Activities of foreign affiliates, 2012
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Released: 2014-09-18
Employment at foreign affiliates of Canadian enterprises advanced by 4.0% in 2012. This marked the third consecutive yearly increase in foreign affiliate employment, as global economic conditions continued to strengthen.
Chart 1
Foreign affiliate employment, 2002 to 2012
European Union leads growth in employment
Employment at Canadian foreign affiliates in the European Union advanced 9.2%, reversing most of the decline of the previous three years. Despite the stronger results in 2012, employment in the region remained below the 2008 peak.
Employment levels in the "other countries" aggregate, that includes a number of emerging economies, increased for the third consecutive year (+6.0%).
Employment growth at Canadian affiliates in the United States was more modest (+1.1%), despite the fact that this economy accounts for roughly half of all Canadian foreign affiliate employment.
Both the service and goods producing sectors experienced employment growth in 2012, with increases of 5.7% and 2.9% respectively. The service sector has now posted six consecutive years of employment growth, while the goods sector rebounded from an employment level decline in 2011. Within the service sector, five of the eight industry categories recorded gains in employment. The majority of the industry categories within the goods sector also reported higher levels of employment, with most of the increase coming in the manufacturing industry.
Foreign affiliate sales rise for second consecutive year
For the second year in a row, total current dollar sales of goods and services at foreign affiliates advanced. The 4.6% increase in 2012 brought sales back close to the peak reached in 2008.
Chart 2
Foreign affiliate sales
On a geographical basis, the European Union experienced the largest sales percentage increase, up 9.6%. Sales in the "other countries" grouping increased by 5.7%, while sales in the United States were up by 2.3%.
Sales in the service sector were up 13.0%, as six of the eight industries that make up the sector posted gains. In the goods producing sector sales retreated 0.8%, as weakness in the manufacturing industry was largely offset by growth in the other goods categories.
Note to readers
The strong growth in Canadian direct investment abroad, evidenced since the mid-1990s, has given rise to interest in understanding the activities of foreign affiliates of Canadian enterprises. This release provides some perspective on the employment and sales of foreign affiliates, including both industry and geographical detail.
To be consistent with the international practice for measuring the activities of foreign affiliates (also known as Foreign Affiliate Trade Statistics), only the information on majority-owned foreign affiliates are included. For operational reasons, depository institutions are currently excluded from the estimates. Sales and employment figures of majority-owned foreign affiliates represent total sales and employment, even if the Canadian ownership is less than 100%.
Employment is a volume measure that relates more closely to real economic activity. Sales approximate total gross income, and are subject to potentially large price effects. Current dollar sales reflect inflation in various countries as well as exchange rate effects, as they are converted to Canadian dollars (noon averages) for comparison purposes. Both employment and sales can be affected by changes in Canadian direct investment abroad, either through increased investment or divestment.
Over the coming months, Statistics Canada will be looking to expand the current measures of outward foreign affiliate statistics. This work is expected to lead to revisions to prior years data and, as a result, the agency will not publish revised data for back years with this current release in order to present consistent data and to minimize changes to the series going forward.
In the same time frame, Statistics Canada also plans to release provisional estimates of inward foreign affiliate statistics that will focus on the characteristics of Canadian companies that are under foreign control.
Contact information
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or Media Relations (613-951-4636; statcan.mediahotline-ligneinfomedias.statcan@canada.ca).
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