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Financial and taxation statistics for enterprises

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The Daily


Monday, February 11, 2008

Corporate operating profits hit another all-time high in 2006, bolstered by soaring commodity prices, high employment levels and low interest rates.

Corporations earned operating profits of $285.6 billion, 11.5% higher than the previous record of $256.0 billion set in 2005.

The improvement was broadly based — profits in the non-financial industries advanced 9.9% to $204.3 billion and those in the financial industries gained a solid 15.8% to $81.3 billion.

The top contributors to non-financial operating profits were energy-based industries, construction and real estate. Companies engaged in oil and gas extraction and support activities, utilities operators, construction, petroleum and coal product manufacturers and real estate earned combined profits of $75.3 billion and accounted for more than one-third of the non-financial operating profits.

Thriving demand for residential and non-residential space, especially in Western Canada, lifted the value of building permits to new highs. The construction industry, buoyed in part by energy-related infrastructure projects, recorded robust gains with operating profits increasing 36.1% to $11.5 billion. Profits in the real estate industry grew at a more modest rate of 8.6%, reaching $9.1 billion.

Higher metal prices, driven by strong global demand (especially from China), boosted operating profits for primary metal manufacturers to $6.2 billion, up 58.6% over 2005. Mining industry profits increased 28.8% to $4.9 billion.

Robust economic activity also drove profits higher for companies involved in transportation, warehousing and pipeline operations. Transportation, warehousing and pipeline profits combined were up 15.8% to $12.5 billion in 2006.

High employment levels and low interest rates spurred consumer spending, bolstering operating profits for the retail and wholesale industries. Operating profits for retailers rose 13.8% to $18.8 billion while wholesalers posted a gain of 18.0% to $17.4 billion.

Food and beverage stores and clothing, department and other general merchandise stores accounted for close to two-thirds of the retail profits. The operating profits of building material and supplies wholesaler-distributors continued at historic highs, reflecting strength in the construction and home renovation markets.

Low interest rates and high employment levels translated into solid consumer and business spending and profitability for banking, financial services and wealth management enterprises.

Operating profits for the financial industries climbed 15.8% to an all-time high of $81.3 billion, surpassing the previous high set in 2005.

Corporations involved in securities and commodity exchanges and other financial investment activities had an outstanding year. Operating profits increased for the fourth consecutive year, rising 21.6% in 2006 to $20.2 billion.

After retreating 4.9% in 2005, operating profits for the insurance industries surged 21.8% to $14.3 billion in 2006, surpassing the previous peak of $12.3 billion established in 2004. Property and casualty insurance carriers led the way as profits jumped 26.9% to $7.7 billion.

Note: These financial and taxation statistics cover all incorporated businesses within the domestic economy, including government business enterprises, but exclude enterprises classified to "Management of Companies and Enterprises," "Funds and Other Financial Vehicles" and "Public Administration." A project to improve industrial classification resulted in the addition of almost 18,000 enterprises to the estimates. These enterprises were reclassified from "Management of Companies and Enterprises" to the "Securities and Commodity Exchanges" and "Other Financial Investment Activities" industry. This reclassification is reflected in the estimates from 2003 to 2006.

Financial and taxation statistics for enterprises
  2005 2004 to 2005 2006 2005 to 2006
  $ billions % change $ billions % change
All industries        
Operating revenue 2,856.0 6.2 3,015.2 5.6
Operating profit 256.0 14.2 285.6 11.5
Taxable income 144.2 2.8 170.8 18.4
Total tax payable 47.2 2.8 55.0 16.5
Non-financial        
Operating revenue 2,584.9 6.2 2,707.9 4.8
Operating profit 185.8 16.3 204.3 9.9
Taxable income 114.1 4.7 138.2 21.1
Total tax payable 35.5 3.4 42.8 20.7
Financial        
Operating revenue 271.1 7.0 307.3 13.4
Operating profit 70.2 9.1 81.3 15.8
Taxable income 30.2 -3.7 32.6 8.1
Total tax payable 11.7 1.2 12.2 3.7


Available on CANSIM: table 180-0003.

Definitions, data sources and methods: survey number 2510.

The publication Financial and Taxation Statistics for Enterprises, 2006 (61-219-XWE, free), now available from the Publications module of our website, provides a comprehensive statistical portrait of the financial performance of incorporated business enterprises for 67 industrial groupings.

For more information or to order data, contact Client Services (toll-free 1-888-811-6235) or Louise Noel (613-951-2604; louise.noel@statcan.gc.ca), Industrial Organization and Finance Division.

To enquire about the concepts, methods or data quality of this release, contact Danielle Lafontaine-Sorgo (613-951-2634; fax: 613-951-0318; danielle.lafontaine-sorgo@statcan.gc.ca), or Ed Holmes (613-951-0584; fax: 613-951-0318; edward.holmes@statcan.gc.ca), Industrial Organization and Finance Division.