Mutual Funds: An increasingly important contributor to the Quebec economy

June 3, 2015

Assets under management by Quebec’s mutual and exchange-traded funds industry have grown substantially over the last decade despite the 2008–09 financial crisis, with average annual growth of 9.3 per cent. This growth is due primarily due to the aging of the population, regulatory changes, and a widespread shift from defined benefit pension funds to defined contribution pension funds, according to a new report by the Institut du Québec (IdQ) titled Québec's Mutual Fund Industry: Assessing the Economic Footprint.



Montreal is a major global financial centre. From 2009 to 2013, the number of jobs in Quebec’s funds industry went from 5,747 to 9,129, a 59 per cent increase. “In addition to the direct jobs it creates, we estimate that Montreal’s funds industry is responsible for an almost equal number of indirect and induced jobs, primarily in legal and accounting, for a total of over 18,000 jobs supported by this industry,” said Pedro Antunes, Executive Director, Economic Outlook and Analysis, at The Conference Board of Canada.

The manufacturing sector is restructuring in Québec and in many developed economies, while the services industries—such as finance, insurance, and real estate—are helping to fill the void.

While the indirect and induced effects of the funds sector are bigger in Ontario than in Quebec due to the concentration of financial institution head offices in Ontario, the effects are still significant for Quebec. In 2013, through direct, indirect, and induced effects, the Quebec funds industry generated $1.4 billion in personal incomes, and industry firms generated $235 million in profits. In addition to contributing to federal coffers, the industry generated $435 million in tax revenues for the Quebec government.

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