Foreign control in the Canadian economy, 2012
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Released: 2014-12-09
In 2012, the value of assets, revenues and profits in the Canadian economy all increased over the previous year. The shares of foreign-controlled assets and profits declined from 2011, while the share of revenues under foreign control increased slightly over the previous year.
Canadian-controlled asset values increased 6.2% in 2012, compared with a 3.2% gain for foreign-controlled assets. Foreign-controlled enterprises accounted for 18.4% of assets in 2012, down from 18.9% in 2011.
Revenues of Canadian-controlled enterprises rose 3.0% compared with a 5.0% increase for those under foreign control. As a result, the share of revenue under foreign control edged up from 29.0% in 2011 to 29.4% in 2012.
Operating profits for Canadian-controlled enterprises grew 4.7% in 2012, while those under foreign control fell 8.9%. Consequently, the share of profits under foreign control decreased from 22.9% to 20.6%. This decline was mostly attributable to the non-financial sector.
Non-financial industries
Among non-financial industries, the share of assets under foreign control edged down to 26.5%, while the proportion of revenues under foreign control rose to 30.6%. The share of foreign-controlled profits declined from 25.6% to 23.4%.
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 49.7% in 2012, down from 50.3% in 2011.
The value of assets for Canadian-controlled manufacturers rose 3.2%, compared with a gain of 0.6% for those under foreign control.
The share of foreign-controlled manufacturing revenue grew from 47.2% to 48.7%, as Canadian-controlled manufacturers reported slower revenue growth in 2012 than their foreign-controlled counterparts.
In 2012, profits of Canadian-controlled manufacturers decreased by 15.9% and those of manufacturers under foreign-control fell by 3.7%. As a result, the share of manufacturing profits under foreign control rose from 42.5% to 45.8%. 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 30.7% in 2012. This occurred as profits for foreign enterprises decreased at a quicker rate than they did for enterprises under Canadian control.
Finance and insurance industries
In the finance and insurance industries, foreign-controlled enterprises accounted for 11.9% of assets in 2012, down from 12.5% the previous year. Foreign enterprises held 17.7% of revenues, down from 18.3% in 2011, and 13.8% of operating profits, down from 15.8%.
Canadian-controlled assets among enterprises operating in the financial sector increased 6.1% in 2012, compared with a 0.3% gain for enterprises under foreign control.
Canadian-controlled enterprise revenues were up 1.2% in 2012, compared with a 3.1% decline in revenues of foreign-controlled enterprises.
Financial sector operating profits for Canadian-controlled enterprises increased by 13.7% in 2012, while foreign-controlled profits decreased by 3.6%.
Foreign control by country
American-controlled enterprises continued to dominate the shares of assets, revenues and profits under foreign control.
American enterprises controlled 49.1% of all foreign assets and 53.8% of all foreign operating revenues in 2012, both down from the previous year. However, the US-controlled share of foreign profits edged up to 58.4% in 2012.
Enterprises controlled from the United Kingdom reported slight decreases in asset, revenue and profit shares, at 13.2%, 8.0% and 7.7%, respectively. Over two-thirds of assets under United Kingdom control (68.9%) were in the financial sector compared with 31.1% in the non-financial sector.
Dutch-controlled enterprises represented the third-largest share of foreign-controlled assets in 2012 at 5.7%. Their distribution was opposite that of the United Kingdom, with 32.3% of assets under Dutch control in the financial sector and 67.7% in the non-financial sector.
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 2012.
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. Revenue tends 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, 2012 (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 Claude Vaillancourt (613-951-0807; claude.p.vaillancourt@statcan.gc.ca), Industrial Organization and Finance Division.
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