Quarterly financial statistics for enterprises
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Operating profits for Canadian corporations were up 9.0% to $71.4 billion in the fourth quarter from the previous quarter. This marks the highest level of profits since the economic downturn in late 2008. However, it was $6.1 billion below the peak in the third quarter 2008.
In the fourth quarter, 15 of 22 industries reported higher profits.
Quarterly operating profits
Chart description: Quarterly operating profits
In the non-financial sector, operating profits in the fourth quarter increased 5.3% to $53.5 billion, following a 3.2% gain in the previous quarter. Much of this growth came from the manufacturing industry.
Note to readers
Quarterly financial statistics are compiled using financial information provided by enterprises that derive this data from their financial statements. Starting on January 1, 2011, Canadian publicly accountable enterprises are required to replace Canadian Generally Accepted Accounting Principles (CGAAP) with International Financial Reporting Standards (IFRS) when preparing their financial statements for fiscal years starting on or after January 1, 2011. Canadian private enterprises are required to replace CGAAP by Accounting Standards for Private Enterprises or IFRS. The adoption of new accounting standards by some enterprises since the beginning of 2011 may affect comparability with prior periods.
Quarterly profit numbers referred to in this release are seasonally adjusted and are in current dollars. The quarterly financial data for the first three quarters of 2011 have been revised.
Quarterly financial statistics for enterprises are based upon a sample survey and represent the activities of all corporations in Canada, except those that are government controlled or not-for-profit. An enterprise can be a single corporation or a family of corporations under common ownership or control, for which consolidated financial statements are produced.
Profits referred to in this analysis are operating profits earned from normal business activities. For non-financial industries, operating profits exclude interest and dividend revenue and capital gains/losses whereas, for financial industries, these are included, along with interest paid on deposits.
Operating profits differ from net profits, which represent the after-tax profits earned by corporations.
In the financial sector, operating profits increased 21.8% to $17.9 billion, following a 10.9% decline in the third quarter. Most of the fourth-quarter growth came from the insurance industry.
On a year-over-year basis, operating profits for Canadian corporations were 13.6% higher in the fourth quarter of 2011 than in the same quarter of 2010. Profits increased 13.0% in the non-financial sector and 15.6% in the financial sector.
Quarterly change in operating profits
Chart description: Quarterly change in operating profits
Non-financial sector
Profits in manufacturing industries led the growth in the non-financial sector in the fourth quarter, increasing 19.9% to $14.2 billion.
Profits for manufacturers of motor vehicles and parts (+169%) more than doubled to $1.7 billion. Petroleum and coal products manufacturers reported a 25.8% increase in profits to $3.4 billion.
Profits for chemicals, plastics and rubber products manufacturers increased 20.1% to $2.5 billion, while profits for fabricated metal product and machinery manufacturers increased 42.7% to $1.2 billion.
Profits for the information and cultural industry increased 17.4% to $4.6 billion, with telecommunications accounting for most of this growth.
Wholesalers' profits increased 6.4% to $6.1 billion, while retailers' profits declined 3.6% to $3.7 billion.
Profits for the oil and gas industry were relatively stable, rising 1.9% to $4.4 billion.
Financial sector
The fourth-quarter increase in profits in the financial sector follows two consecutive quarters of decline.
Most of the fourth-quarter growth came from the insurance industry, where profits increased by $2.3 billion to just over $1.9 billion. This reversed a $325-million loss recorded in the third quarter. The fourth-quarter increase was led by life insurers, who again experienced volatility in actuarial liabilities adjustments.
Depository and non-depository credit intermediaries also contributed to growth in the financial sector. Profits for depository credit intermediaries, mainly chartered banks, rose 4.5% to $9.4 billion, the fourth consecutive quarterly increase. Profits for non-depository credit intermediaries rose 18.0% to $2.5 billion.
Available without charge in CANSIM: tables 187-0001 and 187-0002.
Definitions, data sources and methods: survey number 2501.
Aggregate balance sheet and income statement data for Canadian corporations are now available through CANSIM. They are available at the national level for 22 industry groupings.
The fourth quarter 2011 issue of the Quarterly Financial Statistics for Enterprises (61-008-X, free) will soon be available.
Financial statistics for enterprises for the first quarter of 2012 will be released on May 24.
To order data or for more information, contact Client Services (toll-free 1-888-811-6235; iofd-clientservicesunit@statcan.gc.ca). To enquire about the concepts, methods, or data quality of this release, contact Khalid Berrahou (613-951-1989; khalid.berrahou@statcan.gc.ca) or Philippe Marceau (613-951-4390; philippe.marceau@statcan.gc.ca), Industrial Organization and Finance Division.
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