Supporting a Strong and Growing Economy: Positioning Canada's Financial Sector for the Future

A Consultation Document for the Review of the Federal Financial Sector Framework

Figure 1
Financial Sector Assets
per cent of GDP
Country 2012
Turkey 123.48
Slovak Republic 137.15
Poland 145.27
Estonia 169.97
Czech Republic 175.75
Hungary 187.02
Slovenia 214.65
Chile 226.04
Norway 298.61
Greece 312.25
Israel 317.07
Italy 375.69
Korea 392.99
Finland 430.16
Austria 442.91
Germany 454.46
Belgium 458.47
Sweden 464.76
United States 466.58
Portugal 483.24
Spain 488.54
Canada 533.78
France 598.23
Iceland 630.43
Japan 652.53
Denmark 744.84
Switzerland 779.72
Netherlands 1,190.20
United Kingdom 1,280.70
Ireland 2,066.76
Luxembourg 14,624.06
Source: Department of Finance Canada calculations, based on Organization for Economic Co-operation and Development (OECD) data; 2012 or most recent year

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Figure 2
Concentration in Canadian Banking: Big Six Bank Assets
per cent of assets of all banks
Year Total assets Domestic currency assets
2000 93 91
2001 93 91
2002 92 91
2003 92 89
2004 91 88
2005 91 88
2006 91 87
2007 90 87
2008 91 87
2009 91 87
2010 91 88
2011 92 88
2012 93 90
2013 93 89
2014 93 89
2015 93 88
Source: Department of Finance Canada calculations; Office of the Superintendent of Financial Institutions

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Figure 3
Return on Equity: Canadian Banks
per cent
By group 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Big 6 15 10 16 19 15 23 21 10 12 16 18 20 18 17 16
Mid-sized domestic 14 8 12 9 10 11 14 13 12 14 13 13 11 12 13
S&P TSX 60   6 12 14 14 20 19 16 8 12 13 11 6 11 4
International peers 15 17 19 17 17 19 15 3 7 7 8 7 8 9 9
Source: Department of Finance Canada calculations; Bloomberg
“Mid-sized Domestic” includes Canadian Western Bank and Laurentian Bank
“Int'l Peers” includes, in the US: Bank of America, BB&T, Fifth Third Bank, First Horizon National Bank, JP Morgan Chase, PNC and Wells Fargo; in the UK: Barclays, Lloyd's and Royal Bank of Scotland; and in Australia: Australia and New Zealand Banking Group, Commonwealth Bank of Australia, National Australia Bank and Westpac

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Figure 4
Big Three Life Insurers: Composition of Earnings
per cent
Wealth Management Insurance
39 61
Sources: Department of Finance Canada calculations; financial statements of the three large life insurers (Q1 2016)
Note: Net earnings attributable to “corporate” and “other” segments are excluded

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Figure 5
Property and Casualty Insurance: Market Share
per cent
Company 2014
Intact 15
Aviva  8
Desjardins  8
TD Insurance 6
RSA  6
Others 57
Sources: Insurance Bureau of Canada; 2014 direct premiums written, consolidated groups

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Figure 6
Foreign Ownership in the Finance and Insurance Industry, Canada
Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Per cent of assets under foreign control 17 16 16 16 15 15 16 16 16 14 13 13 13 12 12
Source: Statistics Canada

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Figure 7
Deposits by Institution
(as at December, 2015)
Institutions Institution Type $ billion
RBC Big 6 banks 359
TD Big 6 banks 300
Scotia Big 6 banks 272
CIBC Big 6 banks 233
BMO Big 6 banks 205
Desjardins Provincially regulated entities 146
National Bank Big 6 banks 90
HSBC Federally regulated mid-sized deposit-taking 57
Alberta Treasury ‌Branches Provincially regulated entities 29
Laurentian Federally regulated mid-sized deposit-taking 26
Canadian Western Bank Federally regulated mid-sized deposit-taking 19
Manulife Bank Federally regulated mid-sized deposit-taking 18
Vancity Provincially regulated entities 16
Home Trust Company Federally regulated mid-sized deposit-taking 16
Servus Credit Union Provincially regulated entities 13
Coast Capital Savings Provincially regulated entities 11
Source: Office of the Superintendent of Financial Institutions; company financial returns; Canadian dollar deposits, year-end 2015

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Figure 8
Household Debt and Interest Rates
Year Yield on five-year Government of Canada bonds (RHS)
yield (per cent)
Household debt to disposable income (LHS)
per cent of disposable income
1990   88
1991 8 89
1992 7 91
1993 6 91
1994 9 95
1995 7 96
1996 5 98
1997 5 102
1998 5 105
1999 6 107
2000 5 107
2001 5 109
2002 4 113
2003 4 118
2004 4 124
2005 4 132
2006 4 137
2007 4 145
2008 2 150
2009 3 159
2010 2 161
2011 1 162
2012 1 163
2013 2 163
2014 1 165
2015 1 168
2016 1 167
Source: Statistics Canada; Bloomberg

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Figure 9
Canadian Life Insurer Assets
$ billions
Year 2009 2010 2011 2012 2013 2014
Domestic assets 497 534 552 596 622 689
Foreign assets 514 526 604 606 657 728
Source: Canadian Life and Health Insurance Association

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Figure 10
Geographic Composition of Canadian Bank Foreign Exposures
$ billions, USD
Foreign Claims 2015 2015
(%)
2010 2010
(%)
US 839.3 65.3 527.5 58.9
Europe 206.4 16.1 193.8 21.7
Latin America and Caribbean 51.3 4 40.8 4.6
Asia 82.3 6.4 29.5 3.3
Other 106 8.2 100 11.7
Total 1,285.3 100 896.3 100
Source: Bank for International Settlements

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Figure 11
Canadian International Trade and Investment in Financial Services
$ billions
Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Outward financial services FDI (stock) 159.7 148.1 123.8 129.1 155.8 168.9 234.2 231.7 236.4 264.6 279.1 297.6 320.9
Financial Services Exports (flow) 4.1 4.1 4.1 5.0 5.9 6.6 6.5 6.6 7.6 9.2 9.3 9.8 10.3
Inward financial services FDI (stock) 44.6 51.0 53.2 56.0 60.8 69.9 73.8 82.6 78.1 79.3 84.6 87.4 90.5
Financial Services Imports (flow) 6.4 6.4 6.4 6.8 7.9 8.5 8.4 9.1 10.5 9.9 9.7 10.4 11.1
Source: Statistics Canada
* Foreign Direct Investment

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Figure 12
Insured Catastrophic Losses in Canada
$ billion
Year Insured losses Trend (calculated)
1983 0.038 44
1984 0.039 49
1985 0.100 55
1986 0.045 61
1987 0.218 68
1988 0.109 76
1989 0.014 85
1990 0.016 94
1991 0.419 105
1992 0.101 117
1993 0.224 131
1994 0.077 146
1995 0.205 163
1996 0.664 182
1997 0.074 203
1998 1.707 226
1999 0.215 252
2000 0.216 281
2001 0.204 314
2002 0.302 350
2003 0.427 390
2004 0.332 435
2005 1.042 486
2006 0.158 542
2007 0.156 604
2008 0.446 674
2009 1.033 752
2010 1.235 838
2011 2.044 935
2012 1.461 1043
2013 3.540 1163
2014 1.013 1298
2015 0.608 1448
Source: Insurance Bureau of Canada

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