The Daily
|
 In the news  Indicators  Releases by subject
 Special interest  Release schedule  Information

Foreign control in the Canadian economy, 2016

Released: 2018-08-01

Both Canadian (+6.1%) and foreign-controlled (+1.3%) asset values increased in 2016. The foreign-controlled asset share edged down, from 16.9% in 2015 to 16.2% in 2016. This was the ninth consecutive year where the share of assets under foreign control decreased.

Foreign-controlled revenue growth (+1.8%) and Canadian-controlled revenue growth (+1.5%) both increased in 2016. The year-over-year share of revenues under foreign control in 2016 was unchanged at 27.8%. Canadian-controlled operating profits increased by 5.2%, and those under foreign control were up 8.2%. The share of profits under foreign control in 2016 increased to 17.3%.

Enterprises from the United States, the United Kingdom, the Netherlands, France, Germany and Japan accounted for 79.1% of the foreign-controlled assets in Canada in 2016. US-controlled enterprises maintained the largest overall share, with 52.0% of total foreign-controlled assets, 55.4% of revenues, and 60.9% of profits.

New findings on who controls Canadian corporations and how this has changed over the last 10 years

Chart 1  Chart 1: Shares of assets, operating revenue and operating profits under foreign control in Canada, 2007 to 2016
Shares of assets, operating revenue and operating profits under foreign control in Canada, 2007 to 2016

This release includes insights into the extent of foreign control in the Canadian corporate economy from 2007 to 2016, taken from the new report "Corporations Returns Act: New findings on who controls Canadian corporations and how this has changed over the last 10 years," published today. The report illustrates changes in foreign control by macro-region—namely, the Americas, Europe, Africa, Asia, Oceania and Antarctica and Adjacent Islands—and provides new country information on countries such as Mexico, Switzerland and China, for both the financial and non-financial industry groupings.

From 2007 to 2016, foreign-control in the Canadian economy expanded, as measured by the nominal increase in foreign-controlled assets which reached almost $2 trillion in 2016. However, the share of foreign control in Canadian corporations has diminished over the last 10 years, indicating that growth in foreign-controlled assets is outmatched by growth in Canadian-controlled assets.

Chart 2  Chart 2: Total value of assets under foreign control in Canada, 2007 to 2016
Total value of assets under foreign control in Canada, 2007 to 2016

The main finding in this report pertains to changing trends in foreign control; while the share of foreign-owned assets in the Americas and Europe macro-regions fell from 2007 to 2016, Asia saw its relative share increase. This report also highlights the prevalence of foreign control in Canada's non-financial industries.

Chart 3  Chart 3: Shares of total foreign-controlled assets by macro-region from 2007 to 2016
Shares of total foreign-controlled assets by macro-region from 2007 to 2016

  Note to readers

Under the authority of the Minister of Innovation, Science and Economic Development, Statistics Canada administers the Corporations Returns Act, which requires the collection of financial and ownership information on corporations conducting business in Canada. This information is used to evaluate the extent of non-resident control of the Canadian corporate economy.

The Corporations Returns Act requires that an annual report be submitted to Parliament summarizing the extent to which foreign control is prevalent in Canada.

The financial information on foreign control in the Canadian economy is derived from administrative data received from the Canada Revenue Agency. This information is based on financial statements filed with corporate annual income tax returns. Therefore, the reference period has a lag of two years.

These statistics are compiled from enterprise level data. An enterprise can be a single corporation or a family of corporations under common ownership or control, for which consolidated financial statements are produced.

Three components are used to measure foreign control: assets, operating revenue and operating profits.

Asset-based measures of foreign control provide a longer term perspective. Assets are a stock item, reflecting economic decisions and market conditions that evolve more slowly over time.

Revenue-based measures, on the other hand, represent a flow item and are closely tied to the business cycle. Revenue tends to reflect current business conditions, causing revenue-based measures to be more volatile than asset-based measures.

Profits are a measure of the financial health and well-being of an economy and can be used to assess its performance and sustainability.

Products

The reports Corporations Returns Act, 2016 and Corporations Returns Act: New findings on who controls Canadian corporations and how this has changed over the last 10 years (Catalogue number61-220-X) are now both available.

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).

Date modified: