Corporations Returns Act
2016
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Introduction
Under the authority of the Minister of Innovation, Science and Economic Development, Statistics Canada administers the Corporations Returns Act which requires the collection of financial and ownership information on corporations conducting business in Canada. This information is used to evaluate the extent of foreign control of the Canadian corporate economy.
The Corporations Returns Act requires that an annual report be submitted to Parliament summarizing the extent to which foreign control is prevalent in Canada. This is the report for reference year 2016.
In this report, three components are used to measure foreign control: assets, operating revenues and operating profits.
- Asset-based measures of foreign control provide a longer term perspective. Assets are a stock item, reflecting economic decisions and market conditions that evolve more slowly over time.
- Revenue-based measures, on the other hand, represent a flow item and are closely tied to the business cycle. Revenues tend to reflect current business conditions, causing them to be more volatile than asset-based measures.
- Profits are a measure of the financial health and well-being of an economy and can be used to assess its performance and sustainability.
These statistics are compiled from enterprise level data. 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.
The report covers all incorporated enterprises in Canada, including federal and provincial government business enterprises (GBEs) but excluding enterprises classified under the North American Industry Classification System (NAICS) to Management of Companies and Enterprises (NAICS 55); Religious Organizations (NAICS 8131); Political Organizations (NAICS 81394); Public Administration (NAICS 91), as well as Funds and other Financial Vehicles (NAICS 526). GBEs are public sector enterprises engaged in operations of a commercial nature.
All industry analysis is based on 21 groups of industries which have been defined using NAICS.
Highlights
- The foreign-controlled share of assets decreased from 16.9% to 16.2%, while the share of operating revenues remained constant at 27.8% in 2016. The foreign-controlled share of operating profits increased over the year from 16.9% to 17.3% in 2016.
- Shares of assets of foreign-controlled enterprises have declined over the ten-year period; assets shares for 2016 stood at 16.2% which is below 21.6% recorded in 2007. Shares of revenue have remained relatively stable over the ten-year period ranging between 27.8% and 30.1%. Foreign-controlled profit shares have experienced somewhat more variation during this ten-year period, fluctuating between 16.9% and 26.5%.
- In the non-financial industries, the share of assets under foreign control was 25.0% in 2016, down slightly from 25.6% the year earlier. The share of operating revenue under foreign control increased slightly to 29.4% from 29.2% the year before. The foreign-controlled share of operating profits also increased, up to 19.6% from 19.0% in 2015.
- Wholesale trade, manufacturing and oil and gas extraction were the non-financial industries with the largest share of foreign control, as measured by assets. The share of assets under foreign control were 55.2% for wholesale trade, 46.8% for manufacturing and 42.9% for oil and gas in 2016.
- In the finance and insurance industries, the foreign-controlled share of assets decreased, from 10.0% to 9.5%, while the revenue share decreased from 15.8% to 15.5%. The foreign-controlled share of profit increased from 13.0% to 13.4%. Non-depository credit intermediation had the highest share of foreign-controlled enterprises within the finance and insurance industries with a share of assets of 47.2%.
- Enterprises from the United States, the United Kingdom, the Netherlands, France, Germany and Japan accounted for 79.1% of the foreign-controlled assets in Canada in 2016. U.S.-controlled enterprises maintained the largest overall share, comprising 52.0% of total foreign-controlled assets, 55.4% of revenues, and 60.9% of profits.
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