Activities of multinational enterprises in Canada and abroad, 2019
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Released: 2022-02-03
Multinational enterprises contribute significantly to the Canadian economy in various domains. Within the Canadian corporate sector in 2019, foreign and Canadian multinational enterprises (MNEs) were responsible for nearly one-third of gross domestic product (GDP) growth, for more than half of the employment increase, and for almost all of the growth in international trade in goods and services.
Outside Canada, Canadian firms demonstrated their integration with global value chains as they continued to expand their activities in foreign markets. Sales by their affiliates operating abroad grew faster than sales from their domestic operations.
Data on multinational enterprises in Canada, as well as on Canadian multinational enterprises abroad, are now available for 2019. These data provide an overview of their activities prior to the onset of the COVID-19 pandemic, which caused disruptions in global value chains.
More detailed information on operating revenues, assets and employment, by country, can be found in the product "Activities of Multinational Enterprises: Interactive Tool". It also includes provincial data on number of jobs, GDP and international merchandise trade, by type of multinational enterprise.
Sales by affiliates of Canadian multinationals abroad grow at a faster pace than those of domestic operations
Data on the operations of Canadian multinationals in foreign economies illustrate the extent to which, over the years, Canadian firms have expanded their activities and accessed broader markets through their majority-owned affiliates abroad.
Canadian multinationals generated $2.1 trillion in sales worldwide in 2019. Sales by Canadian affiliates of MNEs abroad, led by the finance and insurance sector, increased more than sales by their domestic operations during the year. Because of this, operations of Canadian MNEs abroad accounted for 42.6% of total sales, a share that has increased since 2011 (35.2%).
Chart 1
Share of sales by Canadian multinationals, by region of operations, 2011 to 2019
Multinational enterprises account for the lion's share of Canada's international trade
Disruptions caused by the pandemic have highlighted the importance of global value chains, in which foreign and Canadian MNEs play a critical role. In the year before the pandemic (2019), MNEs accounted for over 80% of Canada's international trade in goods and services ($1.3 trillion).
The presence of foreign multinationals in Canada's trade activity is particularly important. Half of all foreign MNEs traded goods internationally during 2019, compared with a quarter of all Canadian MNEs and less than 3% of all other enterprises.
In 2019, foreign MNEs' total merchandise export value reached $326.8 billion, accounting for over 60% of Canada's merchandise exports. By comparison, exports by Canadian multinationals represented just under 25% of total merchandise exports.
Chart 2
International trade in goods and services, by type of multinational, 2010 to 2019
Growth of commercial services exports by multinationals outpaces that of merchandise exports
A type of trade that has been growing in importance is the export of commercial services. While the total value of Canada's merchandise exports grew by nearly 50% from 2010 to 2019, the value of commercial services exports rose at a faster pace (+85.1%).
Almost all of the growth in Canada's commercial services exports was tied to multinational enterprises, as exports of their services more than doubled over the 10-year period. By comparison, the value attributed to all other enterprises rose 13.3% over the same period.
Chart 3
Value of commercial services exports and merchandise exports by multinational enterprises, 2010 to 2019
Contribution of multinationals to GDP varies from one province to another
Compared with international trade, the impact of multinationals on Canada's corporate GDP is less prominent, but still outsized, given that approximately 1% of corporate enterprises are MNEs. Combined, Canadian and foreign multinationals contributed to a slightly higher share of GDP (52.3%) in 2019, compared with non-multinationals (47.7%).
Across Canada, the Atlantic region recorded the highest share of corporate GDP from foreign multinationals (28.5%), while Canadian MNEs showed much higher contribution in Alberta (37.4%) in 2019. In Ontario, foreign MNEs and Canadian MNEs generated similar shares of the province's GDP.
Chart 4
Share of gross domestic product, by type of multinational and by province or region, establishment basis, 2019
Note to readers
This release integrates analysis from both the Activities of Multinational Enterprises in Canada and Activities of Canadian Multinational Enterprises Abroad programs under the broad framework of multinational enterprises.
Activities of multinational enterprises in Canada cover foreign multinationals (firms in Canada controlled by a foreign parent) and Canadian multinationals (Canadian-controlled firms with a foreign affiliate).
Activities of Canadian multinational enterprises abroad cover affiliates abroad that are Canadian majority-owned. The figures represent the total sales, employment and assets of those affiliates. These affiliates also include those who are ultimately controlled by foreign enterprises. As such, a slight share of worldwide activities of Canadian multinationals can be ultimately controlled from abroad, a common practice at the international level.
"Activities of Multinational Enterprises: Interactive Tool" has been developed to allow users to quickly, easily and efficiently browse these data.
Gross fixed capital formation data for 2019 are not available at the time of this release. They will be made available at a later date.
Canadian majority-owned affiliates abroad, affiliates abroad and affiliates of Canadian multinationals abroad are used interchangeably.
The primary statistical unit used in the provincial-level analysis is the establishment level. All other variables are presented at the enterprise level.
Products
The updated Canada and the World Statistics Hub (13-609-X) is available online. This product illustrates the nature and extent of Canada's economic and financial relationship with the world using interactive graphs and tables. This product provides easy access to information on trade, investment, employment and travel between Canada and a number of countries, including the United States, the United Kingdom, Mexico, China and Japan.
The Methodological Guide: Canadian System of Macroeconomic Accounts (13-607-X) is available.
The User Guide: Canadian System of Macroeconomic Accounts (13-606-G) is also available. This publication will be updated to maintain its relevance.
Contact information
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