Sound the alarm: Canada's super rich may be an endangered species, bucking the trend that saw the ranks of the world's wealthiest reach a record high in 2013, according to a new report.
Defined as those with US$30 million in net assets, Canada's population of ultra rich declined from 5,015 in 2012 to 4,980 in 2013, the inaugural Wealth-X and UBS World Ultra Wealth Report 2013 shows. However, that mountain of assets these ultra-rich Canucks are sitting on remained unchanged at $595 billion.
Overall, North American growth of the "ultra-high net worth" population was strong -- up 7.9 per cent, representing more than $9.68 trillion in wealth -- mostly due to a resurgence of wealth south of the border.
The amount of super rich in the U.S. spiked by 8.7 per cent to 65,505, the survey shows. Globally, the world's ultra rich hit a record high of 199,235 individuals with a combined fortune of almost $28 trillion, representing a 6 per cent increase in population size over the year.
But Canada's not alone in its shrinking wealth population. Both China and Brazil saw a contraction in their UHNW ranks, largely due to macro-economic factors like stagnant growth. But Asian countries will dominate in the future, as it is anticipated the continent will produce more millionaires and billionaires than both North America and Europe in the next five years.
“Asia, in terms of the ultra-high net worth population, will catch up with Europe by 2017, which is not that far away,” David Freidman, president of Wealth-X, told Yahoo Canada Finance.
Lack of women among Canada's super rich
Why have Canada's super rich failed to grow? The problem may lie in a lack of diversity and a concentration of wealth among a few key families.
The survey reveals Canada has "one of the lowest proportions of female net worth in the world, over four times lower than the U.S.” Canada had 250 UHNW women with a combined wealth of $18 billion, representing a mere 3 per cent of this population's wealth.
“If you look at the source of wealth in Canada, and you think about oil and gas, the drivers behind that wealth tend to be more concentrated rather than democratized," said Friedman.
The report paints a similar picture to Statistics Canada's National Household Survey, which shows Canada's 1 per cent is made up of nearly 80 per cent men; most of them married and middle aged.
“If you think about the major growth areas in Canada, it’s commodities driven. To generalize, many of these businesses are built, grown and run by males. It’s stereotypical," says Friedman.
Another issue complicating Canada’s wealth picture could be a lack of support, capital, and opportunities for Canada's female entrepreneurs. The majority of the global top-tier class are entrepreneurial success stories with more than 65 per cent of the global UHNW crowd identifying as self made.
"In the U.S., the entrepreneurial environment -- the way the infrastructure has been created around venture capital and entrepreneurs -- it's a much more robust platform that is gender neutral for women starting and growing their businesses historically," Freidman says.
But before you shed a tear for Canada's latest endangered species, remember: the rich will always get richer and the divide between ‘us’ and ‘them’ will continue to grow.