Why are Canadian millionaires leaving the country?

More Canadian millionaires are considering moving abroad than four years ago, according to a survey by investor migration consultancy Arton Capital. 

Financial Post said that the survey found that among Canadians with a net worth of $1m or more, 28 percent more than during the last federal election said they are now more likely to leave Canada. 

Survey respondents cited dissatisfaction with the country’s quality of life (56 percent) and concerns about the economic outlook (45 percent) as the most common reasons. 

Millionaires surveyed indicated a preference for the Liberal Party (46 percent) over the Conservative Party (39 percent), but the survey also found that 34 percent of those who previously voted Conservative were more likely to want to leave, compared to 23 percent of Liberal voters. 

Carolyn Cole, founder and chief executive officer of Vancouver-based Cole & Associates, said the decision to leave Canada is less about partisanship and more about taxes.  

She observed an “exponential increase” in wealthy individuals considering relocation following proposed tax law changes under the Trudeau government over the past nine years.  

Cole explained that ultra-wealthy families, typically those with a net worth of about $100m or more, are regularly calculating how quickly they might recoup and grow their wealth if they sell assets and move to another country. 

Although few have left, Cole noted that even those who relocate often maintain ties with Canada.  

“They (may) still have familial ties and a love for the country, they (may) still come back and buy businesses in Canada,” she said.  

However, she emphasized that “the tax has become so onerous to Canadian enterprises, businesses and families that it does warrant consideration on how to efficiently move.” 

The survey highlighted political stability as the top factor millionaires consider when choosing another country, ranking higher than access to social services, health care, and taxes.  

Cole pointed out that many wealthy Canadians are now looking beyond finances and are not currently considering the US as a destination. 

However, Kris Rossignoli, a New York-based senior private wealth manager at Cardinal Point Wealth Management, said he has worked with many Canadian millionaires relocating to the US and other countries in pursuit of lower taxes.  

Rossignoli explained that although Canadian income tax revenue supports key programs such as health care, many high-net worth Canadians end up paying more in taxes than they would spend for quality health care in the US.  

“It obviously depends on how much you make, but certainly wealthier Canadians are looking at that math and saying, ‘We’re going to be saving tens or hundreds of thousands of dollars a year by moving to the US and we’re going to get significantly better health care.’” 

Rossignoli added that some wealthy young Canadians move to the US for higher-paying jobs, while others seek more relaxed lifestyles through golden visa programs in countries like Portugal and Italy, which offer residency rights in exchange for minimum investments. 

Economic conditions also influence the decision to move. Canada’s productivity performance, which declined sharply following the COVID-19 pandemic, raises serious concerns.  

Economists at Toronto-Dominion Bank wrote in a report last year that falling productivity could result in stagnating wages, increased taxes, or reduced public services. 

Tina Tehranchian, a senior wealth adviser and certified financial planner at Assante Capital Management Ltd. in Etobicoke, said this environment particularly worries millionaires who own businesses.  

“You need more incentives for hard work and entrepreneurial spirit in this country, and I think that will improve the standard of living and the economy and lift everybody up,” she said.  

According to Tehranchian, wealthy entrepreneurs would like to see stimulus measures such as tax cuts and increased infrastructure investments to enhance living conditions. 

Cole noted that concerns about Canada’s economic outlook are more prevalent among wealthy Canadians with less than $50m. Those with higher net worths and operating entities abroad are less focused on the domestic economy.  

“The economic outlook in Canada is not necessarily their focus because wealth can be created anywhere,” she said. 

Despite rising concerns, Canada’s millionaire population is projected to grow.  

A September report by UBS Group AG forecasted that the number of Canadians with a net worth over US$1m would increase to more than 2.4 million by 2028, representing 21 percent growth.  

Tehranchian said Canada remains attractive to newcomers because of its standard of living and freedom of expression. 

Relocating, however, involves complex tax, immigration, and legal challenges.  

Tehranchian noted, “It takes time, and the more complicated your life and your wealth structure, the longer it will take.”  

Cole said exploring the decision to exit Canada typically takes between two to eight years. 

The long-term impact of wealthy Canadians leaving the country could be significant.  

“The decisions being made by Canadians to exit are often those who are creating the jobs for others in this country,” Cole said. “My greatest fear is that 25 to 30 years from now is when the true impact will be felt of the very quiet financial exits that are happening from this country.” 

Recent examples illustrate this broader trend. Ann Kaplan Mulholland, a Canadian entrepreneur and reality TV personality, along with her husband Stephen Mulholland, plans to relocate from the UK to Italy following changes to the UK's non-domiciled tax status, according to The Times.  

Despite their significant investments in the UK, including a £26m renovation of Lympne Castle, the couple cited new tax rules imposing double taxation on their global assets as their reason for leaving.