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Quarterly financial statistics for enterprises, fourth quarter 2019

Released: 2020-02-25

Canadian corporations' operating profits

$112.3 billion

Fourth quarter 2019

3.6% increase

(quarterly change)

Corporate operating profits increase

Canadian corporate operating profits grew $3.9 billion (+3.6%) to $112.3 billion in the fourth quarter, marking the third consecutive quarterly increase in operating profit. Compared with the fourth quarter of 2018, operating profit was up 4.8%.

The financial industries led the growth in the fourth quarter, followed by the non-financial industries which posted smaller growth.

Chart 1  Chart 1: Quarterly operating profits
Quarterly operating profits

Operating profit up in the financial industry

Operating profits of financial corporations increased by 10.6% to $37.2 billion in the fourth quarter, which marks the third consecutive increase. Life, health and medical insurance carriers contributed to the growth in the fourth quarter due to lower actuarial liabilities expense.

In contrast, operating profit for banking and other depository credit intermediation declined $335 million (-2.5%) from the third quarter of 2019, to $12.9 billion in the fourth quarter. The decrease was attributable to lower non-interest revenue.

Operating profits for local credit unions increased by 21.6% to reach $1.3 billion at the end of the quarter.

Manufacturing operating profit down for the sixth consecutive quarter

Overall operating profit in manufacturing was down $371 million (-2.7%) in the fourth quarter, to $13.5 billion, with 5 of 13 manufacturing industries posting declines.

Petroleum and coal products manufacturing led the loss in operating profit, down $484 million (-22.5%) to $1.7 billion in the fourth quarter. Lower oil prices, higher expenses, and a refinery shut down were the main factors behind the decline.

On the other hand, motor vehicle and parts manufacturing operating profit increased $132 million (+12.2%) despite longer seasonal plant shutdowns and the closure of the General Motors Oshawa manufacturing plant in December.

Wood and paper manufacturing operating profits increased by 8.6% in the fourth quarter to $519 million, marking the first increase after declining for the last five consecutive quarters.

Wholesale operating profit down

Wholesale trade operating profits declined $266 million (-2.9%) in the fourth quarter, to $8.8 billion. Machinery, equipment and supplies merchant wholesalers led the decline, down $103 million (-4.2%). This decrease was attributable to lower sales of farm, construction, forestry, mining and other industrial machinery and equipment as well as communications equipment.

Chart 2  Chart 2: Change in operating profits in major non-financial industries
Change in operating profits in major non-financial industries

The rise and fall of operating profits of the wood product manufacturing industry

Non-seasonally adjusted operating profits in the wood product manufacturing industry declined $1.5 billion in the span of a year and a half, falling from their highest value in over a decade in the second quarter of 2018 to a negative dollar value in the third quarter of 2019. This was caused by a simultaneous decrease in firms' revenues and an increase in their expenses. Data from the Quarterly Survey of Financial Statements, as well as data on input and output prices and exports were used to analyze developments in the wood product manufacturing industry in 2018 and 2019.

Wood product prices and wood product manufacturers' profits peaked in 2018

The prices for lumber and other wood products sold by manufacturers operating in Canada increased steeply in the first half of 2018. From January to July 2018, the lumber and other wood products component of the Industrial Product Price Index (IPPI) increased by 10.7%, its largest increase in the span of those months since 2001.

The rise was sustained by increased activity in the US housing market, which is a significant source of demand, as about 70% of Canada's exports of forestry products and building and packaging materials go to the United States. In 2018, Canada's domestic exports to the United States of products in that category reached their highest levels since 2006.

Prices were further inflated by a lack of transportation services in the first half of the year, limited timber supply due to record-setting wildfires and damage caused by the mountain pine beetle, as well as duties imposed by the United States on Canadian exporters in 2017.

Despite concerns about the effect of duties on the wood product manufacturing industry, operating profits in the industry increased in every quarter of 2017. Due to the strong demand and higher prices, operating profits of firms in the wood product manufacturing industry increased by almost half (48.1%) from the first to the second quarter of 2018 to reach near $1.5 billion, their highest value since 2004.

Operating profits climbed back into positive territory in the fourth quarter of 2019, after decreasing for five quarters in a row

Housing construction in the United States began slowing down mid-2018, with seasonally-adjusted housing starts displaying an 11.4% monthly decrease in June, followed by further decreases in September and October 2018. Prices of wood products decreased as well: from July to December 2018, the lumber and other wood products component of the IPPI reversed almost half of the increase that occurred from January to July 2018.

In late 2018 and throughout 2019, several firms in the wood product manufacturing industry announced temporary production curtailments and permanent closures of select operations, citing challenging market conditions, high log prices and timber supply shortages. Though US housing starts recovered and increased beyond their 2018 levels in late 2019, total domestic exports of forestry products and building and packaging materials from British Columbia to the United States in 2019 fell to their lowest level since 2014.

From the second quarter of 2018 to the third quarter of 2019, operating profits in the wood product manufacturing industry fell in each quarter, with a total decrease from $1.5 billion to -$36 million over that time period. An increase in lumber prices, cost reductions related to production curtailments, as well as the recovery in US housing activity in late 2019 led operating profits in the wood product manufacturing industry to climb back into positive territory, settling at $6 million in the last quarter of 2019.

Infographic 1  Thumbnail for Infographic 1: The rise and fall of operating profits in the wood product manufacturing industry
The rise and fall of operating profits in the wood product manufacturing industry

  Note to readers

Data on quarterly profits in this release are seasonally adjusted and expressed in current dollars. Financial data for the first, second, and third quarters 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.

Important upcoming changes for 2020

Starting in the first quarter of 2020, the Quarterly Survey of Financial Statements will become part of the Statistics Canada's Integrated Business Statistics Program. This will provide a more efficient model to produce economic statistics.

Users can expect to see important changes in methodology, an expansion of published financial variables, more detailed industry breakdowns, and the replacement of existing tables with new tables.

Respondents will see changes in questionnaire content, which were incorporated to reflect the current accounting standards used in Canada.

New product

The information sheet "Where in your industry does your company rank?" is now available.

Real-time tables

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

Next release

Financial statistics for enterprises for the first quarter of 2020 will be released on May 26, 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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