Financial Services

Industry Size and Composition

The Greater Toronto Area with a pool of over 200,000 workers ranks third among the top ten financial sectors in North America

                                          Sources: Statistics Canada. U.S. Department of Labor,

                                          Bureau of Labor Statistics

Note: U.S. regions are Primary Metropolitan Statistical Areas (PMSAs) except for Atlanta, Minneapolis-St. Paul and Phoenix, which are Metropolitan Statistical Areas (MSAs). Toronto Census Metropolitan Area employment numbers are used for the Greater Toronto Area

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

          Source: City of Toronto, A Review of Toronto’s Financial Services Cluster, 2000

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 2004

          Source: Canadian Bankers Association, 2004   Note: fiscal year-end 2004

 Insurance

Life, property and casualty and reinsurance – represents 46,810 workers, about one quarter of the Toronto CMA’s financial workforce (Source: Statistics Canada, Labour Force Survey, Industry Profile 2003).

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.

Source: Toronto Economic Development, Cluster Profile, 2003.

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.

TSX mining companies raised $3.1 billion US in 2003 - the largest amount raised compared with any other exchange in the world. Toronto Stock Exchange is also the second largest life sciences market in the world. TSX is home to more than 70 life sciences companies with a total market capitalization of over $23 billion as of March 2004.

In 2002, the total market capitalization of close to 1,300 issuers listed on TSX reached $1 trillion, making it the third largest exchange in North America and the seventh largest in the world. The TSX also operates an exchange for junior stocks called the TSX Venture Exchange.

Foreign Banks

Foreign banks are heavily concentrated in the Greater Toronto Area. The Toronto CMA currently has 35 of the 41 foreign banks’ head offices in Canada and over $71 billion in assets. From the end of 1999 to 2002, Toronto gained three head offices with assets climbing roughly 21 per cent (Source: Toronto Financial Services Alliance, 2003 Competitiveness Survey).

Top 5 Largest International Banks Ranked by Asset Size - Canada 2002

          Source: Canadian Bankers Association, 2002  Note: fiscal year-end 2002

Pension and Mutual Fund Companies

The Toronto region is home to 50% of the largest pension funds in Canada. The largest pension plans are all public retirement plans.

          Source: Canadian Pension Directory, Spring 2003.

90% of Canadian mutual fund head offices are located in the Greater Toronto Area, managing an estimated $360 billion in assets. Major international mutual funds with national head offices in the GTA include AIM Trimark, Fidelity Investments and Franklin Templeton, which together manage 20% of total Canadian mutual fund assets.

          Source: The Investment Funds Institute of Canada

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Labor Force

In 2003, the Toronto region (Toronto CMAs) employed a total of 249,180 people in the Finance, Insurance, Real Estate & Leasing sectors. The financial and insurance services employment total (189,800) is comprised of:

• Credit intermediation and related activities (100,010 employees), - Securities, commodity contracts, and other intermediation and related activities (42,710 employees),
• Insurance carriers and related activities (46,810 employees).

(Source: Statistics Canada, Labour Force Survey, Industry Profile 2003)

• Financial firms in the Greater Toronto Area have access to a skilled labor force

More than 80% of financial services employees in the Toronto region have post-secondary designations: 35.8% have a post-secondary certificate/diploma and 46.6% hold a university degree.

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.

 Toronto Society of Financial Analysts Inc. (TSFA) with over 5,000 members represents the 2nd largest society of financial analysts in the world after New York.

Labor cost

Employment by Sector, 2003
Occupation	Organizations Without Bonus	Organizations With Bonus
Top Financial Executive or CFO	$138.6	$178.2
Director, Finance/Controller	$93.6	$104.5
Treasurer/Treasury Manager	$85.7	$98.9
Budgetary Control/Budget Manager	$72.7	$92.5
Credit and Collection Clerk/Representative - Senior	$42.2	$42.3

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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.

Find more information on Business Costs in the Greater Toronto Area.

Source: KPMG, Competitive Alternatives, 2004.Notes: operations costs include utilities, facility lease and labor costs

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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.

                   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.

In 1996, Symcor began a three-way alliance between the Bank of Montreal, Royal Bank and TD Bank to provide economies of scale in item processing and information delivery.  Symcor is now one of North America’s largest generators of bank, investment dealer and mutual fund customer statements and the continent’s biggest cheque processor

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