Quarterly financial statistics for enterprises, fourth quarter 2014
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Canadian corporations earned $89.4 billion in operating profits in the fourth quarter, down 2.8% from the previous quarter. This decrease followed a 5.2% increase in the third quarter. Overall, operating profits increased in 13 of 22 industries.
In the non-financial sector, operating profits fell 0.2% to $67.5 billion in the fourth quarter, following a 1.9% increase the previous quarter.
In the financial sector, operating profits fell 9.8% to $21.9 billion following a 15.9% gain in the third quarter. Overall, four out of five financial industries declined, with activities related to credit intermediation reporting the lone increase.
On a year-over-year basis, operating profits for all Canadian corporations were up 8.5% compared with the fourth quarter of 2013. Profits rose 12.4% in the non-financial sector, while they fell 2.2% in the financial sector.
Oil and gas extraction profits fell 16.7% to $4.3 billion in the fourth quarter. This marked the third successive quarter of decline. Profits were down 30.0% from the first quarter of 2014. The price of crude oil fell throughout the last half of 2014, negatively affecting operating revenues (down 3.3% to $43.8 billion).
Operating profits in manufacturing decreased 4.2% to $15.2 billion in the fourth quarter, with 8 of 13 industries reporting lower profits. Profits for the motor vehicle and parts manufacturing industry were the hardest hit, falling 35.5% to just under $1 billion. While operating revenues rose for the third consecutive quarter, operating expenses grew at a more rapid pace than revenues, leading to the operating profit decline.
Profits in the petroleum and coal products manufacturing industry fell 8.8% to $4.2 billion. The price for crude oil—the main input for this industry—began falling in the third quarter and the rate of decline accelerated in the fourth quarter. The average price for crude oil fell between 15% and 20% in the fourth quarter.
Chemical, plastics and rubber products manufacturing profits fell 6.6% to $2.5 billion in the fourth quarter.
Partially offsetting these declines was an increase in profits for fabricated metal products and machinery manufacturing, up 14.5% to $1.9 billion.
Profits in the computer and electronic products manufacturing industry fell from $41 million to $3 million in the fourth quarter. This marked the second consecutive decline in profits and fifth decrease in eight quarters.
Operating profits in wholesale trade rose 5.0% to $8.3 billion. Profits for machinery, equipment and supplies merchant wholesalers rose 12.9% to $1.7 billion, while other merchant wholesalers saw profits increase 5.5% to $4.4 billion. Together, these two groups accounted for most of the growth in the fourth quarter.
Operating profits in the retail sector rose 1.3% to $4.0 billion. Gains were reported at furniture, home furnishings, electronics and appliance stores, clothing, department and other general merchandise stores as well as other retailers.
Transportation and warehousing profits rose 2.1% to $4.4 billion. Pipelines, warehousing and transportation support activities profits grew 5.8% to $1.9 billion, while transportation fell 0.5% to $2.5 billion.
Information and cultural industries profits increased 5.2% to $4.5 billion, largely on the strength of a 5.8% rise in profits for the telecommunications industry to $3.3 billion.
Operating profits in the financial sector declined 9.8% to $21.9 billion in the fourth quarter.
Profits for depository credit intermediaries decreased 10.1% to $9.6 billion.
Insurance carriers reported profits of $3.1 billion, down 24.5% from the third quarter.
Note to readers
Quarterly financial statistics are compiled using financial information provided by enterprises that derive this data from their financial statements. Starting 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 estimates for the first, second and third quarters of 2014 have been revised. For more information on seasonal adjustment, see Seasonally adjusted data — Frequently asked questions.
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 and/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.
Aggregate balance sheet and income statement data for Canadian corporations are now available through CANSIM at the national level for 22 industry groupings.
The fourth quarter 2014 issue of the Quarterly Financial Statistics for Enterprises (Catalogue number61-008-X) will be available soon.
Financial statistics for enterprises for the first quarter will be released on May 28.
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To enquire about the concepts, methods, or data quality of this release, contact Daryl Keen (613-864-8550; email@example.com) or Philippe Marceau (613-864-8790; firstname.lastname@example.org), Industrial Organization and Finance Division.