The financial services sector: a source of growth for Canada's economy

OTTAWA, Nov. 26, 2015 /CNW/ - The financial services sector directly accounted for 780,000 jobs and 6.8 per cent of Canada's gross domestic product (GDP) in 2014, according to a new Conference Board of Canada report released today.

"The financial services sector has been a strong source of growth for the Canadian economy over the past decade," said Michael Burt, Director, Industrial Trends, The Conference Board of Canada. "The sector's employment, financial results, and international trade and investment performance, have outpaced the average for all other sectors."

Highlights

• Canada's financial services sector is innovative. According to Statistics Canada's Survey of Innovation and Business Strategy, 73.6 per cent of financial services firms had undertaken some form of innovation in the previous year versus 63.5 per cent for all sectors.
• Compared with their international peers, Canadian deposit-taking institutions have healthy levels of capital adequacy and liquidity, with high rates of return and low levels of non-performing loans. This contributes to Canada consistently being listed as having the soundest financial system in the world.
• Toronto is Canada's largest financial services hub; more than 30 per cent of all financial services headquarters are located in Toronto. Also, the sector directly employed over 250,000 people in the Toronto in 2014.

The report, An Engine for Growth: 2015 Report Card on Canada's and Toronto's Financial Services Sector, reveals that Canada's financial services sector is heavily concentrated in Toronto and this trend is on the rise. For example, more than 30 per cent of all financial services headquarters are located in Toronto, which is more than double the share of Vancouver (13.2 per cent), its closest competitor. As well, the share of financial services employment in the metro Toronto area has risen from 28.2 per cent in 2004 to 32.3 per cent in 2014. Finally, the sector is very important to Toronto's economy. It directly accounts for 13.3 per cent of metro Toronto's GDP. Only the public services sector is larger.

Not only is Toronto the largest financial centre in Canada, it ranks highly compared to other global financial centres. The Banker magazine ranked Toronto seventh globally and second among financial centres in North America.

In addition to the direct economic effects, Toronto's financial services sector also generated indirect effects in key industries including consulting, accounting, legal services and computer services. Once the indirect impacts are added, Toronto's financial services sector supported 358,000 jobs in the metro Toronto area. In terms of tax revenues, the Conference Board estimates that Toronto's financial services sector generated a combined $15.7 billion for the federal, provincial and municipal governments.

The report, An Engine for Growth 2015 Report Card on Canada's and Toronto's Financial Services Sector, was funded by the Toronto Financial Services Alliance and is available from the Conference Board's e-Library.

 

SOURCE Conference Board of Canada

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