Newcomers grabbing at Canada’s brass ring: Canada Project findings

Some of the interesting points regarding newcomers:

One of the key findings from a Canada Project poll is that 44 per cent of immigrants have access to over $10,000 in savings. That far exceeds the 27 per cent of multi-generationals who say they do—and that didn’t surprise the two women. “The anxiety and instability is always there for immigrants,” says Maramba. “So, having access to a chunk of funds that’s easy to access is a priority for us. It’s a ‘protection-from-instability fund’, a ‘just-in-case fund’ if we have to go home on short notice to see mom and dad, or help the family in other ways back home.”

Another key finding from the poll, a partnership led by Maclean’s and includes MoneySense, came when it asked the question: ‘For most transactions, how do you prefer to pay?’ In this case, 67 per cent of those who identified as immigrant respondents replied ‘credit’ whereas only 55 per cent of first generation Canadians did. “This can be explained by the immigrant’s desire to build a strong credit history,” notes Yap. “It’s almost as if we need to catch up with the local-born Canadians who have had their credit cards from the start.”

Many immigrants come from countries where the banking system is quite different from Canada’s. The importance placed on property ownership, both as a hold of value and as a status symbol, is amplified by Asian immigrants who are more likely to own their own home and have property investments—a key reason why as many as 81 per cent of immigrant poll respondents say they feel happily middle class.

Bernice Cheung, a Vice President of Cultural markets and Financial Services at Environics Research in Canada notes another reason for the financial success of immigrants. “Established immigrants, meaning those who have been here 11 years or more—often fare better than native born Canadians,” says Cheung.

“I’d say it’s likely because education and the strong work ethic are strongly valued, and better incomes often come with better educations and hard work.” Cheung, who conducts the 2017 Financial Services Among New Canadians Study, also mentions the Tiger Mom phenomenon, defined as a very strict, very disciplined, high-expectations family upbringing. “Especially for those coming from Asian countries, the desire to achieve is very highly placed,” she says.

…Certified financial planner Heather Franklin has seen the same disciplined approach to getting ahead amongst her own immigrant clients. “It’s important to them to do well, whereas for Canadians born here, it’s more about keeping up appearances and ‘keeping up with the Jones.’ Immigrants value hard work, a home and security—not all the bells and whistles.”

These days, immigrants have a lot of help getting them started in building wealth and financial success in their new country and most Canadian banks have newcomer packages. “Set up a chequing account in the first few weeks of your arrival,” advises Cheung to immigrant newcomers. “After all, before you can apply for a credit card, mortgage or personal loan, and before you can start building up your Canadian credit history, you need an account.” Often these newcomer banking packages mean they won’t charge monthly account fees for the first six-to-12 months and they’ll give immigrants discounts on other financial products like safety deposit boxes or auto insurance.

….As well, Newcomers should consider attending seminars hosted by banks on taxation, credit cards, Tax-Free Savings Accounts (TFSAs), Registered Retirement Savings Plans (RRSPs) as well as other tax deferring vehicles. “It’s also helpful to have a financial advisor set up a financial plan, starting with learning to use a TFSA,” says Cheung. Maramba agrees, adding that she found it beneficial to visit a fee-for-service financial advisor who gave good financial advice and didn’t simply take her money for selling her investments.

The Canada Project

In the bigger economic picture, Canadians should be very happy with social policy issues that see Canada welcoming about 300,000 immigrants a year. “Without immigration there is no growth,” says Cheung. “Without immigrants, Canadians will become a rapidly aging country, and the economy will decline. A healthy immigration policy is key to a healthy economy and more prosperity for everyone.”

Source: Newcomers grabbing at Canada’s brass ring – Macleans.ca

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About Andrew
Andrew blogs and tweets public policy issues, particularly the relationship between the political and bureaucratic levels, citizenship and multiculturalism. His latest book, Policy Arrogance or Innocent Bias, recounts his experience as a senior public servant in this area.

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