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Concerns of these wealthy Canadians include high taxes, the state of the economy and quality of life You can save this article by registering for free here . Or sign-in if you have an account. More Canadian millionaires are considering moving abroad than four years ago, according to a recent survey from investor migration consultancy Arton Capital.
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Create an account or sign in to continue with your reading experience. Sign In or Create an Account Among Canadians with a net worth of $1 million or more, 28 per cent more than during the last federal election said they are more likely now to leave Canada, the survey of 1,000 people found. These high-net worth Canadians were most likely to list dissatisfaction with quality of life (56 per cent) and the economic outlook (45 per cent) as reasons for making a move.
The survey also found millionaires were more likely to vote for the Liberal Party (46 per cent) over the Conservative Party (39 per cent), however it was those who voted Conservative at the last election who were more likely (34 per cent) to want to leave Canada than those who previously voted Liberal (23 per cent). Get the latest headlines, breaking news and columns. By signing up you consent to receive the above newsletter from Postmedia Network Inc.
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We encountered an issue signing you up. Please try again Interested in more newsletters? Browse here. Carolyn Cole, founder and chief executive officer of the Vancouver-based firm Cole & Associates, said choosing to leave Canada is less of a partisan issue and more of a tax issue.
She has seen an “exponential increase” in the number of wealthy individuals considering leaving Canada as a direct result of proposed changes in tax laws under the Trudeau government of the past nine years, she said. Canada’s ultra-wealthy families — Cole & Associates works with high-net worth Canadians (typically with a net worth of about $100 million or more) who have family offices — are regularly calculating how quickly they might be able to recoup and grow their wealth if they sell their assets and leave for another country, Cole said. But she has seen only “a handful” of families actually leave in recent years.
Even those who leave are unlikely to abandon Canada entirely but are relocating their wealth domicile to another country in order to reduce their tax burden, she said. “They (may) still have familial ties and a love for the country, they (may) still come back and buy businesses in Canada,” she said. “But the tax has become so onerous to Canadian enterprises, businesses and families that it does warrant consideration on how to efficiently move.
” The United States has been a key destination for migrating millionaires for years, but some wealth managers say the current political climate south of the border is causing many wealthy Canadians to take pause. In fact, the Arton Capital survey found political stability was the top factor Canadian millionaires considered while choosing another country to emigrate to, above access to social services and health care and even other considerations such as taxes. Cole said many wealthy Canadians are looking beyond finances and are not currently considering the U.
S. On the other hand, Kris Rossignoli, a New York-based senior private wealth manager at Cardinal Point Wealth Management, said he has worked with many Canadian millionaires moving to the U.S.
and other countries who are motivated by the prospect of lower taxes. While Canadian income tax revenue goes toward supporting key programs and services, such as health care, Rossignoli said many high-net worth Canadians end up paying more in taxes in Canada than they would for quality health care in the U.S.
“It obviously depends on how much you make, but certainly wealthier Canadians are looking at that math and saying, ‘We’re going to be saving tens or hundreds of thousands of dollars a year by moving to the U.S. and we’re going to get significantly better health care.
’” In other cases, Rossignoli has seen wealthy young Canadians move to the U.S. for jobs with higher salaries.
He said clients looking for a more relaxed lifestyle have considered countries with golden visa programs, such as Portugal and Italy. These programs offer residency rights to affluent immigrants in exchange for a minimum investment. Some millionaires surveyed are thinking about the state of the economy as well.
Canada’s productivity performance, which has plunged dramatically since the COVID-19 pandemic, poses significant problems. Toronto-Dominion Bank economists wrote in a report last year that worsening productivity growth may lead to stagnating wages and higher taxes or reduced public services. This is especially concerning for millionaires who own businesses, said Tina Tehranchian, an Etobicoke-based senior wealth adviser and certified financial planner at Assante Capital Management Ltd.
“You need more incentives for hard work and entrepreneurial spirit in this country, and I think that will improve the standard of living and the economy and lift everybody up,” she said. Tehranchian said wealthy entrepreneurs want to see stimulus measures for Canadian businesses, such as reduced taxes, and increased investments in infrastructure to improve living conditions. However, Cole said the economic outlook may pose more of a concern for wealthy Canadians with less than $50 million, but less so for higher-net worth individuals, particularly those who may own operating entities in other parts of the world.
“The economic outlook in Canada is not necessarily their focus because wealth can be created anywhere,” Cole said. Canada is not necessarily set to lose more millionaires than it is gaining. The country’s population of those with net worth of more than US$1 million is expected to balloon to more than 2.
4 million by 2028 (21 per cent growth), according to a September report by Swiss financial services firm UBS Group AG. “Canada is still a very attractive destination for many people from all over the world,” said Tehranchian, adding that Canada’s standard of living and freedom of expression are major incentives for wealthy people entering from other countries. And migrating to another country is not a simple process, Tehranchian said, noting there are complex tax, immigration and legal implications for wealthy Canadians to consider.
“It takes time, and the more complicated your life and your wealth structure, the longer it will take,” she said. Cole said she has observed the process of exploring the decision to exit the country take anywhere between two to eight years. The potential ripple effects of wealthy Canadians who do end up leaving the country is concerning, Cole said.
“The decisions being made by Canadians to exit are often those who are creating the jobs for others in this country,” she said. “My greatest fear is that 25 to 30 years from now is when the true impact will be felt of the very quiet financial exits that are happening from this country.” • Email: slouis@postmedia.
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