Business performance and ownership
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Canadian corporations spent most of 2009 recovering from the sharp downturn experienced at the end of 2008.
In 2009, their operating profits fell 25.3% to $212.8 billion. This was the first annual drop since 2001, when operating profits fell to a low of $143.1 billion. However, profits recovered during the second half of 2009 and rose 11.7% in the fourth quarter to $60.1 billion, the highest quarterly total reported since the economic downturn.
Annual declines were spread across industries, with 13 of 22 industries reporting lower profits at the end of 2009. Profits for non-financial industries decreased 25.4% to $157.8 billion in 2009, while those for financial industries fell 25.0% to $55.1 billion.
Manufacturers experienced significant losses during the economic downturn. In 2009, manufacturers reported operating profits of $29.9 billion, a decline of 31.7% from 2008.
Despite losses, manufacturers started to recover earlier than other industries, and by the end of 2009 had experienced three consecutive quarters of increased profits. Profits reached $9.2 billion in the fourth quarter, an increase of 3.9% over the previous quarter.
Manufacturers of chemicals, plastics and rubber; wood and paper; and primary metals all reported higher fourth quarter profits and were top contributors to the recovery. However, manufacturers of motor vehicles and parts saw their profits decline $583 million, which affected overall gains in this industry.
Operating profits in the wholesale sector grew 2.9% in 2009 to $18.0 billion. The increase was driven by strong gains in the first, third and fourth quarters, when profits increased by 6.5%, 15.0% and 5.8% respectively. Profits in the retail sector totalled $14.3 billion in 2009, a drop of 4.9% from 2008, and the first annual decrease in operating profits since 2001.
Oil and gas profits
In 2009, profits for oil and gas extraction and support industries fell 75.4% to $9.5 billion, well below the peak of $38.9 billion reported in 2008. This was the largest decrease in operating profits among all financial and non-financial industries in 2009 and marked the greatest total decline in the oil and gas extraction and support category in over a decade.
Operating profits represent profits before tax, while net profits represent the after-tax profits earned by corporations.
Although taxable income rose 2.7% in 2008 to $177.2 billion, corporate taxes payable fell by $1.3 billion to $52.1 billion. The federal portion of this was $34.1 billion, while the provinces collected $18.0 billion.
Non-financial industries paid 1.7% more in taxes in 2008 than in 2007, with $42.5 billion in taxes payable. The taxes paid by oil and gas extraction businesses increased by $0.8 billion, while taxes for motor vehicle manufacturers were down $0.6 billion.
Finance and insurance industries saw their corporate taxes payable fall 17.2% to $9.6 billion. Taxes paid by banking and other depository credit intermediation industries accounted for half of this decline.
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