Canada’s ‘ultra rich’ keep wealth under wraps

Just days before a crush of headlines focused on Canada's austerity budget and fears about whether tiny island Cyprus would trigger a broader European crisis, there was some news about a tiny subset of Canadians that are clearly living it up in otherwise shaky economic times.

They're probably not stressing too much about the fact that the Canadian economy is expected to grow an anemic 1.6 per cent this year, potentially constraining other crucial factors of the country's economic ecosystem. Unlike many Canadians, they're also not likely saddled with record-high debt.

But now, Canada's Finance Minister Jim Flaherty has signaled it wants to shine light on the country's wealthiest. Last week, Ottawa announced measures to close some tax loopholes and target hidden offshore money as a way to raise revenues and slay the country's deficit. How it all plays out still remains to be seen.

Canada is home to the world’s eighth-largest population of “ultra-rich," according to a recent National Post newspaper report based on findings from Wealth-X.

That includes people with US$30-million or more in total assets including 40 billionaires with total wealth of US$105 billion, the newspaper says, noting a big chunk of Canada's ultra high net worth individuals live in Ontario, followed by Quebec, Alberta and British Columbia.

(Just for kicks, compare that to the U.S. where 480 billionaires have total wealth of US$2.05-trillion. That's trillion.)

“We have way more wealth than we ever had in Canada,” Susan Latremoille, director of wealth management and wealth advisor at Richardson GMP’s The Latremoille Group, told the newspaper. “There’s this growing affluence, and we’re seeing a demand for our services as people become more successful," she says.

Canada's wealthy fly under radar

Latremoille says some of Canada’s wealthy are dealing with money made generations ago, while others are successful entrepreneurs. Some flaunt their wealth, but most prefer to be much less obvious and spend their money on experiences rather than things, she said.

To gain a bit of insight in how super-rich people spend, the article notes they like to give to charitable causes, buy pricey art and engage in philanthropy, among other things.

But Canadians are stereotypically understated about their richness. Alan Middleton, professor of marketing at York University’s Schulich School of Business, says Canada's richest like to invest in their kids when it comes to prestigious schools and live it up when on vacation, but most won't like be living in fancy hotels like other spendthrifts.

“Nobody in this category would move into the Trump Tower,” he told the newspaper. “It won’t happen. It’s too obvious, too ostentatious. They would be in a house in Rosedale or way off the Bridle Path, so people won’t come and see it. You see the same phenomenon up the Hudson River. But you won’t see it in California in the wealth areas because they’re the overt luxury spenders.”

According to the newspaper, the Toronto Real Estate Board cited 658 detached homes and 28 condos priced at $2-million or more were sold last year.