millionaire numbers expected to rise. In fact, Canada is expected to see around 54 percent growth in the number of millionaires (in USD) over the next five years.
The Global Wealth Report 2018 calculates wealth as a combination of financial holdings and real estate minus debt to figure net worth. Per adult Canadians average $288,263 in wealth with the median at a much lower $106,342. So those in the upper reaches have quite a bit on hand including the 1,289 who are currently classed as millionaires. Yet, by contrast, the median of wealth in the U.S. is only $61.670, much less than that of Canada where income inequality is much lower.
In addition, Canada has a much lower percentage of people with less than $10,000 than does the U.S. and a much higher percentage that are above $100,000. And on a world scale Canada beats out most nations for wealth levels between $100,000 and $1 million at 46.6 percent to the world’s average of less than 10 percent.
A big reason for the wealth of Canadians is the rising value of real estate especially in cities such as Toronto and Vancouver. But troubles may lie ahead for the projected growth in millionaires. Interest rates are rising which is always a problem for real estate. In addition, trade issues with the U.S. and lower prices for Canadian oil may be problems for the nation’s economy.
Other reports add perspective
There are additional perspectives available on the wealth of Canadians. Two other reports are also worth considering. One is the World Ultra Wealth Report from New York-based Wealth X. The other is Born to Win from the Canadian Centre for Policy Alternatives.
The Wealth X report comes out annually and focuses on the riches of the ultra wealthy. The World Ultra Wealth Report 2018 found that overall, there was a strong increase in the numbers of ultra-wealthy individuals in 2017 defined as those whose net worth stands at $30 million or more. In 2017 that number rose 12.9 percent to 255,810 people.
In Canada, the growth of the ultra-wealthy was even higher in 2017 at 13.9 percent raising the number of ultra-high net worth Canadians to 10,840. That number put Canada in fifth place worldwide not by percentage points but in an overall number of very rich individuals. Canada was beaten only by China, Germany, Japan, and the U.S.
One significant factor in Canadian wealth is the absence of an inheritance tax giving it a distinct advantage over many European nations. In addition, the report credits Canada’s growth in ultra-wealthy individuals to “an improving domestic economy, higher market yields, and a stronger currency.”
A strongly contrasting perspective was taken by the July 2018 report from the Canadian Centre for Policy Alternatives titled “Born to Win.” This report strongly contrasts the riches of the wealthy to that of the rest of Canada’s citizens viewing that contrast as a sign of weakness rather than strength.
The report connects the lack of inheritance tax and other taxation methods that favor the rich to an ever-increasing divide between the extremely wealthy, average Canadians and those with lower incomes. Though real estate is a sign of wealth, property taxes disproportionately work against Canada’s middle class. For the Canadian Center for Policy Alternatives, Canada’s overall wealth would only be increased by finding more equitable tax solutions.
Many ways to look at wealth
One can consider a nation as wealthy based on its richest individuals or on the fortunes of its citizens as a whole. While Canada does have many contrasts and differences between richest and poorest, it also has less income inequality than such nations as the U.S. and China which boast great numbers of citizens, immense wealth and a large number of the poor.
Though Canada is certainly not perfect, the possibility of finding a healthy balance between financial opportunity and basic support for all citizens’ needs seems closer at hand than it is for countries that often appear to have so many more resources at hand.