Measuring wealth

March 20, 2013

In fall 2012, some 20,000 households across Canada were asked to open their doors to Statistics Canada interviewers, and share details of their financial lives―assets, debts, income, and pensions―as part of the Survey of Financial Security.

Talking money to a stranger might make anyone feel a bit uncomfortable, even if your finances are well under control. Yet, many interviewers noted that this survey seemed to strike a positive chord among the people they interviewed. “Because the survey is financial in nature, you might have expected more hesitation. But respondents really seemed to care and thought that this was necessary information,” John Nicoletta, manager of the survey team, says. “They seemed to recognize a real need for wealth statistics.” 

Indeed, the media seems full of stories about burgeoning household debt, young people struggling to get a foothold in the workforce, and people near retirement worrying whether their numbers will add up. A financial survey is an important source of information to better understand Canada’s changing demographics, especially in the midst of a rapidly aging population. From 1971 to 2011, the proportion of seniors in the population grew from 8% to 14%. By 2031, when all baby boomers will have reached age 65, it is projected that seniors could make up 23% to 25% of the population.

The Survey of Financial Security provides the most comprehensive statistical portrait of the net worth of Canadians; that is, the amount of money they would have if they liquidated their assets and paid off all their debts. The new information will shed light on how wealth is distributed, the extent to which it is concentrated, the forms in which it is held, and how these features are changing over time in the context of an aging population and an evolving economy.

Strictly confidential

Like all information provided to Statistics Canada, the data gathered over those 45-minute face-to-face interviews are confidential. The data have been compiled into an anonymous database that represents a rich source of information for governments that set policy, journalists who write about finances, and researchers and academics of all stripes. Microdata files—compiled aggregate level data—will also be available at Research Data Centres across Canada.

Survey results are planned for release toward the end of 2013, so it is too early to provide any data or trends. However, the survey attained almost a 70% response rate, which is excellent, given its nature.

The survey format used in 2012 follows similar wealth surveys conducted in 1999 and 2005. The 1999 survey involved 24,000 households, slightly more than in 2012, whereas the 2005 survey involved 9,000 households. Some elements, including provincial data, were not available for 2005. 

Table 1 Assets and debts held by family units, total amounts

“One of our main objectives was comparability with 1999 and 2005,” Nicoletta says. “That means that we can build a time series and look at different sub-groups of the population or cohorts over time.”  

Between now and the release date, Nicoletta’s team is processing the data using a standardized processing tool for social data that is part of a general Statistics Canada move to use common tools and processes for all stages of the data life cycle.

Designing, consulting, and testing of the survey started in April 2011. Some questions were eliminated or were simplified from the earlier surveys to lighten the burden on respondents. Easing respondent burden is a high priority in the halls of Statistics Canada. If you want busy people to respond, you must respect their time.


One difference in 2012, from earlier surveys, is the addition of the Tax Free Savings Account (TFSA) to the mix of savings vehicles available to Canadians. The survey will provide a picture of the uptake on this account, which started in 2009, and of the continuation of other savings vehicles like RESPs and RRSPs.

While similar wealth surveys are done internationally, Statistics Canada has a slightly different take on some measures. For instance, most countries do not count pensions as assets. Statistics Canada has a formula that puts a valuation on pensions. In a November interview, Chief Statistician Wayne Smith said that Statistics Canada’s approach leads to a very comprehensive picture. “It leads to a more robust and richer story. By including assets like pensions and TFSAs, we not only capture more of an individual’s real assets, but gain unique insights into what are the key cornerstones of wealth.” 

So why undertake this particular survey now? With today’s equity market conditions, growing personal debt, housing market concerns, and uncertain global outlook, insights into the evolution of our personal wealth take on a critical importance. Statistics Canada recognized an emerging gap in data on the wealth of Canadians, and chose to dedicate the resources required to conduct the 2012 Survey of Financial Security.

Money may not buy happiness, but knowing how people finance their good and bad times, and what that means to their overall wealth, makes for better decision-making by everyone. 

Next month: Framework for Environment Statistics

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User comments

How were respondents chosen?

First and most importantly, respondents are not chosen for the Survey of Financial Security. It is the address that is chosen.

Residential addresses are randomly selected for participation in this survey. Interviewers then visit the address and interview a household member(s) by asking a set of questions. Members can respond individually or one household member can answer on behalf of the others. It is possible that one address can contain more than one household.

If you would like to know more about the sample selection process, there is detailed information accessed through the link in the Blog posting.

What is the formula that Statistics Canada uses to put a valuation on pensions?

The formula is very detailed and complex. If you click on the link “pensions” in the blog, you will find a series of research papers. The paper – 2001003 – Survey of Financial Security – Methodology for Estimating the Value of Employer Pension Plan Benefits provides a detailed description of the formula and methodology behind the entire valuation process.