The financial services sector directly accounted for 780,000 jobs and 6.8% of Canada’s GDP in 2014, finds a Conference Board of Canada report.
At 33.3%, Toronto has the largest share of financial jobs, and its portion is rising. In 2004, Toronto had 28.2% of financial jobs. Vancouver, with 13.2% of financial jobs in 2014, is its closest competitor. The sector accounts for 13.3% of greater Toronto’s GDP. Only the public services sector is larger.
Internationally, Toronto is the seventh-largest financial centre in the world, and second-largest in North America, says The Banker magazine.
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 financial services sector has been a strong source of growth for the Canadian economy over the past decade,” says Michael Burt, director, Industrial Trends at 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.”
According to the report, 73.6% of financial services firms had undertaken some form of innovation in the previous year, versus 63.5% for all sectors, according to Statistics Canada data.
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.
This story originally appeared on the site of our sister publication Advisor.