Statistics Canada has produced **modeled **estimates of mean liquid assets of economic families and persons not in economic families at the Census Division (CD) level. Two data sets were used to obtain the final estimates: the 2016 Survey of Financial Security (SFS) and the 2016 Census of Population.

Liquid assets are defined as follows:

Liquid assets = deposits in banks + financial investments + 0.9* RRSPs,

where financial investments include: a) stocks, b) bonds, c) mutual funds, and d) tax-free savings accounts. A 10% withholding tax is assumed when withdrawing RRSPs, hence the use of the factor 0.9 pre-multiplying RRSPs.

*Method 1 and Method 2 - Method 1 recommended*

The data include two estimates of mean liquid assets of economic families and persons not in economic families:

- Method 1 built the model using all liquid asset estimates from the Survey of Financial Security.
- Method 2 built the model using all liquid asset estimates from the Survey of Financial Security, except for the top 1% of the distribution of liquid assets.

Statistics Canada recommends using the estimates produced by *Method 1*. The coefficient of variation associated with these estimates was generally lower than with *Method 2*.

A detailed methodology note for these modeled liquid asset estimates is available here.

The model was created using regression analysis of the SFS data and these two variables from the Census of Population:

- mean family size-adjusted income after tax
- percentage of major income earners who are immigrants

Rationale:

a) Higher incomes should accumulate more savings and create greater liquid assets.

b) Immigrants are generally attracted to economically dynamic regions, which are expected to have higher wealth holdings and liquid assets.

Models including the mean age of major income earners or the percentage of major income earners with a bachelor’s degree or higher education generally did not correlate as well as the variables indicated above.

*Synthetic vs Composite vs Outlier estimates*

The Survey of Financial Security (SFS) does not have a sufficient sample size to provide accurate estimates of liquid assets at the CD level. In CDs where at least 10 observations exist, an "inaccurate" estimate was made. The final estimates are a weighted average of this SFS estimate and the model estimate, which is called the *synthetic estimate*. The weighted average is called the *composite estimate*. In cases where there is no SFS estimate, only the synthetic estimate is used. The data table indicates whether the estimate is synthetic or composite.

Some estimates are labelled as *Outlier*. These estimates are, in fact, *composite *estimates. The label indicates that the SFS estimate was excluded from the estimation of the model parameters because they were considered outliers. However, the SFS estimate is still included in the final weighted average of the SFS estimate and the synthetic model estimate.