One-fifth of immigrants to Canada arrive with no savings: BMO
Immigrants come to Canada with an average of $47,000 saved up to start their new life, then spend more than half of it getting settled, a new survey shows.
About one-fifth of immigrants arrive without any savings, looking to build some wealth in Canada.
The report from BMO Wealth Management paints a picture of eager new Canadians looking for a safe, stable country in which to live, although some may be unprepared for the higher cost of living in some parts of the country.
Immigrants came to Alberta with less money than other provinces, or an average of $28,784, and were left with just $9,800 after the move, according to the survey. It includes responses from people who moved to Canada in the past decade.
In Quebec, immigrants arrive with an average of $36,527 and were left with $7,388 after getting settled. It appears cheaper to get started in Ontario, where an average of $27,579 was left from an average of $51,847 in savings brought to Canada.
Immigrants were prepared for the high cost of living in B.C., bringing with them an average of $86,270, and having $35,500 leftover after getting settled in their new home country.
Sabrina Della Fazia, a vice president at BMO InvestorLine, believes the savings rates of immigrants to Canada are at a good level, in part because they are leaving room to spend and invest in other areas.
The survey shows more than half of immigrants that come to Canada set aside their extra money for retirement, their kids’ education or to buy big-ticket items such as a car or downpayment on a house.
Still, among those surveyed, 19 per cent of people surveyed had no savings at all, which appears risky.
Della Fazia says that number does seem high, but that in her experience often includes people with families already established in Canada.
However, she said some people are forced to leave their country in a hurry, and may not have built up savings ahead of time.
She says moving to Canada can be tough for a lot of immigrants, regardless of the reason, and that financial institutions need to play a role in helping make the transition. That includes educating newcomers about smart ways to save and spend their money.
“Often they have nobody to help them and need some guidance,” she says.
Banks are continuously introducing new services that cater to the growing number of immigrants coming to Canada.
BMO cites data showing Canada has the highest proportion of foreign-born residents compared to other G8 countries.
Among respondents to its study, 46 per cent of immigrants said they came to Canada to be safe, 38 per cent were looking for a better job and 36 per cent wanted to better their education. About a third also cited access to better government programs as a reason to move to Canada.
Twenty-two per cent came with an older relative, and 37 per cent came with at least one child, the survey shows. Two-thirds of respondents said their standard of living has improved since coming to Canada.