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Advancements in technology and changing market conditions have led to greater internationalization of the corporate world. Canada’s growing and competitive economy, with its natural resources, skilled labour force and high quality of life, offers attractive investment opportunities to business leaders abroad. Foreign firms gain access to the Canadian economy in primarily three ways—by establishing branches or new business, through direct investment in Canadian corporations or through mergers and acquisitions of Canadian firms. More than ever, information on the trans-national aspects of the economy is important to understanding this new economic era. That is the purpose of this report.
The Corporations Returns Act (CRA) is a key instrument for measuring foreign control. The CRA is administered by Statistics Canada under the authority of the Minister of Industry. The purpose of the Act is to collect financial and ownership information on corporations conducting business in Canada, and to use this information to evaluate the extent and effect of non-resident control in the Canadian economy.
According to the Act, corporations under common control conducting business in Canada whose combined assets for the reporting period exceed $10 million, or whose combined gross revenue from business conducted in Canada exceeds $15 million, are required to provide financial and ownership information to Statistics Canada. Individual corporations under these limits, but having long-term debt or equity owing directly or indirectly to non-residents over a book value of $200,000 are also required to provide this information.
Financial statistics used in this report are compiled on the basis of the 2007 version of the North American Industry Classification System (NAICS). The NAICS was developed by the statistical agencies of Canada, Mexico and the United States to provide a consistent framework for the collection, analysis and dissemination of industrial statistics across the three countries.
In addition, the CRA program has recently undergone a conceptual review which has resulted in changes to the method used to assign country of control. The data in this publication are tabulated under the new method (see Key concepts in the Concepts and indicators section of the publication).
The Corporations Returns Act requires that an annual report be submitted to Parliament summarizing the extent to which foreign control is prevalent in Canada. This is the report for reference year 2006.
Jean Leduc
Director, Industrial Organization and Finance Division
