Financial and taxation statistics for enterprises, 2015

Released: 2017-03-15

In 2015, corporate operating profits in Canada fell 5.8% from 2014, to $358.6 billion. The overall profit decline of $22.2 billion in 2015 contrasts with the $18.5 billion increase registered the previous year.

Operating profits in the non-financial sector declined 12.4% in 2015, to $235.1 billion. On the other hand, the finance and insurance sector recorded an increase in profits, up 9.9% to $123.5 billion. This gain followed the 3.5% operating profit decline reported by the financial industries in 2014.

For all corporations, net profit reached $238.1 billion in 2015, down 20.3% from the previous year. Taxable income rose 0.7% to $283.6 billion, after adjusting for timing, prior year tax losses and other differences. Total corporate taxes increased 1.6% to $68.9 billion. The federal portion of corporate taxes was $41.5 billion, while the provincial portion amounted to $27.4 billion.

Chart 1 
Annual operating profits

Non-Financial Sector

Largest profit decline for non-financial industries since 2009

Canada's non-financial sector reached $235.1 billion in operating profits in 2015, a decline of 12.4% from the previous year. Profits dropped by $33.3 billion, marking the largest decline for the non-financial sector since posting a $59.6 billion decrease in 2009. Decline in operating revenue (down 1.2% from 2014) outpaced the drop in operating expenses (down 0.3% from 2014), reducing the profit margin of non-financial industries.

In total, 37 of the 57 industries in the non-financial sector registered greater profits compared with the previous year.

The oil and gas extraction industry reported an operating loss of $13.9 billion in 2015, down $31.4 billion from the previous year. Petroleum and coal products manufacturing was also down 71.1% to $4.2 billion. Both industries were markedly affected by the lowest oil prices observed in more than five years. Excess supply due to increased production by OPEC countries, rapid growth in the production of shale oil in the United States and weak global demand were all contributing factors.

Chart 2 
Operating profit/loss in oil and gas extraction and petroleum and coal products manufacturing

The year 2015 saw a decline of the Canadian dollar, depreciating year-over-year from 87 cents in December 2014 to 73 cents by the end of 2015. This decrease prompted expectations that exports in the manufacturing sector would lead to growth in this sector during the period.

Operating profits in manufacturing dropped 9.9% from the previous year to $47.4 billion. The greatest share of the decline was posted by petroleum and coal products manufacturing, down $10.3 billion.

Excluding petroleum and coal products manufacturing, operating profits in manufacturing increased $5.0 billion annually. This marked a 13.2% increase from 2014. Contributing to this growth were computer and electronic product manufacturing, up $1.9 billion, and motor vehicle and parts manufacturing, up $1.5 billion.

In the retail sector, operating profits rose 22.2% to $22.9 billion. Clothing, department and other general merchandise stores led the growth, up 43.5% from the previous year. Profits also increased for food and beverage stores, up 29.0%, and motor vehicle and parts dealers, up 11.5%.

Financial Sector

Increase in financial sector profits driven by life, health and medical insurance carriers

For the financial sector, which includes finance and insurance industries, operating profits increased by $11.1 billion in 2015 to reach $123.5 billion. This 9.9% growth marked the first increase since 2013, as 2014 saw a decrease of 3.5% in profits. Profitability for the sector in 2015 resulted from a decline in operating expenses of 3.0%.

The largest increase in profits in the financial sector occurred in the insurance industry, where profits grew by 26.6% to reach $20.2 billion. Life, health and medical insurance carriers posted a $6.1 billion increase in operating profits to $4.5 billion, which offset last year's operating profit loss of $1.6 billion.

The change in operating profit was in the opposite direction for property and casualty insurance carriers, which declined $1.9 billion in 2015 compared to 2014.

Corporate income taxes in 2015

Canadian enterprises had $68.9 billion in corporate taxes payable in 2015, an increase of $1.1 billion from 2014. This was the fifth consecutive year of increases in taxes payable. The non-financial industries accounted for more than three-quarters (77.9%) of taxes payable by incorporated businesses, with $32.1 billion and $21.6 billion payable to the federal and provincial governments respectively.

Overall, corporations used $64.3 billion in tax credits in 2015, down from $64.9 billion the previous year. These credits included $26.0 billion in federal tax abatement, as well as $12.9 billion from the small business deduction.

In celebration of the country's 150^th birthday, Statistics Canada is presenting snapshots from our rich statistical history.

Canada 150

The ratio of income taxes to taxable income of companies in Canada has kept pace with the declining corporate tax rate. In 1967, the ratio of income taxes to taxable income by businesses in the non-financial industries was 44.9%; by 2015, the ratio sat at 22.7%.

Chart 3 
Canada 150 - Ratio of income taxes to taxable income for the non-financial sector, 1967-2015

Products

The publication Financial and Taxation Statistics for Enterprises (Catalogue number61-219-X) is no longer available. Data from the Financial and Taxation Statistics for Enterprises program are released in CANSIM.

Contact information

For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).