Canada ranks in the top five of countries with the highest number of ultra-wealthy individuals. There are more ultra-high net worth (UNHW) people in Canada than there are in France, Hong Kong, and Switzerland. And they keep getting richer.
Wealth-X, based out of New York, recently released a report examining the world’s UHNW individuals who are worth more than US$30 million. In 2017, there were 10,840 UHNW people in Canada—an increase of 13.9 percent from the previous year. Their combined wealth? US$1.153 trillion. This is a 14.8 percent increase from 2016.
The countries with more UHNW individuals than Canada are the United States, Germany, China, and Japan.
Researchers believe Canada’s “robust” population of UHNW individuals is due to a good economy, higher market yields, and a stronger currency. The absence of an inheritance tax may also play a role.
“One of our recent studies and research conducted by French economist Thomas Piketty and colleagues have demonstrated that inheritance tax is a key mechanism for wealth distribution,” Ricardo Tranjan, senior researcher at the Canadian Centre for Policy Alternatives (CCPA), told the CBC. “Canada doesn’t have such a tax, whereas most European countries do.”
Worldwide, the ultra-wealthy are making gains. In 2017, the 256,000 UHNW individuals held $31.5 trillion in assets, a significant jump from 2016 and a six-year high.
While the uber-wealthy in Canada saw their wealth increase by 14.8 percent, the average Canadian’s wealth increased just 2.5 percent from the first quarter of 2017 to the first quarter of 2018, reports the Huffington Post.
“[Our] research found that while the average net worth of Canada’s wealthiest families rose by 37 percent between 2012 and 2016, the net worth of middle-class families increased by 16 percent,” said Tranjan.
Several factors are allowing the rich to get richer, according to Wealth-X, including stable exchange rates against the U.S. dollar and less volatility in global financial markets. Wealth-X believes by 2022 there will be 360,390 UHNW individuals on the planet—nearly 105,000 more than 2017.
The Asia-Pacific region is expected to experience the most accelerated growth over the next five years, while North America is predicted to have the slowest growth.
“It will remain the dominant ultra-wealthy region in absolute terms, but compound annual growth rates of just below six percent in its ultra-wealthy population and total net worth imply a gradual decline in global share on both counts,” researchers said.