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Industry Size and Composition
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"Ontario’s financial services sector is a world leader and critical part of the province’s economy. The financial services sector employed 365,000 people in Ontario in 2009 – an increase of 60,000 jobs over 2003. In addition, the sector supports an estimated 280,000 ancillary jobs, including in high-paying business service jobs (such as software design)."
2010 Ontario Budget: Sector Highlights
Strengthening Key Sectors of Ontario’s Economy
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Source: 2010 Ontario Budget: Sector Highlights
Toronto’s Financial Sector Fact Sheet
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•Toronto is home to the vast majority of Canada's largest financial services companies:
o 2 of the largest 10 global life insurers, plus a third with significant operations in Toronto
o 3 of the world's 25 largest banks and Canada's 5 largest banks
o The 3rd largest exchange in North America, and 7th largest in the world
o 3 of the top 50 global pension funds
o 4 of the 5 largest investment management firms6 in Canada
o 3 of the 4 largest property and casualty insurers in Canada
o Operations of 7 of the top 10 largest global hedge fund administrators
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• The financial services sector directly employed 220,000 people in the Greater Toronto Area (2008).
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| • Including indirect effects, the sector employed a total of 350,000 people, accounting for over 12% of employment in the GTA (2008). |
• The financial sector contributed 21.1% of the Toronto Region's GDP, including direct and indirect contributions (2008).
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• Financial services companies and their employees accounted for 24% of all corporate fundraising at the Sick Kids Foundation and nearly 40% of all donations to the United Way of Greater Toronto (2008).
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| • From 2003 to 2008 the financial sector jobs in the Toronto Region grew by 4.3% per annum, contributing an incremental $6.2B in GDP. |
Source: City of Toronto, fact sheet on Toronto's financial sector, Retrieved Aug 2010
The Greater Toronto Area is Canada's most diversified financial center with key players in the banking, insurance, securities and asset management sectors.
Major players in the GTA’s financial services sector
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Banks
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Royal Bank of Canada
Bank of Nova Scotia
Canadian Imperial Bank of Commerce
Toronto Dominion Bank
Bank of Montreal
Canada Trustco Mortgage Company
Royal Trust Corporation of Canada
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Credit Agencies
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American Express Canada Inc.
Newcourt Credit Group Inc.
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Security Dealers
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TD Securities Inc.
CIBC Wood Gundy Securities Inc
RBC Dominion Securities Inc.
Nesbitt Burns Inc.
ScotiaMcLeod Inc.
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Insurance
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Manufacturers Life Insurance Co. (The)
Sun Life Assurance Company of Canada
Zurich Canada
Canada Life Assurance Company
Royal & Sun Alliance Insurance Company
State Farm Mutual Automobile Insurance Co
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Source: City of Toronto, A Review of Toronto’s Financial Services Cluster
Domestic Banks
Toronto is headquarters to the 5 largest domestic banks, and the majority of Canadian insurance, securities, foreign banks, and pension and mutual fund companies.
Top 5 Domestic Banks Ranked by Asset Size – Canada 2008
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RBC Financial Group
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TD Bank Financial Group
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Scotiabank
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| BMO Financial Group |
$385.41 billion |
CIBC
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$359.49 billion
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Source: Canadian Bankers Association, 2008
Insurance
Insurance agencies, brokers and carriers represent over 48,000 workers, about one quarter of the Toronto CMA’s financial workforce (Source: Statistics Canada, Census 2006).
Toronto region is headquarters to six of Canada’s top ten life insurers: Sun Life Financial Services, Manulife Financial, Canada Life Financial, The Independent Order of Foresters, Transamerica Life Canada, UnumProvident.
Five of Canada’s top ten property and casualty insurers call the Greater Toronto region home:: ING Canada, Aviva Canada, Kingsway Financial Services, Royal SunAlliance Canada, State Farm Group (Source: National Post Business, “FP500”, June 2003).
