Financial and taxation statistics for enterprises, 2023

Data on annual net income before taxes in this release are presented in current dollars.

The Financial and Taxation Statistics for Enterprises (AFTS) survey represents the activities of all corporations in Canada, except government business enterprises. This survey collects data on balance sheets, income statements, and the reconciliation of accounting income and taxable income.

An enterprise can be a single corporation or a family of corporations under common ownership or control, for which consolidated financial statements are produced.

Changes to the Financial and Taxation Statistics for Enterprises

Starting in 2023, the AFTS figures are now based on the North American Industry Classification System 2022 classification structure. Given the new classification structure has marginal impact on the AFTS estimates, the structure of the AFTS data tables did not need to be updated to account for this change. This change should not alter the direct data comparison between 2022 and the previous year.

Starting in 2023, the Canadian insurance companies have implemented the new International Financial Reporting Standards (IFRS) 17 standard on insurance contracts which had an impact on how they have reported their data. The questionnaires for the Quarterly Survey of Financial Statements , the most important data source used in the AFTS for the insurance industries, were adjusted as of the first quarter of 2023 to reflect those changes, which slightly impacted the information published each year in the AFTS tables. Some financial account names were renamed in the tables to reflect the new concepts. Given the difference in the concepts measured, data users should be careful when making direct data comparison between the 2022 and 2023 reference years for those specific accounts used by the insurance sector.

Analytical focus change

Up to reference year 2019, the AFTS survey analysis focused primarily on operating profit and losses to track the financial performance of enterprises. Operating profits are the profits an enterprise earns from its core business operations and are the difference between operating revenues and operating expenses.

As of reference year 2020, the survey's analytical focus has changed from operating profit to net income before taxes. There are several reasons for this change. First, the response rate for the cost of goods sold variable, which is a major determinant of operating profits, has declined over time. Moreover, the accounts used by financial and non-financial industries differed because of the nature of their activities, with some enterprises no longer reporting operating profits in their financial statements.

Second, changes to accounting standards in 2006 (new financial instrument standards) and in 2011 (adoption of the IFRS) included the introduction of gains and losses in asset revaluations. This further complicated the calculation of operating profits.

Lastly, the survey, being an economy-wide program, required concepts with a certain degree of comparability between enterprises and industries for assessing and comparing their financial performance.

Net income before taxes is income earned from an enterprise's normal activities. It is a more inclusive measure, and its calculations are standardized between enterprises and industries.

Revisions and back casting

The release of the AFTS survey for the reference year 2022 includes revised estimates for 2021 and 2020. This release also includes back-cast estimates for the reference periods from 2002 to 2019.

The back-cast estimates are derived from a process of reconciliation to ensure the annual series are consistent with the levels of a set of information from surveyed and administrative sources, and by applying the year-to-year movement of historical AFTS survey estimates.

Changes in data from previously released estimates may be due to a number of reasons, including survey population updates, industry reclassifications and revisions to the data.

While considerable effort is made to ensure high standards throughout the reconciliation process, the resulting estimates are inevitably subject to a certain degree of error. Users are therefore encouraged to use caution when making historical comparisons.