Financial services sector helps drive economy

Toronto’s financial services sector made up 13.8% of the city’s economy in 2011, finds a new Conference Board of Canada report.

The financial sector is second only to manufacturing, adds the report, and provides 7.5% of all jobs across the city. That’s a higher percentage than in London, England (7.4%) and New York (6.4%).

“Toronto’s stature as a global financial centre is similar to cities such as Frankfurt, Sydney, and Zurich,” says said Michael Burt, director of Industrial Economic Trends.

He cautions, however, that the “policy-makers and institutions that make up the Toronto financial services sector shouldn’t become complacent. Cities such as Dubai, Shanghai, Sao Paolo and Mumbai are aggressively developing their financial sectors.”

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The sector helps boost employment since it employed 229,380 people directly in Toronto in 2012, says Statistics Canada. These positions ranged from tellers and agents in local offices, to head-office employees for multinational firms.

The study adds the sector also supported an additional 191,210 jobs indirectly in areas such as professional and administrative services—almost half of those positions elsewhere in Canada.

Read: Canadian banks need reforms to stay strong

Also, the financial sector is also growing faster than other parts of the Toronto economy. Since 2002, financial services jobs increased by an average of 2.2% per year, compared to 1.5% growth in employment for the Toronto economy as a whole. In terms of tax revenues, the study shows the sector generated approximately $13 billion for the federal ($6.8 billion), provincial ($5.9 billion), and municipal ($250 million) governments.

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Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.