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Activities of multinational enterprises in Canada, 2017

Released: 2019-11-18

Multinational enterprises play an important role in the Canadian economy. They were responsible for nearly one-third (32.7%) of Canada's total gross domestic product (GDP) in 2017 and employed close to one-quarter (23.2%) of the total workforce nationally.

Although multinationals are relatively few in number, accounting for less than 1% of all enterprises nationally, they contributed over four-fifths to Canada's total merchandise exports and imports in 2017.

Internationally, the contribution of multinationals in the world economy is also significant; they generate about one-third of global GDP and two-thirds of global international trade.

Chart 1  Chart 1: Activities of multinationals in Canada, as a share of the total economy, 2017
Activities of multinationals in Canada, as a share of the total economy, 2017

The Canadian economy comprises the corporate sector (foreign multinational enterprises, Canadian multinational enterprises and non-multinational enterprises) and the non-corporate sector (organizations operating in the institutional sectors of general government, households, and non-profit institutions serving households). The following analysis refers to the contribution of multinationals within the Canadian corporate sector only.

Foreign multinationals contribute more to international merchandise trade than Canadian multinationals

A significant share of Canada's international merchandise trade is conducted by multinationals operating in the country. More specifically, foreign multinationals accounted for almost two-thirds (65.0%) of the total merchandise trade in the corporate sector in 2017, compared with under one-fifth (18.5%) for Canadian multinationals.

From 2010 to 2017, total merchandise imports and exports by multinationals rose 37.7% to $844.7 billion in 2017. This growth was led by foreign multinationals, whose total merchandise trade increased 35.8% during this period.

On an industry basis, manufacturing accounted for the largest share of Canadian (50.7%) and foreign (49.7%) multinationals' total merchandise trade in 2017.

Canada's international merchandise trade, when profiled by type of enterprise, highlights the strong contribution of foreign firms to this activity in Canada and reflects their involvement in global production and value chains, especially in the manufacturing sector.

Chart 2  Chart 2: Total merchandise trade in the corporate sector, by type of enterprise, 2010 to 2017
Total merchandise trade in the corporate sector, by type of enterprise, 2010 to 2017

One-third of Canadian corporate workforce employed by multinationals

Multinationals employed nearly one-quarter of the total workforce nationally in 2017; within the corporate sector alone, they employed one-third.

Of the 4.4 million Canadian corporate workers who were employed by a multinational in 2017, foreign multinationals (52.8%) accounted for a slightly larger share than Canadian multinationals (47.2%). In comparison, in the United States, foreign multinationals employed far fewer Americans than US multinationals.

On an industry basis, foreign multinationals accounted for almost one-third (32.2%) of manufacturing jobs in Canada, compared with close to one-fifth (19.2%) for Canadian multinationals. In Ontario alone, two-fifths (39.8%) of manufacturing jobs were at foreign multinationals. Manufacturing is the most important sector for foreign direct investment in Canada.

Multinationals generate half of corporate gross domestic product

Multinational enterprises accounted for half, or $652.1 billion, of Canada's corporate GDP (also known as value added) in 2017. Canadian multinationals contributed $350.5 billion and foreign multinationals contributed $301.5 billion.

The finance and insurance sector accounted for almost one-quarter (24.3%) of total Canadian multinational GDP in 2017, followed by the manufacturing sector (13.0%).

For foreign multinationals, manufacturing was the largest sector, representing close to one-third (30.5%) of the total GDP contributed by foreign firms.

A significant portion of value added activity for both foreign and Canadian multinationals was performed in Ontario. Of the $301.5 billion of GDP produced by foreign multinationals in 2017, close to half (47.1%) was generated in Ontario. Similarly, over one-third (36.7%) of the $350.5 billion of GDP produced by Canadian multinationals was located in Ontario.



  Note to readers

With this release, Statistics Canada is launching the Activities of Multinational Enterprises in Canada program which describes the activities of foreign multinationals (firms in Canada controlled by a foreign parent) and Canadian multinationals (Canadian-controlled firms with a foreign affiliate) in Canada. It is an expansion of the previous Activities of Foreign Majority-Owned Affiliates in Canada program.

At the same time, the Activities of Canadian majority-owned affiliates abroad program has been renamed to Activities of Canadian multinational enterprises abroad. This is to ensure a common naming convention for programs concerning the foreign and domestic activities of multinational enterprises.

A new product, "Activities of Multinational Enterprises in Canada: Interactive Tool," which allows users to quickly, easily and efficiently browse these data, is now available.

A new study, "Employment at multinational enterprises in Canada," is also now available. It focuses specifically on the characteristics of employment at foreign and Canadian multinational enterprises operating in Canada, by province and industry.

Canada's total gross domestic product (GDP) at basic prices, also known as "value added," was derived from table 36-10-0221-01. It is the sum of all goods and services produced in Canada less intermediate consumption plus taxes less subsidies. Provincial based GDP was benchmarked to the supply and use program (table 36-10-0478-01) for 2010 to 2016. For reference year 2017, GDP at the provincial industry level was estimated based on all the information available at the time of the release.

The primary statistical unit used in this analysis for merchandise trade, GDP and employment is the establishment level. All other variables are presented at the enterprise level.

Products

A new product, "Activities of Multinational Enterprises in Canada: Interactive Tool" (Catalogue number71-607-X), is now available.

A new study, "Employment at multinational enterprises in Canada" (Catalogue number13-605-X), is also now available.

The updated Canada and the World Statistics Hub (Catalogue number13-609-X) is available online. This product illustrates the nature and extent of Canada's economic and financial relationship with the world using interactive graphs and tables. This product provides easy access to information on trade, investment, employment, and travel between Canada and a number of countries, including the United States, the United Kingdom, Mexico, China, and Japan.

The Methodological Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-607-X) is available.

The User Guide: Canadian System of Macroeconomic Accounts (Catalogue number13-606-G) is also available. This publication will be updated to maintain its relevance.

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).

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