Canada’s reputation as a place where immigrants are welcomed and thrive is borne out by a new study; but their wealth profile indicates some potential risk.
Statistics Canada’s study looks at the wealth of immigrant families using Surveys of Financial Security from 1999 to 2016.
It found that the wealth of both immigrant families and Canadian-born families grew substantially during these years:
- For immigrant families where the major income earner was aged 45-64 and landed in Canada at least 20 years earlier, average wealth grew by $435,000, rising from $625,000 in 1999 to $1.06 million in 2016;
- For similar Canadian-born families, average wealth grew by $460,000, rising from $519,000 in 1999 to $979,000 in 2016.
- Younger families from both groups also saw substantial wealth growth.
While wealth growth was mainly from housing equity and the value of Registered Pension Plan, immigrant families were more reliant on housing equity which accounted for 69% of average wealth for this group compared to 39% for Canadian-born families.
By contrast, Canadian-born families derived a greater share of their increased wealth from the rise in value of RPP assets (33%) than immigrant families (17%).
This suggests that immigrant family wealth is likely to be more at risk from housing market corrections.
While the study found that immigrant families had higher debt-to-income ratios than Canadian-born families of similar age, it also found many similarities in how both groups manage their finances.
Statistics Canada says the study shows no evidence that immigrant families are different from Canadian-born families of the same age in respect of using payday loans, withdrawing money from their RRSPs, or paying off only part of credit card balances.
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