{"id":3938,"date":"2019-08-29T19:00:00","date_gmt":"2019-08-30T00:00:00","guid":{"rendered":"https:\/\/www.rbcwealthmanagement.com\/en-ca\/insights\/investors-in-canada-are-financially-optimistic-despite-an-uncertain-political-and-economic-environment\/"},"modified":"2023-11-01T10:42:15","modified_gmt":"2023-11-01T14:42:15","slug":"investors-in-canada-are-financially-optimistic-despite-an-uncertain-political-and-economic-environment","status":"publish","type":"post","link":"https:\/\/www.rbcwealthmanagement.com\/en-ca\/insights\/investors-in-canada-are-financially-optimistic-despite-an-uncertain-political-and-economic-environment","title":{"rendered":"Investors in Canada are financially optimistic despite an uncertain political and economic environment"},"content":{"rendered":"
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\t\t\t\t\tWith trade tensions looming, oil markets suffering from volatility and the global economy looking fragile, Canada remains resolutely optimistic. \t\t\t\t<\/p>\n

\t\t\t\t\t\u201cI expect uncertainty, especially around trade, is likely the new normal for Canada, while ample global commodity production is likely to perpetuate volatility in Canada\u2019s commodity markets,\u201d says Rachel Ziemba, founder of political and economic risk analysis firm Ziemba Insights. \u201cThe USMCA [the new NAFTA], aimed to secure Canada\u2019s market access in the U.S. and reduce the risk of new tariffs, probably has a tough road ahead before ratification. Meanwhile, relations with China, seen as a major potential new market, have soured as Canada has been caught in the U.S.-China trade and technology battle.\u201d \t\t\t\t<\/p>\n

\t\t\t\t\tAgainst this backdrop, Canadians, more so than their peers in the U.S. and UK, cite uncertainty in areas such as the global economy and house prices as threats to their ability to create, preserve and manage wealth. Yet Canadians remain largely optimistic about their future financial well-being. \t\t\t\t<\/p>\n

\t\t\t\t\tThese are among the findings of a recent global survey by The Economist Intelligence Unit (EIU), commissioned by RBC Wealth Management. The survey included high-net-worth individuals (HNWIs; those with at least US$1MM (C$1.35MM) in investable assets), adult children of HNWIs and those who are not yet HNWIs but who have a minimum income of US$100,000 (C$134,000).1<\/sup> \t\t\t\t<\/p>\n

Real estate and tax questions loom in Canada<\/h4>\n

\t\t\t\t\tRecently, Canada has faced an unusual level of instability, with economic uncertainty levels in 2018 spiking above those during the 2008 financial crisis, according to an index from the U.S. Federal Reserve Bank of St. Louis.2<\/sup> \t\t\t\t<\/p>\n

\t\t\t\t\tOne area of concern has been real estate, with house prices experiencing huge increases in markets like Greater Vancouver, where prices have surged 58 percent over the past five years, as well as Greater Toronto (which has seen a 56 percent increase), the Barrie area (46 percent) and Greater Montreal (22 percent). \t\t\t\t<\/p>\n

\t\t\t\t\tAnd cracks have emerged recently, with Canada\u2019s average prices slipping into negative territory (-0.34 percent) over the past year, according to The Canadian Real Estate Association.3<\/sup> These housing concerns are most acute for younger Canadians4<\/sup>, with 34 percent citing housing price uncertainty as a threat to wealth, compared with 22 percent of their peers in the U.S. \t\t\t\t<\/p>\n

\t\t\t\t\tCanadians, more so than peers in the UK and Asia, also say tax changes threaten their wealth goals, especially for business owners and entrepreneurs (52 percent cite this as a concern). Fifty-four percent of Canadian survey respondents at the highest wealth levels (US$5MM+ (C$6.44MM+) in investable assets) are also concerned about tax changes, as are more women than men (46 percent versus 40 percent). \t\t\t\t<\/p>\n

FIGURE 1: Northern exposure<\/h5>\n
Which of the following external factors most concern you about your ability to create, preserve or manage your wealth? (Canadian investors, percent choosing each option – top three choices overall)<\/h6>\n

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