Canadian Occupational Projection System (COPS)

Industrial Summary

Finance, Insurance, Real Estate and Leasing Services

NAICS 5211-5269; 5311-5331

This industry comprises establishments primarily engaged in financial transactions or in facilitating financial transactions (such as banks, insurance carriers and brokerage agencies) and establishments primarily engaged in selling and buying real estate for others or renting and leasing various tangible or intangible assets. Real estate and leasing services are the most important segments in terms of production, accounting for 60% of the industry’s real GDP in 2016, while finance and insurance are the most important segments in terms of employment, accounting for 71% of all workers. More precisely, the industry employed 1.1 million workers in 2016, with 49% in finance and banking, 22% in insurance, 24% in real estate and 5% in leasing. Employment is largely concentrated in Ontario (49%), Quebec (19%) and British Columbia (12%), with women accounting for a slight majority of the workforce (54%). The real estate segment is also characterized by a high proportion of self-employed (43%). Key occupations (4-digit NOC) include:

  • Other financial officers (1114)
  • Real estate agents and salespersons (6232)
  • Customer services representatives - financial institutions (6551)
  • Insurance agents and brokers (6231)
  • Banking, credit and other investment managers (0122)
  • Financial sales representatives (6235)
  • Financial and investment analysts (1112)
  • Accommodation service managers (0632)
  • Insurance adjusters and claims examiners (1312)
  • Property administrators (1224)
  • Banking, insurance and other financial clerks (1434)
  • Insurance, real estate and financial brokerage managers (0121)
  • Financial auditors and accountants (1111)
  • Information systems analysts and consultants (2171)
  • Supervisors, finance and insurance office workers (1212)
  • Securities agents, investment dealers and brokers (1113)
  • Computer programmers and interactive media developers (2174)
  • Insurance underwriters (1313)
  • User support technicians (2282)
  • Computer and information systems managers (0213)
  • Assessors, valuators and appraisers (1314)
  • Data entry clerks (1422)
  • Financial managers (0111)
  • Database analysts and data administrators (2172)
  • Business development officers and marketing researchers and consultants (4163)
  • Computer network technicians (2281)
  • Economists and economic policy researchers and analysts (4162)
  • Software engineers and designers (2173)
  • Collectors (1435)
  • Mathematicians, statisticians and actuaries (2161)

Although firms in the finance and insurance segments participate in international markets, the industry as a whole is heavily reliant on the performance of the domestic economy, given the importance of the real estate segment in terms of output. Overall, the industry is particularly sensitive to consumer spending and business investment, including residential and non-residential investment. Output and employment in the industry increased continuously from 2007 to 2016, even during the recession of 2008-2009, reflecting the fact that banking, insurance and other financial services are often essential services needed by both households and businesses regardless of the fluctuations in economic conditions. The substantial rebound recorded in equity markets following the financial crisis has given a boost to the finance and banking segment, while mortgage rates at all-time lows have stimulated growth in the real estate segment, with buyers purchasing homes at record prices because of low financing costs. The resulting pace of growth in the industry’s real GDP was among the strongest across the economy, averaging 2.8% annually over the period 2007-2016. Employment growth, however, was significantly lower, averaging 0.9% per year. This situation reflects productivity improvements attributable to the growing use of online technologies in financial, banking and real estate services, allowing the industry to increase output with modest growth in employment.

Over the period 2017-2026, output growth in the industry is projected to soften and be more in line with the overall economic activity. This reflects slower growth in final domestic demand, particularly in residential investment and consumer spending, which is expected to restrain demand for real estate services and for mortgage and non-mortgage loans. Indeed, rising mortgage rates, inflated house prices and the gradual decline anticipated in household formation are expected to lower demand for new housing as soon as 2018, leaving renovation spending as the only source of growth in residential investment over the next ten years. Changes to mortgage regulations, such as homebuyer stress testing, and new policy measures, such as the implementation of a foreign buyer’s tax in Vancouver and Toronto to refrain housing speculation, are also expected to affect demand for new mortgages. These developments on the residential side will not only affect real estate and lending services, but also property insurance services. Moreover, rising interest rates, high household debt levels and weaker growth anticipated in disposable income (resulting from the gradual slowdown in overall employment growth in Canada and massive retirements of baby-boomers) are expected to restrain the pace of growth in consumer spending, particularly for the purchases of big-ticket items such as cars and household appliances. On the positive side, renewed growth in business investment related to machinery and equipment and faster growth in non-residential investment (which includes the construction of commercial, industrial and institutional buidings and the construction of heavy and civil engineering structures) may result in higher demand for business lending. The growing middle class in emerging markets also represents growth opportunities for the insurance segment, as many markets remain underserved. Higher demand for privacy and security insurance in response to the rise of cyber attacks in a world of increased digitization is an additional factor expected to stimulate growth in the insurance segment. On average, real GDP in the industry is projected to increase by 2.1% annually over the period 2017-2026, a notable slowdown relative to the previous decade. In comparison, employment growth is projected to remain essentially unchanged, averaging 0.8% per year. Again, most of the growth in output is expected to be fuelled by productivity gains resulting from technological innovations. The increased prevalence of automation and online services in real estate, banking, insurance, and even investment services will continue to improve efficiency in the industry. However, productivity growth may not always come at the expense of employment growth. It is mostly the composition of jobs within the industry that is expected to change over the coming years. For example, the automation of repetitive tasks should reduce demand for less skilled workers such as bank tellers and customer service representatives. Demand for financial advisors could also be impacted, as new digital tools and platforms are automating a growing number of activities traditionally performed by portfolio management firms. In order to leverage the potential from the latest digital technologies, firms in the industry are expected to hire thousands of individuals with specialized skills in information technology (IT), such as software engineers, data scientists and cyber security experts, which could more than compensate for the jobs that may be displaced. Fintech, insurtech and blockchain transactions are among the few technologies that are expected to disrupt finance, banking and insurance services, by opening doors to new IT start-ups and increased competition from firms in the computer services industry, forcing traditional incumbent firms to modify their business models.

Real GDP and Employment Growth Rates in Finance, Insurance, Real Estate and Leasing Services

Figure showing the annual growth of real GDP and employment over the periods 2007-2016 and 2017-2026 for the industry of Finance, Insurance, Real Estate and Leasing Services. The data is shown on the table following this figure

Source: Statistics Canada (historical) and ESDC 2017 COPS industrial scenario (projections).

Text Version of Figure Real GDP and Employment Growth Rates in Finance, Insurance, Real Estate and Leasing Services, 2007-2016 and 2017-2026, in Percent
  Real GDP Employment
2007-2016 2.8 0.9
2017-2026 2.1 0.8

Source: Statistics Canada (historical) and ESDC 2017 COPS industrial scenario (projections).

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