Foreign control in the Canadian economy, 2011
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Released: 2013-10-30
In 2011, the value of assets, revenues and profits increased for both foreign and Canadian-controlled enterprises. The shares of foreign-controlled assets and revenues declined from 2010, while the share of profits under foreign control was up over the previous year.
Canadian-controlled asset values increased 13.3% in 2011, compared with a 9.9% gain for foreign-controlled assets. Foreign-controlled enterprises accounted for 18.7% of assets in 2011, down from 19.2% in 2010.
Revenues of Canadian-controlled enterprises rose 8.3% compared with a 7.3% increase for those under foreign control. As a result, the share of revenues under foreign control edged down from 29.1% in 2010 to 28.9%.
Operating profits for foreign-controlled enterprises increased 16.6% in 2011, while those under Canadian control rose 13.9%. Consequently, the share of profits under foreign control rose from 22.3% to 22.7%. This gain was mostly attributable to the non-financial sector.
Non-financial industries
Among non-financial industries, the share of assets under foreign control decreased to 26.2%, while the proportion of revenues under foreign control edged down to 30.0%. The share of foreign controlled profits rose from 24.5% to 25.2%.
Manufacturing remained the largest sector in terms of non-financial assets. It was also the sector with the biggest share of foreign-controlled assets, at 50.6% in 2011, down from 52.5% in 2010.
The value of assets for Canadian-controlled manufacturers rose 8.4%, compared with a gain of 0.6% for those under foreign control.
The share of foreign-controlled manufacturing revenues declined from 48.7% to 47.0%, as revenues for Canadian-controlled manufacturers increased at a faster pace than revenues for foreign enterprises.
In 2011, foreign manufacturers reported profit growth of 36.5% compared with a year earlier. As a result, the share of manufacturing profits under foreign control rose from 40.4% to 42.5%. However, this was still below the range of 50% to 55% generally observed since 1999.
In the oil and gas extraction industry, the share of profits for foreign-controlled enterprises fell to 43.7% in 2011. This occurred as profits for foreign enterprises increased at a slower rate than they did for enterprises under Canadian control.
Finance and insurance industries
In the finance and insurance industries, foreign-controlled enterprises accounted for 12.7% of assets in 2011, unchanged from 2010. Foreign enterprises held 19.5% of revenues, down from 20.2% in 2010, and 15.7% of operating profits, down from 16.5% in 2010.
Canadian-controlled assets among enterprises operating in the financial sector increased 16.9% in 2011, compared with a 17.0% gain for enterprises under foreign control.
Canadian-controlled enterprise revenues were up 8.2% in 2011, compared with 3.5% growth for revenues of foreign-controlled enterprises.
Financial sector operating profits rose for both Canadian-controlled enterprises (+12.0%) and foreign-controlled enterprises (+5.8%) in 2011.
Foreign control by country
American-controlled enterprises continued to dominate the shares of assets, revenues and profits under foreign control.
These enterprises controlled 49.4% of all foreign assets and 55.4% of all foreign operating revenues in 2011, both down from the previous year. However, the US-controlled share of foreign profits grew to 58.0% in 2011.
Enterprises controlled from the United Kingdom accounted for 13.8% of assets in 2011, up from 12.9% in 2010. Almost two-thirds of assets under United Kingdom (64.8%) control were in the financial sector compared with 35.2% in the non-financial sector.
Dutch-controlled enterprises represented the third-largest share of foreign-controlled assets in 2011 at 8.0%. Their distribution was fairly even between the financial sector (54.3%) and the non financial sector (45.7%).
No other country has held more than 5.0% of foreign-controlled assets in the last several years.
Note to readers
Under the authority of the Minister of Industry, 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 non-resident 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. The document being released today is the report for reference year 2011.
These statistics are compiled from enterprise level data. An enterprise can be a single corporation or a family of corporations under common ownership or control, for which consolidated financial statements are produced.
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.
The report Corporations Returns Act, 2011 (Catalogue number61-220-X), is now available from the Browse by key resource module of our website under Publications.
Contact information
For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca).
To enquire about the concepts, methods or data quality of this release, contact Jason Leonard (613-951-5593; jason.leonard@statcan.gc.ca), Industrial Organization and Finance Division.
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