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Quarterly financial statistics for enterprises, third quarter 2019

Released: 2019-11-26

Canadian corporations' operating profits

$108.6 billion

Third quarter 2019

0.4% increase

(quarterly change)

Corporate operating profits edge up

Canadian corporate operating profits continued to grow in the third quarter, albeit at a slower pace. Corporate profits edged up 0.4% to $108.6 billion from the second quarter. Compared with the third quarter of 2018, operating profit decreased 5.4%.

Operating profits have grown for the last two quarters, after declining in the first quarter of 2019 and the fourth quarter of 2018.

While non-financial corporate profits were down (-$341 million, or -0.5%), this decline was offset by a slight increase in financial corporate profits (+$729 million, or +2.2%), contributing to the overall growth in Canadian corporate profits in the third quarter.

Chart 1  Chart 1: Quarterly operating profits
Quarterly operating profits

Operating profit up in the financial industry

Operating profits of financial corporations increased by 2.2% to $34.3 billion in the third quarter, which marks the second consecutive increase. Life, health and medical insurance carriers contributed to the growth in the third quarter due to lower actuarial liabilities expense.

Conversely, operating profit for local credit unions declined $214 million (-17.5%) from the second quarter of 2019, to $1.0 billion in the third quarter. The decrease was due to unrealized derivatives losses and higher provisions for loan losses.

Manufacturing operating profit down in 10 of 13 industries

Overall operating profit in manufacturing declined $896 million (-6.3%) in the third quarter, to $13.4 billion. Operating profit declined in 10 of 13 manufacturing industries.

Petroleum and coal products manufacturing led the loss in operating profit, down $418 million (-16.9%) to $2.1 billion in the third quarter. Lower oil prices, planned refinery maintenance and lower sales were the main drivers behind the decline.

Wood and paper manufacturing operating profit was down $350 million, going from $605 million in the second quarter to $255 million in the third quarter. This marks the fifth consecutive quarterly decline in operating profit. Continued weaker market conditions, high log costs and production curtailment were the reasons for the decline.

Wholesale operating profit slightly down

Wholesale trade operating profits declined $170 million (-1.9%) in the third quarter, to $8.8 billion. Machinery, equipment and supplies merchant wholesalers led the decline, down $231 million (-9.2%). This decrease was attributable to lower sales of farm, construction, forestry, mining and other industrial machinery and equipment. Imports in this sector also showed a decline due to lower demand.

Inventories growing at a slower pace than overall assets in the Canadian corporate sector

Total assets in the Canadian corporate sector are four times larger in 2019 than in 2000, while inventories are twice as large.

The level of inventories is a useful indicator for industries' economic performance and is often used as a measure of consumer confidence. High levels of inventories in comparison with previous periods suggest that consumers are not spending as much. When considered as a proportion of total assets, inventories also shed light on the efficiency of the Canadian economy.

Inventory's share of total assets in the corporate sector fell from 5.6% in the first quarter of 2000 to 3.4% in the third quarter of 2019.

The share of total assets owned by the manufacturing industry in the Canadian corporate sector fell from 15.8% in the first quarter of 2000 to 8.4% in the third quarter of 2019. Total assets in the Canadian corporate sector owned by the retail and wholesale industries have remained around the same levels since 2000 (see Chart 2).

Manufacturing inventories as a percentage of total assets for the corporate sector fell from 2.1% in 2000 to 0.8% in the third quarter of 2019, a drop of 61.9% (see Chart 3).

Wholesale's inventories as a percentage of total assets for the corporate sector fell from 1.1% in 2000 to 0.7% in the third quarter of 2019, while retailers' inventory share fell from 1.0% to 0.7% in the same period (see Chart 3).

Fixed assets owned by the Canadian corporate sector grew at a faster pace than inventories in the period from 2000 to 2019. The slower growth in inventories could suggest that some businesses have effectively implemented new technologies which help improve their supply chain, like just-in-time inventory management, and improved enterprise software which facilitates smaller inventory stocks.

Although the drop in inventories as a proportion of total assets for the corporate sector is explained by the change in the industries' size within the Canadian economy, the magnitude of the change is not equal for all industries as each one is subject to the demands of their particular business model.

Inventories represent a high proportion of retailers' total assets

Despite slower growth in inventories in the Canadian corporate sector, the retail industry remains highly dependent on inventories for generating revenue.

Retail industry's inventories as a percentage of their total assets were eight times higher than in the overall Canadian corporate sector at the end of the third quarter.

The nature of the retail industry might be the primary reason for higher levels of inventories. Customers typically prefer a variety of choices when shopping, and so retailers offer a wide selection in their stores to attract clients. This leads to higher stocks of inventories held. Until recently, one of the ways traditional brick and mortar retailers have competed with online retailers is by providing immediate access to products. This advantage requires physical inventories in store for consumers to purchase, which puts upward pressure on inventory.

On the other hand, higher inventories have a trade-off in the form of increased storage costs. Additionally, there are opportunity costs associated with inventories—since the funds spent to purchase additional inventories cannot be used to advance other business opportunities. Retail enterprises that are able to compete with lower stocks of inventories are generally more efficient.

The portion of inventory in total assets fell by one-fifth in the retail industry, from 34.9% in the first quarter of 2000 to 27.7% in the third quarter of 2019 (Chart 4).

The ratio of inventories to operating profit—a measure of a company's efficiency in managing inventory—trended down during the same period, falling from 21.6% in first quarter of 2000 to 14.1% in the third quarter of 2019 for the retail industry. This suggests the industry is able to generate higher profit with lower stocks of inventory.

Since 2000, the stocks of inventory have been trending down, which suggests that retailers are able to more effectively manage their inventories and apply excess capital towards more productive business ventures.

Chart 2  Chart 2: Shares of the manufacturing, wholesale, and retail industries in the Canadian corporate sector
Shares of the manufacturing, wholesale, and retail industries in the Canadian corporate sector

Chart 3  Chart 3: Proportion of inventories to total assets, overall Canadian corporate sector
Proportion of inventories to total assets, overall Canadian corporate sector

Chart 4  Chart 4: Proportion of inventories to total assets, selected industries
Proportion of inventories to total assets, selected industries

  Note to readers

Data on quarterly profits in this release are seasonally adjusted and expressed in current dollars. Financial data for the first and second quarter of 2019 have been revised.

For information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions.

Quarterly financial statistics for enterprises are based on 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. For financial industries, these are included, along with interest paid on deposits.

In this release, all profits are operating profits unless otherwise stated. Operating profits differ from net profits, which represent the after-tax profits earned by corporations.

For more details on the concept of actuarial liabilities, consult the page Actuarial liabilities.

As of January 1, 2019, a new accounting standard on leases came into effect. Enterprises preparing their financial statements in accordance with International Financial Reporting Standards (IFRS) will start adopting the new IFRS 16 which requires lessees to recognize most leases on their balance sheet. This may translate into increases in their level of assets and liabilities due to the inclusion of existing and new leases in their balance sheet in accordance with the new standard.

Real-time tables

Real-time tables 33-10-0160-01 and 33-10-0161-01 will be updated on December 16. For more information, consult the document Real-time tables.

Next release

Financial statistics for enterprises for the fourth quarter will be released on February 25, 2020.


Aggregate balance sheet and income statement data for Canadian corporations are now available.

Data from the Quarterly Survey of Financial Statements are also 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; or Media Relations (613-951-4636;

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