Globally, the family office industry has shown considerable signs of growth in the past few decades, including in Canada. Though the family office industry in the Great White North is still at the start of its growth cycle, there are plenty of opportunities for building and expanding the family legacy.
Canada: An attractive location for family offices
Keeping up with similar industry growth in the United States, Canada has become an increasingly popular location for family offices. Here are some of the reasons the region is so attractive.
Canada is a culturally diverse country with an inclusive and welcoming approach towards immigrants. Its immigration policies make it relatively easy for wealthy families to immigrate and establish residency. This makes it an attractive option for family offices seeking to relocate or diversify their assets internationally.
Ease of doing business
According to the World Bank’s annual ratings, Canada ranks 23rd out of 190 economies for ease of doing business. Registering a business online is a fast and user-friendly process, oftentimes taking just a day and a half. Family businesses can apply for licenses and receive approval online. Canada also has a highly skilled workforce, and its prime location – such as its proximity to the US and Europe – makes it an attractive country to consider expanding into.
The country has minimal levels of corruption and a long history of political stability. According to the corruption index, Canada ranks no.14 as the least corrupt nation. Not only is it stable economically, but it also has robust financial markets. The country has one of the safest and most solid fiscal systems. Canada is also well known for its high standard of living, as well as an excellent healthcare and education system. Canada is a safe bet for family offices looking to make long-term investments.
Canada has a booming economy and abundant natural resources, such as oil, gas, minerals, and lumber. That presents investment opportunities for family offices looking to engage in sectors reliant on natural resources. Otherwise, private equity and venture capital are also expanding in the country. The birthplace of the e-commerce unicorn, Shopify, the nation offers investment in a wide range of industries, including renewable energy, healthcare, and technology. In addition, Canada also has a thriving real estate market. Family offices wishing to explore real estate and fast-growing industries may find Canada’s stable private equity and venture capital ecosystem reassuring.
Regulatory Framework and legal structures
Canada operates under a common law legal framework. The Income Tax Act contains the laws and regulations that govern taxation in Canada for all types of legal entities. Provincial and territorial taxation regimes generally follow the federal system but do vary. Family offices do not need to be licensed in Canada, however, there are strict rules under the Proceeds of Crime (Money Laundering), Terrorist Financing Act (PCMLTFA) and Personal Information Protection and Electronic Documents Act (PIPEDA) that firms must abide by. Additionally, they must report to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). Although there is not a specific regulator for the family office industry, professionals that offer family office services must adhere to the regulations of that field or industry.
Canada offers a relatively favourable tax environment for family offices. Though the country does not have specific legislation dedicated solely to family offices, various regulations and laws specific to financial activities and operations apply. For example, family offices in Canada that engage in investment activities are subject to provincial securities regulations. Since tax regulations often shift due to annual budgets, as with any new market, family offices looking to set up shop in Canada should consult with a local tax specialist.
How Canada compares to other regions
Compared to more established markets, such as the United States, Hong Kong and Singapore, the Canadian family office market is still in its infancy. This is likely due to some of the wealthiest Canadian families having not fully transitioned from operating family enterprises to family offices.
How the older generation operates
Wealthy Canadian families traditionally relied on private bankers and trust companies to manage their financial affairs. These institutions provided services such as investment management, tax planning, estate planning, and philanthropy. Even today, it is common to find large family enterprises still operating under holding companies or trusts. For example, the Desmarais family controls the majority stake in Power Corporation of Canada, a massive business in Canada, and manages their wealth under the Desmarais Family Residuary Trust. Similarly, the Rogers family that controls Rogers Communications, one of the biggest media companies in Canada, holds its wealth in the Rogers Control Trust.
The rise of the younger generation
As succession planning unfolds, the newer generations seem more inclined to tech solutions and sophisticated business structures. For example, when Paul Desmarais III took over Sagard from his father in 2016, he turned to alternative investments to diversify. The firm now boasts $14 billion in assets under management. Similarly, in 2016, Jen McCain, the granddaughter of McCain Foods co-founder Wallace McCain, launched Irie Capital, a boutique private equity firm specialising in the pet industry.
Apart from legacy families, the boom in younger high-net-worth individuals in the country is spurring the rise of family offices, presenting a modern version of a classic approach to managing wealth. Many families are establishing single family offices dedicated to providing tailored financial solutions, investment management, and estate planning services to meet their unique needs. And multi-family offices are emerging to serve multiple wealthy families, allowing them to pool resources and share costs while still providing personalised services.
