Environics Analytics releases WealthScapes 2016, revealing Canadians’ assets, liabilities, spending power
Toronto--Environics Analytics (EA), the analytical and marketing services company, today announced the release of WealthScapes 2016, the most comprehensive database available on the assets, liabilities and wealth of Canadians. The latest edition consists of 178 key financial and investment statistics, including disposable income, liquid assets, retirement savings, consumer debt and equity holdings.
At a time when marketers face challenges in understanding their customers—thanks in no small part to the sheer quantity of information available today—WealthScapes provides businesses and not-for-profits with immediate insight into the financial and investment behaviour of their customers and prospects. First launched in 2008 as a tool for the financial services industry, the dataset has become popular not just among bankers and financial planners but with retailers, fundraisers, real estate developers and university administrators.
Today WealthScapes plays a vital role in a range of business applications, including target marketing, customer insights, media planning, site location studies and response analysis. Banks and investment companies use the database to calculate wallet share and market potential for specific products like RRSPs, TFSAs, mortgages and GICs. Universities and charities use it to identify high-value donors from contributor lists and target areas that may be home to prospects with sizable investment portfolios. Retailers and real estate developers draw on WealthScapes data to plan commercial and residential developments and attract retail tenants.
This year, EA is also launching two additional databases derived from WealthScapes that are geared to specific applications. WealthScapes Fundraiser features a selection of 41 income, wealth and expenditure variables to assess the charitable giving capacity and inclination of prospective donors. With donation averages and propensities already calculated for each postal code, WealthScapes Fundraiser makes list appending easy for applications like donor and prospect mining. WealthScapes Daytime focuses on 75 variables from the main dataset that help users better understand the consumer spending power and financial behaviour of an area during daytime hours as well as the daytime demand for financial services like ABMs. By using commuter flow and workplace information, WealthScapes Daytime can help users locate households with high net worth but low income—typical of the increasingly large retiree population—and areas near centres of employment to reach busy consumers during the day.
“Every year, we look for new data sources and insights to improve the database,” says Peter Miron, vice president of economic data at Environics Analytics and the lead developer of WealthScapes 2016. “The result is a complete picture of Canadians’ financial well-being. WealthScapes allows us to see areas where disposable income is rising or where households have taken on too much debt. It’s become an authoritative dataset for marketers and analysts in all industries.”
Among the noteworthy findings coming out of the WealthScapes 2016 release:
1. Realignment of Wealthiest Cities: For years, the three Canadian cities with the highest net worth were Vancouver, Calgary and Toronto. No longer. While Vancouver continues to reign as the city with the highest net worth ($1,036,202), Calgary’s net worth of $898,240 represents a 2.5 percent decrease over the previous year—the largest decline among Canada’s 20 largest cities—and resulted in its two-rung drop from second to fourth place. Meanwhile, Toronto moved up one rung to the second wealthiest city, with net worth up 5.4 percent to $962,993. Victoria joins the big three with its net worth at $912,362, up 3.4 percent over the previous year. Calgary’s tumble largely can be attributed to a 4.7 percent decline in real estate values somewhat allayed by a low 0.4 percent growth in household debt.
2. Pricey Real Estate Creates Millionaire City: With real estate values that rose 11.9 percent to $786,784—both figures the highest among Canada’s twenty largest cities—Vancouver is the first city to claim an average household net worth of over $1 million. Its 7.1 percent growth in net worth—to $1,036,202—was second only to a southern Ontario newcomer among Canada’s wealthiest markets: Oshawa. But relying on real estate to fuel net worth growth in Vancouver may need to be reconsidered. “While we expect real estate in Vancouver to continue to rise overall in 2016,” says Miron, “the introduction of the recent land transfer tax on foreign nationals may dampen demand for real estate in the future.”
