Section 1: 2009 Overview
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The dampening effect of the global financial crisis that started during the latter part of 2008 contributed to the decline in corporate operating profits in 2009. After increasing for six consecutive years, corporate operating profits declined to $237.4 billion in 2009, a decrease of $74.5 billion, or 23.9%, from the previous year.
Both the financial and non-financial industries registered significant declines. Operating profits for the non-financial industries for 2009 were $173.8 billion, down 24.1% from 2008, while those for the financial industries were $63.6 billion, down 23.2% from the previous year.
Net profit dropped to $169.3 billion, down 7.2% from 2008. After adjusting for timing and other differences as well as current and prior year tax losses, taxable income fell 2.1% to $180.3 billion. Corporate taxes likewise decreased to $51.6 billion, a decline of 2.2% over the previous year. The federal portion amounted to $32.2 billion, while the provinces claimed $19.4 billion.
Non-financial industries
Operating profits retreat in 2009
After steady growth since 2002, operating profits of the non-financial industries declined in 2009. Operating profits fell to $173.8 billion in 2009, a decrease of $55.3 billion over profits earned in 2008.
Energy-based industries engaged in oil and gas extraction and support activities as well as petroleum and coal products manufacturing accounted for 7.3% of the non-financial industries' total corporate operating profits in 2009, down from a share of 23.0% in 2008. Their combined 2009 operating profits were $12.6 billion, down 76.0% from the previous year.
The decline in corporate operating profits was widespread, with 38 out of 57 industries showing a downward trend. Other major contributors to the overall decline in operating profits of the non-financial industries were: primary metal manufacturing, mining, construction, utilities, agriculture, and building, material and supplies wholesaler-distributors.
Petroleum and coal products manufacturing slowed down significantly in 2009, registering operating profits of $3.1 billion, down from the $14.6 billion earned in 2008. Operating profits for the manufacturing sector were down by 35.5%. This was the second consecutive year of decline for manufacturing, with 2009 operating profits at $26.3 billion, down from $40.8 billion in 2008. Primary metal manufacturing and fabricated metal product and machinery manufacturing also posted significant declines in operating profits, down $4.2 and $1.0 billion respectively. Seven of the twenty-two manufacturing industries managed to post increases in operating profit. Notable among these industries were paper manufacturing (up $0.8 billion), computer and electronic product manufacturing (up $0.7 billion), and motor vehicle and trailer manufacturing (up $0.7 billion).
In the service sector, professional, scientific and technical services posted an increase in its operating profit in 2009 (up $1.3 billion).
Financial industries
Global financial conditions continue to slow down financial industries
Operating profits for the financial industries fell for a second year in a row. At $63.6 billion for 2009, operating profits were down 23.2% from the previous year.
Life, health and medical insurance carriers and enterprises involved in securities and commodity exchanges accounted for three quarters of the $19.2 billion overall decline in the financial industries. Bank profits in 2009 were at $25.7 billion, a decrease of 1.6% from 2008.
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