One of every 13 jobs in the Toronto area is in financial services, and the sector accounted for 13.8 per cent of Toronto’s economy in 2011 —second only to manufacturing—according a Conference Board of Canada report released today.
Sector supports more than 420,000 direct and indirect jobs
Ottawa, November 20, 2013 – One of every 13 jobs in the Toronto area is in financial services, and the sector accounted for 13.8 per cent of Toronto’s economy in 2011 —second only to manufacturing—according a Conference Board of Canada report released today.
The concentration of financial services employment (7.5 per cent of all Toronto jobs) is higher than world financial capitals London (7.4 per cent) and New York (6.4 per cent). Employment in the financial services sector was fifth-highest in the metro area in 2012.
The sector generates a high level of economic output because it pays above-average wages and salaries, has a high degree of ongoing investment, and is highly profitable.
Financial services are also a key player in Canada’s international investment -- the sector accounts for half of the country’s total stock of outward foreign direct investment. Exports account for one-quarter of financial sector revenues, well above the average for all service sectors. And Canada is a large net exporter of financial services capital, consistently ranking among the top four countries globally in terms of outward foreign direct investment.
- Toronto's financial services sector employed almost 230,000 people in 2012, and indirectly supported another 191,000 jobs.
- Financial services employment in Toronto has risen by 25 per cent since 2002.
- The financial services sector accounts for half of the country’s total stock of outward foreign direct investment.
"Toronto's stature as a global financial centre is similar to cities such as Frankfurt, Sydney, and Zurich. Toronto's highly-ranked status is founded on its core strengths, which include its diversity and its scale," said Michael Burt, Director, Industrial Economic Trends.
"Nevertheless, policy-makers and the institutions that make up the Toronto financial services sector should not become complacent. Cities such as Dubai, Shanghai, Sao Paolo and Mumbai are aggressively developing their financial sectors. Understanding -- and leveraging --Toronto's strengths of diversity and scale are the keys to meeting this challenge from new competitors."
The financial services sector employed 229,380 people directly in Toronto in 2012, according to Statistics Canada. These positions ranged from tellers and agents in local offices to head-office employees for multinational firms.
In addition, the Conference Board's analysis found that Toronto’s financial services sector also generated supply-chain or indirect effects, supporting an additional 191,210 jobs indirectly in areas such as professional and administrative services—almost half of those positions elsewhere in Canada. Thus, the sector sustained a total of 420,590 jobs in 2012.
The 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 cent per year, compared to 1.5 per cent growth in employment for the Toronto economy as a whole.
In terms of tax revenues, the Conference Board estimates that Toronto's financial services sector generated a combined $13 billion for the federal ($6.8 billion), provincial ($5.9 billion), and municipal ($250 million) governments.
The report, Ensuring the Future: Understanding the Importance of Toronto’s Financial Services Sector, was funded by the Toronto Financial Services Alliance. Seven industries are included in the financial services sector: banking, credit unions, insurance, asset management, securities, exchanges, and back-office operations.