Wealth in Canada rebounds, now 8th in world, report says

flovestock

Michael Babad
Globe and Mail Update
Published Thursday, Oct. 20, 2011 7:40AM EDT
Last updated Thursday, Oct. 20, 2011 9:01AM EDT

Wealth in Canada has rebounded from the erosion of the recession, and, according to a report from Credit Suisse, we're now sitting relatively pretty.

"While wealth per adult in the United States is still 8 per cent below the 2007 level, Canada's wealth in domestic currency is now 3 per cent above the 2007 figure," the global wealth report says.

"This reflects the fact that Canada's financial institutions and housing market did not suffer a collapse during the global financial crisis."

According to the report released yesterday, Canada is eighth in the world in a ranking of aggregate household wealth, and 13th in terms of wealth per adult, at $245,000 (U.S.), compared to $248,000 in the United States. That's a sharp reversal from 2000, when Canadian mean wealth was just 56 per cent of the U.S. figure when expressed in U.S. dollar terms.

"Measured in terms of the U.S. dollar, mean household wealth grew at an annual rate of 7.7 per cent from 2000 to mid-2011," says the report by Professor Jim Davies of the University of Western Ontario, Anthony Shorrocks, former director of the World Institute for Development Economics Research of the United Nations University, and Rodrigo Lluberas, a PhD candidate in economics at the University of London.

"When exchange rate changes are excluded, the rise in wealth is more modest, showing annual growth of 3.6 per cent. Also, the contraction in household wealth due to the financial crisis - almost 30 per cent in U.S. dollar terms - is much less evident when wealth is expressed in Canadian dollars."

Like Americans, Canadians hold more than half of their wealth in financial assets, Credit Suisse says, and we have almost one million millionaires. The Canadian section of the report does not discuss the issue of the high personal debt levels in Canada.