A new report from the Investment Funds Institute of Canada (IFIC) and the Conference Board of Canada shows the investment industry – those selling exchange traded funds (ETFs) and mutual funds – added $48.1-billion to Canada’s GDP in 2023, accounting for 2.1 per cent of the country’s total GDP. Directly and indirectly the industry supported 415,320 full-time jobs (2.5 per cent of all full-time jobs in Canada) and contributed $21.7-billion in taxes.
“The investment funds industry's GDP grew by an extraordinary 82 per cent between 2012 and 2023, compared with 23 per cent for the Canadian economy overall. In addition, the industry achieved large productivity gains over the past decade driven by technology and innovation. This is during a period when there has been an overall flattening of productivity across all industries,” they stated in an announcement about the research release. “Today, over half of Canadians own mutual funds and one-quarter own ETFs. Together, mutual funds and ETFs have grown to represent a third of all privately held financial wealth.”
Do-it-yourself investors
According to the report, Funding the Future: The Economic Impact of Canada’s Investment Funds Industry, the average management expense ratio (MER) for long-term funds declined from 2.06 per cent in 2013 to 1.47 per cent in 2023, a 29 per cent drop. Despite this, the share of investors with financial advisors fell from 69 per cent in 2020 to 61 per cent in 2024. According to the report, 45 per cent of investors now report having a do-it-yourself investment account.
The report also looks at the role of investment funds over time, as the proportion of workers covered by registered pension plans declined. “Personal savings are becoming more vital for Canadians’ financial future,” they write.
As for employment, they add that over the past decade, wages in the investment funds industry increased by 46 per cent, compared to 35 per cent across all industries. The industry in 2023 reportedly generated $11.6-billion in labour income. “Given that the industry (directly) supports 121,259 full-time, full-year jobs, this equates to almost $96,000 in annual labour income per full-time worker.”
