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The Daily. Wednesday, December 20, 2000

Financial and taxation statistics for enterprises

Total operating revenues of Canadian enterprises increased a modest 2.1% in 1998 from 1997, much slower than the average annual growth rate of 7.6% during the previous five years, according to data in Financial and taxation statistics for enterprises.

This slower growth marks the first sign of a flattening revenue curve for these enterprises, which reported total operating revenues of just over $1.7 trillion in 1998. This slower increase has been attributed to the Asian economic crisis in 1998, which created a wave of business pessimism. Nevertheless, just over two-thirds of the 62 industrial groupings reported increases in revenue.

Financial and taxation statistics for enterprises provides a comprehensive statistical portrait of the financial performance of business enterprises between 1994 and 1998. It analyses 62 industrial groupings on the basis of factors such as total operating revenues, operating profits and return on capital employed. There are also data on corporate income taxes paid to federal, provincial and territorial governments.

Total operating profits reported for 1998 were $131.7 billion, down 3.2% from 1997. This was the first year since 1992 that annual operating profits declined from the previous year. Operating profits in the non-financial sector fell 2.0% to $98.8 billion, while those in the financial sector declined 6.5% to $32.9 billion. Industries with the largest operating profits included the chartered banks, electricity, petroleum and natural gas, and motor vehicles, parts and accessories.

Return on capital employed increased from 6.2% in 1994 to 6.7% in 1997, then eased back to 6.5% in 1998. The slightly lower return in 1998 was mainly the result of a decline in operating profits.

Corporate income taxes paid to federal, provincial and territorial governments fell 6.7% to $26.4 billion in 1998 from a revised $28.3 billion in 1997. This decrease reflected the temporary economic slowdown in 1998. Increased corporate income tax expenses by the non-financial sector were more than offset by lower expenses by the financial sector. Five industries - petroleum and natural gas, motor vehicles, parts and accessories, chartered banks, telecommunication carriers and chemical products - booked almost $8.6 billion, or slightly over one-third of total corporate income tax expenses for all industries in 1998.

About 69% of Canadian enterprises were small, with annual operating revenue less than $5 million, while about 7% were large, with operating revenue exceeding $75 million per year. The large enterprises, however, generated about 61% of total operating revenues and almost 76.4% of the total operating profits for all enterprises in 1998.

Note: Data exclude the investment and holding companies industry, to eliminate possible double counting of data. The chartered banks industry includes other deposit-accepting intermediaries not elsewhere specified. A 10-year time series of the key performance indicators (such as operating revenue, operating profits and return on capital employed) of 63 industrial groupings will be included in this publication. Data by more detailed industrial classification, about 153 industrial groupings, are also available.

Starting with the reference year 1999, significant changes will be implemented to the financial and taxation statistics program, which will affect the comparability and the historical continuity of the financial statistics. Data will be collected and compiled on the new North American Industrial Classification basis to provide for greater international comparability of economic data. Data will differ markedly from the Standard Industrial Classification for Companies and Enterprises now in use. Changes will also be made to certain methodological aspects of the program. They will be explained in detail in the publication.

Key performance data of Canadian enterprises

Available on CANSIM: matrices 4100-4167.

Financial and taxation statistics for enterprises (61-219-XPB, $57) will be available soon. See How to order products.

For more information on financial performance data, contact Promise Sanipe (613-951-0274; fax: 613-951-0318; promise.sanipe@statcan.gc.ca). For more information, or to enquire about the concepts, methods or data quality of this release, contact Paula Helmer (613-951-9852; fax: 613-951-0318; helmpau@statcan.gc.ca), Industrial Organization and Finance Division.