Canada’s richest got richer through the depression that began in 2008

Almost nine out of every 10 Canadians feel that the rich should pay more taxes. (Toronto poll: 31 May 2013)

According to a study by BMO Harris Private Banking, high-net worth Canadians (those with investible assets of $1 million or more) believe they are more financially secure today than they were before the 2008 recession. The study is the second in a series by BMO Harris Private Banking examining trends among the affluent in Canada.

The study found that the majority of affluent Canadians (54 per cent) feel they are better off now than they were before September 2008, with only 11 per cent saying they are worse off and 36 per cent reporting that their financial situation is unchanged. This compares with 61 per cent of high-net worth Americans reporting they are better off and only seven per cent stating they are worse off.

The study also revealed that almost half (47 per cent) of high-net worth Canadians expect Canada’s economy to improve in 2013; meanwhile sixty-one per cent are optimistic about what the future holds for the U.S. economy. Fifty-five per cent expect to see gains in Asia and one-in-five (19 per cent) expect the financial situation in Europe to improve. Interestingly, affluent Americans are more optimistic about what the future holds for the Canadian economy than their neighbours up north, with 61 per cent stating that they expect increased prosperity for Canada.

“High-net worth Canadians clearly feel they have bounced back well from the 2008 downturn and are fairly upbeat about what the future has in store for Canada’s economy,” said Alex Dousmanis-Curtis, Senior Vice President and Head, BMO Harris Private Banking. “However, we’re also hearing from many of our clients that they remain somewhat concerned about global market fluctuations. They want to work with us to insulate their wealth – as best as possible – against a downturn.”

Canada’s Affluent are Happy with Their Portfolios and are Spending More

The study also found that 86 per cent of high-net worth Canadians say they are quite comfortable with their current savings and investment plan. Seventy per cent expect stocks to generate the most solid returns over the next five years, well ahead of real estate (39 per cent), bonds (24 per cent) and cash (19 per cent).

Canada’s affluent are most bullish about the financial (76 per cent) and energy (75 per cent) sectors but are apprehensive about the manufacturing (30 per cent) sector. This differs from their American counterparts who feel more positive about the technology/IT (80 per cent Americans vs. 64 per cent Canadians) and manufacturing (50 vs. 30 per cent) sectors.