Alberta is going through tough economic times, yet a new survey says households in Calgary and Edmonton are financially the healthiest of Canada’s 35 largest cities.
Both Calgary and Edmonton scored above average for average household income, average household real estate assets and household liquid assets.
A multi-phase research initiative sponsored by the Investment Industry Regulatory Organization of Canada (IIROC), Urban Spotlight: Neighbourhood Financial Health Index findings for Canada’s cities ranks Canada’s largest urban areas (with populations over 100,000) on overall household financial health.
“Urban Spotlight shows that our financial health is heavily influenced by where we live,” said Elizabeth Mulholland, CEO of Prosper Canada. “Assets and debt, not just incomes, matter when it comes to our overall financial health.”
Lucy Becker, IIROC Vice-President of Public Affairs and Member Education Services, said the report “provides important insight into Canadians’ financial health – which is of great value to regulators, policymakers and those working with Canadians to help them make investment decisions.”
Findings are based on the Neighbourhood Financial Health Index (NFHI), a composite measure of household financial health at the neighbourhood level. Combining income, debt, asset and neighbourhood poverty indicators, the NFHI provides a more comprehensive and accurate picture of household financial health than income statistics alone.
The report said five cities could be characterized as “living large” with high income and high wealth but also high debt. Toronto and Vancouver are the most extreme examples, but other high-debt cities include Calgary, Kelowna and Guelph.
Ten cities have total-debt-to-income ratios greater than 150 per cent: Saskatoon, Calgary, Guelph, Victoria, Kelowna, Barrie, Oshawa, Toronto, Abbotsford-Mission and Vancouver.
Nine cities could be characterized as “living challenged,” with below average income, wealth, and debt and higher poverty. Select Quebec cities as well as Halifax, Peterborough, Thunder Bay and Windsor display this profile,” stated the report.
Five cities could be described as “living constrained,” displaying a similar pattern but with lower than average poverty levels. On the list are Moncton, Saint John, Belleville, Brantford and St. Catharines-Niagara.
“Cities with good average income but high debt and low savings might be ok financially for the present but can be characterized as “living on the edge” because they are highly vulnerable to future interest rate increases and economic downturns. These cities include St. John’s, Barrie, Oshawa, Regina and Abbotsford-Mission.”
Mario Toneguzzi is a business reporter in Calgary.
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