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Activities of foreign majority-owned affiliates in Canada, 2013

Released: 2015-12-02

Foreign majority-owned affiliates in Canada accounted for over half of total international trade in goods and commercial services (exports plus imports), and represented nearly one in eight jobs in Canada in 2013. A large proportion of this activity was controlled by US corporations.

Overall, foreign majority-owned firms owned $2.0 trillion of assets and generated $1.0 trillion in operating revenue in Canada in 2012, the most recent year for which this information is available.

Activities of foreign majority-owned affiliates operating in Canada largely controlled by the United States

The financial performance, employment and international trade activities of foreign majority-owned affiliates in Canada are under the ultimate control of multiple countries, mainly the United States.

Based on the ultimate investing country, defined as the country where the final control resides, the United States accounted for over half of all foreign-controlled assets and revenues in Canada in 2012, and nearly two-thirds of foreign-controlled employment in 2013. It also accounted for 51% of total foreign-controlled trade in goods and commercial services in 2013. The United Kingdom ranked second but with a much smaller share of foreign-controlled assets (12%), employment (7%) and total international trade (10%).

The geography can also be expressed based on the immediate investing country as opposed to the ultimate investing country. The country of the immediate investor refers to the first foreign country where inter-company claims are registered. For foreign ownership of assets on an immediate country basis, the United States, the United Kingdom and Luxembourg were among the largest countries in 2012. However, for Luxembourg, two-thirds of its assets were ultimately controlled by other countries. A similar pattern was observed for Australia, Bermuda and the Cayman Islands, as their share of assets in Canada is significantly larger when measured on the immediate ownership basis than on an ultimate basis.

On the other hand, countries such as the United States, the United Kingdom, Japan, Switzerland and China showed higher values of assets on an ultimate basis than on an immediate basis. On an immediate basis, the United States' share of total assets was 48% compared with 53% on an ultimate basis. This illustrates the extent to which investments originating from these countries are channelled through other countries before entering the Canadian economy.

Chart 1  Chart 1: Assets of foreign majority-owned affiliates in Canada, by immediate and ultimate investing country, 2012
Assets of foreign majority-owned affiliates in Canada, by immediate and ultimate investing country, 2012

Employment in foreign majority-owned affiliates in Canada concentrated in the manufacturing sector

Overall, foreign majority-owned firms accounted for 1.9 million jobs in 2013. This represented nearly one in eight jobs in Canada. For the manufacturing sector alone, these firms contributed 500,000 jobs or one-third of the total employment in the sector. The combined wholesale and retail trade sectors contributed 600,000 jobs, accounting for 22% of the total sectoral employment.

Of the $1.0 trillion in revenues generated by foreign majority-owned Canadian firms in 2012, 37% was in the manufacturing sector. The combined wholesale and retail trade sectors were next with a share of 33%. The finance and insurance sector accounted for a relatively small proportion, representing 6% of foreign-controlled revenues. However, this sector had a more significant share of operating profits under foreign control at 19%.

Foreign majority-owned firms responsible for half of Canada's goods exports

For international merchandise trade, foreign-controlled firms exported $222.6 billion, while importing $274.4 billion in 2013. This represented half of all Canada's goods exports and 58% of all goods imports. Foreign-owned firms were also important in the context of Canada's international trade in commercial services. Their share of exports was 41% in 2013, while they accounted for 54% of imports. In the case of imports of commercial services, this share was up from 46% in 2010.

Chart 2  Chart 2: International trade in goods and commercial services of foreign majority-owned affiliates in Canada, 2013
International trade in goods and commercial services of foreign majority-owned affiliates in Canada, 2013



  Note to readers

Foreign majority-owned Canadian affiliates (FMOCAs) were identified using data on foreign direct investment in Canada and are defined as Canadian entities where a foreign direct investor owns more than 50% of the voting shares. Users should note that FMOCAs do include firms that are also engaged in Canadian direct investment abroad. Statistics Canada plans to sub-stratify FMOCAs in future releases of foreign direct investment and foreign affiliate statistics.

For the geographical dimension, two bases are used to present the ownership of foreign majority-owned firms: the country of the immediate investor, and the country of the ultimate investor. The immediate investing country shows the first foreign country of inter-company claims. The ultimate investing country indicates the economy from which the investment ultimately originates and where the control resides through layers of inter-corporate ownerships.

Because of the data availability of various source programs at the time of this release, data on the firm's financial performance are only available for reference years 2010 to 2012. Data for 2013 will be available in 2016. Data on goods imports, commercial services imports and exports, and employment are available for reference years 2010 to 2013. Data on goods exports are available for the 2013 reference year only.

Please refer to the following CANSIM tables for the Canadian economy totals: goods imports and domestic goods exports (228-0060), commercial services imports and exports (376-0033) and employment (281-0024).

Contact information

For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca).

To enquire about the concepts, methods and data quality of this release, contact Angela Yuan-Wu (613-240-2871; angela.yuanwu@canada.ca) or Lili Mei (613-864-0170; lili.mei@canada.ca), International Accounts and Trade Division.

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