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Monday, June 5, 2006

Foreign affiliate trade statistics

2004 Previous release

Sales of goods and services and employment by foreign affiliates of Canadian businesses rose in 2004, due largely to growth in the manufacturing and retail trade sectors in the United States.

Total sales increased by $39 billion to $372 billion, up 12% from 2003 and the first increase in sales in three years.

The manufacturing (+$22 billion), mining and oil and gas extraction (+$8 billion) and retail trade (+$4 billion) sectors were largely responsible for higher sales.

This increase in sales was due mainly to the strength of consumer spending and price increases in the United States, which more than offset the negative impact of the rise in the Canadian dollar.

Consumer expenditures as well as consumer prices and producer prices in the United States — particularly in the manufacturing and raw materials sectors such as metal products, oil and natural gas — significantly increased in 2004.

Canadian-owned foreign affiliates employed an additional 73,000 persons in 2004, bringing employment to 942,000, an increase of 8% over the previous year. The manufacturing (+34,000) and retail trade (+32,000) sectors contributed to the rise in employment.

This increase in employment was due mainly to the acquisition of new foreign affiliates.

Indeed, the number of foreign affiliates in operation rose by 2%. On average, each affiliate generated $99 million in sales and had 250 employees in 2004, a significant increase compared to averages of $91 million in sales and 236 employees the previous year.

Sales rose twice as much among foreign affiliate goods-producers than service-providers. In contrast, the rise in employment was twice as strong for service-providers than for goods-producers.

Sales by service-providers rose 7% to $122 billion. The strongest growth was recorded in the retail trade and management of companies and enterprises sectors. Among foreign affiliates that produced goods, sales climbed to $250 billion, up 14% from 2003. The sharpest increases occurred in the utilities and construction, mining and oil and gas extraction, and manufacturing sectors.

Service-providers employed 345,000 people in 2004, up 12% from a year earlier and the strongest growth recorded since 1999, the first year that estimates were released. This growth was driven mainly by the retail trade sector where the number of jobs quadrupled as a result of major acquisitions south of the border. For their part, foreign affiliate goods-producers had 597,000 employees, an increase of 6%. This increase occurred almost exclusively in the manufacturing sector.

Higher sales and employment in the manufacturing sector resulted from strength in food manufacturing, primary metal manufacturing, printing, paper manufacturing and the manufacturing of metal products.

The share of sales by foreign affiliates in the United States remained stable at 59%. Sales in countries in the "Other countries" category caught up to sales in the European Union following growth of 21%. These two regions accounted for about one-fifth of total sales in 2004.

The share of employment held by foreign affiliates in the United States grew only slightly to 56%. The share of employment held by countries in the European Union and in the "Other countries" category fell moderately to account for slightly more than one-fifth of employment.

Note: To be consistent with the international practice for measuring foreign affiliate trade statistics, only the data for majority-owned foreign affiliates are included. For operational reasons, depository institutions and foreign branches of firms were excluded from the estimates. Sales and employment figures of non-bank majority-owned foreign affiliates represent 100% of the sales and employment, even if the Canadian ownership is less than 100%.

Foreign affiliate operations
  2000 2001 2002 2003 2004
  Sales ($ billions)
Goods-producers 227 221 219 220 250
Service-producers 140 143 135 114 122
Total 367 365 355 333 372
United States 237 224 218 197 219
European Union 67 75 73 73 77
Other countries 62 66 64 63 77
Total 367 365 355 333 372
  Employment (thousands)
Goods-producers 566 540 562 562 597
Service-producers 322 346 336 307 345
Total 888 886 898 869 942
United States 553 524 507 473 527
European Union 157 175 186 184 199
Other countries 178 187 205 212 216
Total 888 886 898 869 942

Available on CANSIM: tables 376-0060, 376-0061.

Definitions, data sources and methods: survey number 1529.

Additional analysis of these foreign affiliate trade statistics data will be available soon in the publication Canada's International Trade in Services (67-203-XIE, free).

For additional information, contact Client Services (613-951-1855; To enquire about the concepts, methods or data quality of this release, contact François Lavoie (613-951-5416;, Balance of Payments Division.

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Date Modified: 2006-06-05 Important Notices