3. Wealth Grows Fastest in Oshawa: The WealthScapes analysis shows that Oshawa households posted the greatest percentage gains in wealth last year, with net worth increasing 9.2 percent to $714,040. The local economy benefitted from a weak loonie and low interest rates, which provided a boon to the area’s manufacturing industry. Oshawa’s real estate holdings grew by 10.5 percent—more than double the 4.6 percent national average—to $507,116, and pensions grew by an above-average 6.2 percent, to $208,416.
4. Rich Getting Richer, Mostly: The three wealthiest provinces in 2015 were the same as they’ve been for years: British Columbia, Ontario and Alberta. The net worth of top-ranked B.C. grew 6.3 percent to $883,049, second-place Ontario (formerly ranked third) rose 5.2 percent to $793,338 and third-place Alberta (formerly in second) declined 0.7 percent to $763,812. The drivers behind these changing fortunes differ, however. B.C. remains the wealthiest in large part because of its sizzling real estate market, up 9.5 percent to $628,915 and whose growth is largely centred in Vancouver. Ontario’s net worth growth was evenly spread among pensions, liquid assets and above-average real estate growth (up 4.4 percent, 3.4 percent and 6.5 percent, respectively). Albertans’ net worth declined largely due to a 2.1 percent drop in real estate values and a below-average growth of 1.0 percent in liquid assets.
5. Quebec’s Very Good Year: Despite a relatively quiet real estate market, up only 1.4 percent, the province of Quebec still recorded an above-average net worth growth of 5.0 percent to $478,766. Its rising fortunes were driven mostly by an increase in pensions, up 7.5 percent to $134,507, and the fastest-growing liquid asset portfolios in Canada: an increase of 6.1 percent to $185,533. In addition, Quebec’s households saved an eye-popping $15,144 on average in 2015, with liquid assets swelling by 6.1 percent to $185,533. At the same time, household debt increased only 0.8 percent to $92,258, the lowest rate of growth in the country.
6. Pumped-Up Pensions: With most attention in recent years focused on the real estate market, savings rates and stock market performance, it’s easy to miss Canadians’ most valuable asset: their increasing longevity. The fastest-growing asset has been Canadians’ employer-sponsored pension plans, up 5.7 percent nationally to $140,204. Pension plans, predominantly the fixed-benefit type, have swelled as long-term interest rates continue to decline and life expectancies continue to rise—a win-win for the 53.9 percent of households maintaining one or more pensions. Pension values grew the most in Manitoba and the Atlantic provinces, up 8.4 percent and 8.3 percent, respectively.
What’s Next: Although several oil-based provinces are still experiencing economic headwinds, WealthScapes data indicate little evidence of a recession. All the provinces except Alberta reported growth in net worth—ranging from 1.1 percent in Saskatchewan to 6.3 percent in British Columbia—and wealth in Alberta declined less than 1 percent. Of the twenty largest cities, only Calgary, Saskatoon and Regina experienced a decline in net worth, down 2.5 percent, 1.6 percent and 0.4 percent, respectively. “We’re in a period of low growth, but growth nonetheless,” says Miron. “Overall, Canada is on course to continue modest but steady growth, with few obvious indicators of volatility on the horizon.”
WealthScapes 2016 was built using sophisticated modelling techniques and aggregated, privacy-compliant, small-area data. Updated to December 2015, the latest version was produced by drawing on more than 30 resources, including the Bank of Canada, Equifax and Statistics Canada. Along with methodological and data improvements to current and historical datasets, WealthScapes 2016 was updated to produce the best possible estimates and temporal comparisons. And though WealthScapes 2016 was created at the dissemination area level, users can append data down to the six-digit postal code. The data can be used on its own for marketing and fundraising applications, or aggregated to develop precise estimates for such applications as analyzing bank holdings and retail trade areas.
One of North America’s premier marketing and analytical services companies, Environics Analytics helps customers turn data and analytics into insight, strategy and results. Established in 2003, EA offers the full range of analytical services—from data supplier to strategic consultancy—and provides authoritative reports, software and modelling approaches to solve business challenges. EA is also a member of the Environics group, a unique alliance of companies dedicated to providing intelligent research, analytics and communications.