Perspective future for the next generation of wealth owners
The family office industry in Canada has shown considerable growth recently, presenting opportunities for building and expanding family legacies. Canada can claim inclusive immigration policies, ease of doing business, a stable economy, and a favourable tax environment as reasons it has caught the attention of family offices. While still in its infancy compared to other markets, Canadian family offices are evolving with younger generations and the rise of high-net-worth individuals.
The largest family offices in Canada
1. The Woodbridge Company
Woodbridge is a single family office and private investment holding company based in Toronto, Canada. Established in 1978, it is the primary investment vehicle for the Thomson family. One of the most notable holdings of Woodbridge is Thomson Reuters, a global information services and media company. David Thomson is the CEO, and the family has an estimated net worth of $57.8 billion.
2. Wittington Investments Limited
Wittington Investments, Limited is a single family office and private investment holding company based in Toronto, Canada. It is the investment arm of the Weston family, one of Canada’s wealthiest families. Galen G. Weston Jr. is the CEO, and he also sits as the Executive Chairman at Loblaw Companies and George Weston Limited, a multinational conglomerate founded in 1982.
3. The Kilmer Group
The Kilmer Group is a Canadian family office that operates as a private investment and management firm for the Tanenbaum family. It is based in Toronto, Ontario, Canada, and has a history that spans over 75 years. Lawrence M. Tanenbaum, a prominent Canadian businessman, entrepreneur, and philanthropist, created the firm. The Tanenbaum family is involved in various successful business ventures, particularly in real estate, sports and entertainment, and private equity.
4. James Richardson & Sons, Limited
James Richardson & Sons, Limited is a single family office established in 1857 by James Richardson. The company has headquarters in Winnipeg, Manitoba, Canada. It is involved in the international grain trade and agri-food business, energy, real estate, financial services, investments and transportation.
5. Thistledown Capital
Thistledown is a family office with a mandate to fund research and initiatives in the climate tech space, with a specific interest in geoengineering, alternative energies, and material sciences. It was established in late 2019 by Tobias Lütke (founder of Shopify) and his wife Fiona McKean. Its philanthropic arm, The Thistledown Foundation, is run by Fiona.
Thomvest is a single family office founded in 1996 to make investments for Peter J. Thomson and his family. The firm invests in Fintech, Proptech, Cybersecurity, and Cloud Infrastructure. Thus far, the firm has made over 75 deals and has an estimated AUM worth $500 million.
Claridge is a single family office based in Montreal, Canada. It was founded in 1987 by Stephen Bronfman, a prominent Canadian businessman and philanthropist. In 2000, Charles Bronfman and his nephew Edgar Bronfman Jr. sold their family’s spirits and alcohol giant Seagram to Vivendi for $30 billion. The firm represents the Stephen Bronfman family and is actively involved in managing a diverse portfolio of investments in private equity, hedge funds, public equities, and real estate.
8. Reiss Family Office
Reiss is a single family office that manages the wealth of the Reiss family. In 2017, the Reiss family sold their retail brand, Canada Goose, and formed the firm to expand and manage their property portfolio. Darren Reiss leads the company as the Managing Director from its offices in London, UK. The firm invests in real estate and several other asset classes, including property loans, private equity and mainstream financial markets.
9. Werklund Family Office
Werklund Family Office is a Canadian-based multi-family office that provides comprehensive wealth management and financial services to high-net-worth families, individuals, and foundations. David Werklund, a prominent entrepreneur and philanthropist, and his family founded the firm. It has headquarters in Calgary, Alberta, Canada.
10. Northwood Family Office
Northwood Family Office is a multi-family office in Toronto, Ontario, and has operated since 2003. Tom McCullough leads the company as Chairman and CEO. It offers integrated planning, investment management, wealth administration and family engagement for families of wealth.
11. Northland Wealth Management
Northland Wealth is family owned multi-family office founded by Arthur Salzer in 2011. It has headquarters in Oakville, Ontario and Calgary, Alberta. Northland has an estimated $2.5 billion in AUM and serves Canada’s most affluent and successful families in investing, financial, estate planning, family governance and succession planning.
12. Richter Business Family Office
Richter is a private wealth management and multi-family office with offices in Toronto, Montreal, and Chicago. It provides comprehensive financial services to high-net-worth individuals and families. Its services typically include investment management, financial planning, tax planning, estate planning, risk management, and philanthropic planning.