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Quarterly financial statistics for enterprises, third quarter 2020

Released: 2020-11-20

Canadian corporations' net income before taxes, seasonally adjusted

$81.0 billion

Third quarter 2020

The third quarter marked a gradual resumption of economic activity across the country with Canadian corporations reporting a 44.9% increase in net income before taxes, an increase of $25.1 billion to $81.0 billion. Operating revenue rose 10.2 %, to $1,058.8 billion during the quarter.

Chart 1  Chart 1: Corporate net income before taxes (seasonally adjusted)
Corporate net income before taxes (seasonally adjusted)

Net income before taxes in the non-financial sector recovers

As health restrictions began lifting during the quarter, many non-financial sectors witnessed a resurgence of activity. Net income before taxes in the non-financial sector increased 64.0% (or $18.6 billion) to $47.6 billion, after declines in the previous quarter associated with COVID-19-related restrictions.

Chart 2  Chart 2: Change in income or loss before income taxes in major non-financial industries
Change in income or loss before income taxes in major non-financial industries

Manufacturing net income before taxes increases

Net income before taxes in the manufacturing industry led the overall increase for the non-financial industries, with net income before taxes increasing by 205.9% (or $7.9 billion) to reach $11.8 billion, buoyed by strong growth in several industries during the quarter.

Motor vehicle and trailer manufacturing (+$1.2 billion) and motor vehicle parts manufacturing (+1.0 billion) posted notable increases in net income, led by higher exports. According to the latest Canadian International Merchandise Trade data, the third quarter marked the highest level of motor vehicles and parts exports since the third quarter of 2019.

Wood product and paper manufacturing recorded an increase in net income before taxes of 59.5% (or $859 million) to $2.3 billion, as revenues increased on higher prices. Higher prices were driven by limited supply and increased demand. On the supply side, mill curtailments and COVID-related restrictions limited the amount of available product. On the demand side, a rise in new housing starts coupled with increased renovation activity, fueled higher demand in this industry.

Net income before taxes for industries operating in the energy sector see increases

Net income before taxes in the oil and gas extraction and support services industry increased by $4.5 billion in the third quarter. Higher oil prices and volumes are the main contributors to the increase. Nonetheless, the industry is still reporting losses, recording a loss of $6.5 billion in the third quarter, an improvement from the $11.0 billion loss in the previous quarter.

Mining and quarrying and support activities' net income before taxes recorded a $2.1 billion increase, reaching $1.8 billion, mainly attributable to higher commodity prices.

Retail trade sector sales recover as stores begin to reopen

Net income before taxes in the retail trade sector increased (+126.4% or +$2.4 billion) to $4.3 billion. This increase came as public health restrictions were mostly lifted during the quarter, thus allowing traditional brick and mortar stores to gradually reopen and merchants to partially recoup sales lost in the previous quarter.

Motor vehicles and parts dealers led the increase in net income before taxes (+74.6% or +$1.7 billion) as car dealership sales rose for the quarter. Other retailers followed, with an increase (+31.9% or +$503 million) in net income before taxes.

The arts, entertainment and recreation, and accommodation and food services industry begins to recover

Net income before taxes in the arts, entertainment and recreation, and accommodation and food services industry increased (+110.3% or +$1.7 billion) to $157 million, from a loss of $1.5 billion in the second quarter. This rebound can be attributed to the progressive reopening and new rules and restrictions that were put in place for enterprises in this industry during the third quarter.

Financial sector net income before taxes is up

Net income before taxes for financial corporations increased 24.3% (+$6.5 billion) to $33.4 billion in the third quarter, driven by gains in the banking and depository credit intermediation industry.

The banking and depository credit intermediation industry led the increase in net income before taxes for the financial industries, with a rise of 34.6% (or $2.1 billion) to $8.3 billion. Increased revenues and lower loan loss provisions—the previous quarter reflected the impact of the onset of COVID—contributed to the increase in net income in the banking and depository credit intermediation industry this quarter.

  Note to readers

Data on quarterly net income before taxes in this release are seasonally adjusted and expressed in current dollars, unless otherwise stated.

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. The survey collects data on balance sheet, income statement and additional disclosures of enterprises.

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.

Survey changes

The following changes were introduced to the survey starting with the first quarter of 2020:

  1. New content was implemented in the first quarter to align the survey to new accounting standards adopted by corporations starting in 2011.
  2. New industrial breakdowns, which allow for more granularity in the dissemination of data, were implemented. As a result, some industry groupings were merged, others were split and some remained the same.
  3. The survey's sample was modified to support the new industrial breakdowns; however, a maximum sample overlap with the previous sample was adopted.
  4. A more automated imputation strategy was implemented to streamline the process and to reduce the need for manual intervention.

Analytical focus change

Up to the fourth quarter of 2019, the Quarterly Survey of Financial Statements (QSFS) focused primarily on operating profit/losses to track the financial performance of enterprises. Operating profit are profits an enterprise earns from its core business operations and is the difference between operating revenues and operating expenses.

The content for the QSFS questionnaire, up until the fourth quarter of 2019, did not include a distinction between operating revenues and expenses. To calculate an enterprise's operating profit, additional information on expenses, in particular, cost of goods sold (COGS), was collected and included in the calculation.

Over time, the response rate for the COGS variable declined. As well, the accounts used by financial industries and non-financial industries were different due to the nature of their activity, with some enterprises no longer reporting operating profits in their financial statements.

Changes to accounting standards in 2006 (new financial instruments standards) and in 2011 (adoption of International Financial Reporting Standards) included the introduction of gains/losses in asset revaluations, which further complicated the calculation of operating profits.

Asking respondents to report categories of revenue and expenses as well as a breakdown, within each of those two categories, between operating and non-operating amounts would have increased response burden.

Being an economy-wide program, the QSFS requires a certain degree of comparability in the concepts used to assess financial performance across enterprises and industries.

To overcome some of the difficulties in terms of comparability at the operating profit level, and to avoid increased response burden, starting with the first quarter of 2020, the focus of QSFS analysis will change from operating profit to net income before income taxes to better assess an enterprise's financial performance. Net income before income taxes is income earned from normal business activities.

Net income before income taxes is a more inclusive measure, and its calculations are more standardized between enterprises and industries.

Revisions, benchmarking and back casting

The third quarter 2020 release of the QSFS includes revised estimates from the first and second quarter 2020.

Efforts are being made to back-cast these data to the first quarter of 2010 to allow for better historical comparisons. However, as more than one cycle of the new content is required before being able to start this exercise, users are encouraged to use caution when making historical comparisons.

It is expected the back-casting work will be completed and results released at the end of 2021.

Larger than usual revisions may be anticipated in the future, as quarterly revisions, annual benchmarking, back casting and receipt of new survey data from respondents will be incorporated in order to improve data quality and include the most up-to-date data.

Business performance and ownership statistics portal

The Business performance and ownership statistics portal, accessible from the Subjects module of our website, provides users a single point of access to a wide variety of information related to business performance and ownership in Canada.

Next release

Financial statistics for enterprises for the fourth quarter of 2020 will be released on February 24, 2021.


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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