Chapter 6
The corporate sector: market producers

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6.1 The corporate sector
6.2 Public sector government business enterprises

6.1 The corporate sector

The corporate sector is a broader domain of statistical measurement. It is a combination of the non-financial corporations sector and the financial corporations sector. It encompasses all publicly and privately controlled resident institutional units that conduct business in the market place as either non-financial or financial corporations. They are market producers.

6.1.1 Non-financial corporations sector

The non-financial corporations sector contains all market producing institutional units whose principal activity is the sale of non-financial goods and services in the market place. The composition of this sector is too diverse to categorize its economic activity into specific types of observation.  The sectoring system is applied and the whole category is carried through the sub-sector component and sub-component levels as follows:

• non-financial corporations sub-sector
  • non-financial corporations component
    • non-financial corporations sub-component.

6.1.2 Financial corporations sector

The financial corporations sector contains all market producing institutional units whose principal activity is the sale of financial services in the market place. It is partitioned into these sub-sectors:

• monetary authorities sub-sector
• other depository corporations sub-sector
• other financial intermediaries (except insurance corporations and pension funds) sub-sector
• financial auxiliaries sub-sector
• insurance corporations and pension funds sub-sector.

Each sub-sector is divided into components and sub-components to enable analytic study at finer levels of detail. The components, with their related sub-sector, are

• monetary authorities sub-sector
  • central bank component
  • other monetary authorities component
• other depository corporations sub-sector
  • chartered banks component
  • near banks component
• other financial intermediaries (except insurance corporations and pension funds) sub-sector
  • sales finance and consumer loans component
  • mutual funds component
  • issuers of asset backed securities component
  • other financial intermediaries (except insurance corporations and pension funds specified elsewhere) component
• financial auxiliaries sub-sector
  • investment dealers component
  • other financial auxiliaries component
• insurance corporations and pension funds sub-sector
  • property and casualty insurance component
  • life insurance component
  • segregated funds of life insurance component
  • trusteed pension plans component
  • other insurance and pension funds component.

6.1.3 Quasi-corporations

Quasi-corporations are unincorporated entities that are sufficiently independent to behave as if they were corporations. They must keep a complete set of accounts, including a balance sheet or be capable of producing a complete set of accounts if required. This is a primary condition that must be evidenced in order for an entity to qualify as a quasi-corporation. They may operate in the non-financial corporations sector or the financial corporations sector. Within the public sector, quasi-corporations are government controlled units that are engaged in market production.

6.2 Public sector government business enterprises

In the public sector, publicly controlled non-financial corporations and financial corporations are referred to as government business enterprises. They are market producing institutional units that are controlled by governments. Government business enterprises conduct business in the market place producing goods and services for sale at prices which are economically significant. They may operate as a monopoly or in active competition with similar private sector organizations. These market entities must be classified within the sectors that reflect their primary economic activity. For this reason, government business enterprises are classified in the non-financial corporations sector or the financial corporations sector according to the nature of their activities.

Government business enterprises are usually established by governments through an Act of Parliament or Legislature, in accordance with existing laws governing incorporation or by legally binding agreements. In some instances, an entity will become part of the public sector through the government's takeover of a private corporation, by expropriation, by purchasing a controlling portion of voting shares, or by other means. Certain public sector entities may be classified as government business enterprises in accordance with international convention. For example, the national central bank and monetary authorities that manage foreign exchange are classified as government business enterprises in keeping with this standard.

In instances where ownership is dispersed among governments and/or their enterprises, the ownership of the entire entity and related financial statistics will be prorated on the basis of each government's or business enterprise's investment in relation to the total government / business enterprise equity. An example of these types of shared ownerships can be found in lottery corporations that form enterprise consortiums for the Atlantic and western provinces.

A subsidiary of a government business enterprise whose accounts are consolidated with those of its parent is deemed to be a government business enterprise. Where separate financial statements are available for a subsidiary, then it will be classified according to its own sector and industrial activity.

In the public sector universe, government business enterprises are classified by activity and level of government, namely

• federal non-financial or financial government business enterprises
• provincial and territorial non-financial or financial government business enterprises
• local non-financial government business enterprises
• First Nations and other Aboriginal government non-financial or financial government business enterprises.

6.2.1 Federal government business enterprises

Federal government business enterprises are market producing institutional units that are classified as either non-financial or financial entities according to the nature of their activities.

6.2.1.1 Federal non-financial government business enterprises

Federal non-financial government business enterprises are market-producing institutional units whose principal activity is the sale of non-financial goods and services in the market place. Examples of these activities would be the postal service, port authorities and marketing boards. They are classified in the non-financial corporations sector as public non-financial corporations under federal control.

6.2.1.2 Federal financial government business enterprises

Federal financial government business enterprises are market-producing institutional units whose principal activity is the sale of financial services in the market place. Examples of these activities would be the business development banking, farm credit and the central banking services of the Bank of Canada. They are classified in the financial corporations sector as public financial corporations under federal control.

6.2.2 Provincial and territorial government business enterprises

Provincial and territorial government business enterprises are market producing institutional units that are classified as either non-financial or financial entities according to the nature of their activities.

6.2.2.1 Provincial and territorial non-financial government business enterprises

Provincial and territorial non-financial government business enterprises are market-producing institutional units whose principal activity is the sale of non-financial goods and services in the market place. Examples of these activities would be lotteries, the services of liquor authorities and electricity corporations. They are classified in the non-financial corporations sector as public non-financial corporations under provincial or territorial control.

6.2.2.2 Provincial and territorial financial government business enterprises

Provincial and territorial financial government business enterprises are market-producing institutional units whose principal activity is the sale of financial services in the market place. An example of these activities would be the services of investment and financing corporations. They are classified in the financial corporations sector as public financial corporations under provincial or territorial control.

6.2.3 Local government business enterprises

Currently, the local level of government contains only market producing institutional units that are non-financial in nature.

6.2.3.1 Local non-financial government business enterprises

Local non-financial government business enterprises are market-producing institutional units whose principal activity is the sale of non-financial goods and services in the market place. Examples of these activities would be those of municipally controlled gas and electricity commissions. They are classified in the non-financial corporations sector as public non-financial corporations under local control.

6.2.4 First Nations and other Aboriginal government business enterprises

This category is not yet completed as the task of enumerating the business activities of First Nations and other Aboriginal governments is still in process. In the interim, all Aboriginal business enterprises are classified in the same structure as provincial and territorial government business enterprises.

6.2.4.1 First Nations and other Aboriginal non-financial government business enterprises

First Nations and other Aboriginal government non-financial government business enterprises would be market-producing institutional units whose principal activity is the sale of non-financial goods and services in the market place. Examples of these activities would be mining, power generation and artisan activities. They are classified in the non-financial corporations sector as non-financial corporations under First Nations and other Aboriginal government control.

6.2.4.2 First Nations and other Aboriginal financial government business enterprises

First Nations and other Aboriginal government financial government business enterprises would be market-producing institutional units whose principal activity is the sale of financial services in the market place. Examples of these activities would be business development, insurance, and investment. They would be classified in the financial corporations sector as financial corporations under First Nations and other Aboriginal government control.