Enterprises react to competition

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Non-financial corporations (those outside the banking and investment industry) weathered the economic downturn of mid-2008 with little change to their debt levels.

These corporations entered the economic downturn with one of the lowest debt loads in the past four decades. By mid-2009, their financial position had not changed significantly.

Since the late 1990s, non-financial corporations have increasingly financed new assets with equity rather than debt. Corporations were able to take advantage of strong profits—especially from 2003 to 2006, when their net profits increased almost 25% a year on average.

Net profits and equity markets declined after the middle of 2008; however, the corporations' debt load remained more or less stable since credit was less accessible and fewer corporations sought to increase their debt.

Table 4.b Enterprises' response to new competition, 2009

	% of all enterprises
Change product price	69.5
Introduce new product	40.1
Change product quality	37.7
Change marketing expenditures	33.3
No action	20.5
Speed up new product introduction	18.1
Other action	19.0
Adopt new process	17.6
Source: Statistics Canada and Industry Canada, 2009.