Section 1: 2011 Overview
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Corporate operating profits in Canada reached $342.7 billion in 2011, up $43.4 billion or 14.5% from 2010, and surpassing the previous peak of $311.9 billion in 2008.
Increased profits were seen in both the non-financial and financial sectors. Growth was higher in the non-financial sector, where operating profits of $251.0 billion represented a 15.9% increase over 2010. In the financial sector, operating profits grew by 11.0% from the previous year, to $91.6 billion.
In 2011, net profit reached $262.7 billion, up 19.5% from 2010. Taxable income increased by 17.8% to $233.6 billion, after adjusting for timing, prior year tax losses and other differences. Total corporate taxes rose 9.7% to $58.7 billion. The federal portion of taxes payable was $35.6 billion, while the provincial portion accounted for $23.1 billion.
Note to readers
Annual financial statistics are compiled using financial information provided by enterprises as well as administrative (tax) records. Starting on January 1, 2011, Canadian publicly accountable enterprises were required to replace Canadian Generally Accepted Accounting Principles (CGAAP) with International Financial Reporting Standards (IFRS) when preparing their financial statements for fiscal years starting on or after January 1, 2011. Canadian private enterprises were required to replace CGAAP by Accounting Standards for Private Enterprises or IFRS. The adoption of new accounting standards by some enterprises since the beginning of 2011 may affect comparability with prior years.
Non-Financial Sector
Non-Financial Sector experiences largest growth in operating profits
Operating profits of Canada’s non-financial industries grew to $251.0 billion in 2011, a 15.9% increase from the previous year. This was the second consecutive year of growth, following the 27.8% increase registered in 2010 over 2009.
In total, 42 of the 57 industries in the non-financial sector experienced growth in operating profits. Energy-based industries were a large driver of this growth. As in the previous year, the petroleum and coal products manufacturing industry was the largest overall contributor to growth in this sector (+$6.7 billion). The second largest growth in operating profits also occurred in oil and gas extraction and support activities (+$5.9 billion). Combined, these two industries attained operating profits of $31.7 billion in 2011, an increase of 65.5% over the $19.2 billion recorded in 2010, but still lower than the previous peak of $52.7 billion reached in 2008.
In the manufacturing sector, 15 of 22 industries reported increased operating profits in 2011 of $57.4 billion, up $13.2 billion, or 29.8% from the previous year. This was the second year of growth in operating profits for a sector that had experienced significant declines in 2008 and 2009. As noted, growth was highest in the petroleum and coal products manufacturing industry (+$6.7 billion). Other industries contributing to growth in this sector included fabricated metal product and machinery manufacturing (+$1.8 billion), primary metal manufacturing (+$1.7 billion), and motor vehicle and trailer manufacturing (+$1.2 billion).
Real estate also reported an increase in operating profits (+$2.6 billion), followed by construction (+$1.7 billion) and agriculture, fishing, hunting, trapping and support activities (+$1.7 billion).
Wholesaling industries showed a 17.6% gain in operating profits in 2011, to $22.0 billion. Retail sector operating profits were flat, down 1.1%, from $22.3 billion to $22.1 billion. Three of seven retail industries posted higher profits in 2011 than 2010.
Financial Sector
Financial industry posts two years of growth following two years of decline
In 2011 the financial sector posted a second consecutive year of growth. Operating profits reached $91.6 billion, an increase of 11.0% from the previous year.
Most of the financial industries experienced growth. Banking and other depository credit intermediation (+$7.2 billion) accounted for much of the growth. Securities and commodity exchanges and other financial investment activities followed with growth of $4.1 billion.
Among the four industries in this sector that experienced declines, life, health and medical insurance carriers had the largest losses, with a $1.8 billion drop in operating profit. Rising operating expenditures outpaced operating revenue growth. However, property and casualty insurance carriers saw operating profits increase 6.5%, to $5.0 billion.
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