Securities
All major securities firms are subsidiaries of the banks.
| TD Securities Inc. |
Toronto
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| Scotia Capital Inc. |
Toronto
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| CIBC World Markets |
Toronto
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| RBC Dominion Securities Ltd. |
Toronto
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| BMO Nesbitt Burns |
Toronto
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| National Bank Financial |
Montreal
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Source: Toronto Economic Development
The key reason for the significant success of this sub-cluster is the presence of the Toronto Stock Exchange (TSX). The Toronto Stock Exchange (TSX) market represents companies from various industries, including mining, oil & gas, life sciences, technology, communications, manufacturing and financial services. In 2009 the TSX had a market capitalization of over 1,600 billion dollars (USD), and is the third largest exchange in North America.TSX mining companies traded 79.1 billion mining shares on the Toronto Stock Exchange and TSX Venture Exchange in 2009. (TSX, 2010)
Foreign Banks
Foreign banks are heavily concentrated in the Greater Toronto Area, which is home to 55 foreign bank subsidiaries/ branches and 119 securities firms. 89% of foreign banks operating in Canada have their head-offices within the Toronto CMA (TFSA, 2010)
Labor Force
The Toronto region (Toronto CMAs) employees a total of 251,875 people in the Finance, Insurance, Real Estate & Leasing sectors. The financial and insurance services sector has employment total of 187,840 and Real Estate and Leasing employees 64,035
(Source: Statistics Canada, 2006 Census)
- Financial firms in the Greater Toronto Area have access to a skilled labor force
Approximately 75% of financial services employees in the Toronto region have post-secondary education at CEGEP, College or University levels
The University of Toronto offers a Mathematical Finance Program producing financial engineers trained to develop new financial products and customized financial products, monitor risk exposure to books of complex derivatives, devise hedging schemes and search for arbitrage opportunities in the markets.
The Capital Markets Institute (CMI), also a University of Toronto initiative, was created by a donation from the Toronto Stock Exchange and is a joint initiative of the Rotman School of Management and the Faculty of Law. The purpose of CMI is, “to be a center for independent and rigorous research and debate on the structure and performance of Canadian capital markets”.
York University offers a Graduate Diploma in Financial Engineering in conjunction with the MBA degree through the Schulich School of Business. York’s National Program in Financial Services and Public Policy has dedicated over $1 million over the next four years to fund applied research into public policy and the financial services sector.
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Business Competitiveness
Greater Toronto Area’s availability of talents is not the only competitive advantage the region has to offer. The GTA is also Canada’s premier center of head office, financial and commercial activity. For more information, go to: Economic Overview/Business Profile.
As one of the largest corporate center in North America, there is a constant need for financial deal-making for any type of debt or equity financing.
GTA based financial companies can also benefit from strategic links to other economic sectors. For instance, the Information and Communications Technology sector provides financial companies with strong support in the development of e-banking and e-commerce solutions. The GTA Information and Communications Technology sector is the third largest in North America after San Francisco and New York. For more information click here.
Operating a financial services firm in the Toronto region is significantly less expensive than in America’s 5 major financial centers, including New York and Chicago.
| Cost Index - Toronto vs Select US and International Cities |
| Toronto |
95.8 |
| Atlanta |
96.3 |
| Miami |
97 |
| Houston |
97.9 |
| Philadelphia |
98.3 |
| Detroit |
98.5 |
| Chicago |
98.8 |
| Paris |
100.1 |
| Los Angeles |
101.4 |
| Berlin |
101.6 |
| London |
101.7 |
| New York City |
102.0 |
Source: KPMG, Competitive Alternatives, 2010.
Find more information on Business Costs in the Greater Toronto Area.
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Innovation
Innovations in technology have enabled financial institutions to offer more products and services in new ways.
All major banks offer electronic/wireless/telephone banking and trading services.
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Bank of Montreal
Cebra Inc is Bank of Montreal’s e-commerce subsidiary offering a broad range of products and services (EPOST, MERX, MERXbidline, TotalTrade, BrokerNet)
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CIBC
Amicus offers wireless carrier and mobile banking through partnerships with Bell, Clearnet, Rogers, RIM, AT&T and Telus
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Royal Bank
Baldhead Systems – wireless systems
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TD Waterhouse
E-services: online access to brokerage statements and trade confirmations
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Scotiabank
Piloting voice recognition telebanking project, “Telescotia” in the 416 area
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National Bank Discount Brokerage
Partnered with Bell Mobility to provide clients with access to Internet brokerage services using digital phones
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Source: City of Toronto, A Review of Toronto’s Financial Services Cluster, 2001.
Canada’s banking groups continue to invest and innovate in technology.
According to the Canadian Bankers Association, in 2003, Canada’s six largest banks collectively spent $3.9 billion on technology - more than double the $1.8 billion in annual technology spending seven years ago (Source: CBA, Technology and Banking, May 2004). In addition to the individual efforts of Canadian financial institutions to adopt technology, a collective effort among a number of Canadian banks resulted in the creation of Symcor Services Inc. located in Toronto.
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