Executive summary

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All industries

In 2007, enterprises operating in Canada held $6.4 trillion in assets, generated $3.2 trillion in operating revenues, and earned $302.4 billion in operating profits. The corresponding shares under foreign control were 21.3%, 29.4%, and 26.2%, respectively.

From 2006 to 2007, the share of assets under foreign control edged up 0.1 of a percentage point, owing to faster growth in assets under foreign control of 10.6% compared with 9.9% for assets under Canadian control. Meanwhile, Canadian-controlled firms led growth in operating revenues and profits, posting increases of 5.9% and 6.5% respectively, compared with increases of 3.2% and 1.0% for revenues and profits under foreign control. The result was a decrease in the revenue and profit shares under foreign control of 0.5 and 1.0 percentage points, respectively in 2007.

Large firms are defined as those with revenues greater than or equal to $75 million dollars. In 2007, there were three large firms under Canadian control for every two large firms that were under foreign control. However, large foreign-controlled firms generated, on average, 1.2 times more revenue than large Canadian-controlled firms.

Non-financial industries

Enterprises operating in the non-financial sector accounted for 49.2% of total assets, 89.4% of total revenues, and 69.5% of total profits in Canada in 2007. This translated into $3.1 trillion in assets, $2.8 trillion in revenues, and $210.0 billion in profits. Foreign-controlled firms in the non-financial sector accounted for shares of 27.1%, 30.4% and 28.3% in assets, revenues and profits, respectively.

In terms of growth, Canadian-controlled assets increased 7.8% to $2.3 trillion in 2007, nearly triple the $848.4 billion held under foreign control. However, foreign-controlled assets grew nearly twice as fast (12.9%), reflecting acquisitions of enterprises in manufacturing and in oil and gas formerly under Canadian control. Consequently, the share of foreign-controlled assets rose 0.9 of a percentage point in 2007. From 2006 to 2007, foreign-controlled firms earned $862.0 billion in operating revenues—less than half the $2.0 trillion generated by enterprises under Canadian control—and saw growth of 3.0% compared with 5.3% for Canadian-controlled firms. As a result, the share of revenues under foreign control decreased 0.5 of a percentage point in 2007. Finally, profits of domestic-controlled firms reached $150.7 billion, up 2.6% from the previous year. By contrast, profits under foreign control edged down 0.3% to $59.3 billion in 2007 following four consecutive years of growth.

Finance and insurance industries

Canadian-controlled firms continued to dominate the finance and insurance industries, accounting for 84.4% of assets, 78.4% of revenues, and 78.5% of profits, or $2.7 trillion worth of assets, $263.8 billion in revenues, and $72.5 billion in profits, compared with $505.8 billion in assets, $72.7 billion in revenues, and $19.9 billion in profits for foreign-controlled firms. These shares have remained relatively stable since 1999, reflecting regulations governing foreign control.

The growth rates for assets, revenues and profits of enterprises under domestic control in the finance and insurance industries were 11.7%, 10.6% and 15.8%, respectively—all higher than the foreign-controlled growth rates of 6.9% for assets, 4.9% for revenues and 5.3% for profits. Correspondingly, the shares under foreign-control declined, by 0.6, 0.9 and 1.7 percentage points for assets, revenues and profits, respectively.

U.S. control

Non-financial industries

In the non-financial industries, enterprises under U.S. control continued to dominate the economic activity of all foreign-controlled enterprises operating in Canada. U.S.-controlled firms accounted for 58.9% of assets, 60.1% of revenues and 54.0% of profits under foreign control in 2007.

Assets controlled in the U.S. increased 12.7% in 2007, led by gains in manufacturing, oil and gas and retail trade. Even so, the share of U.S.-controlled assets declined, by 0.1 of a percentage point. Revenues and profits under U.S. control rose more slowly than for assets (4.1% and 0.1%, respectively), however their corresponding shares increased by 0.6 and 0.2 of a percentage point, respectively.

Financial industries

In the finance and insurance industries, firms under U.S. control posted growth of 8.0% for assets, 7.1% for revenues, and 17.2.% for profits from 2006 to 2007, increasing their corresponding shares by 0.5, 1.0 and 5.6 percentage points, respectively. Consequently, enterprises under U.S. control accounted for 47.5% of assets, 49.9% of revenues, and 55.4% of profits under foreign control.

Specific industries

Manufacturing

In 2007, manufacturing assets under foreign control grew 16.4%, while those under Canadian control dipped 8.2%. Changes in revenues by country of control followed a similar pattern, with foreign-controlled revenue increasing 3.9% and domestic-controlled revenues slipping 5.6%. In terms of profits, both foreign-controlled and Canadian-controlled firms saw decreases of 1.9% and 4.6%, respectively.

The shares in assets, revenues and profits continued to be distributed almost equally between Canadian and foreign-controlled manufacturing enterprises, with firms under foreign control accounting for 52.8%, 53.8% and 51.4% of assets, revenues and profits, respectively, in 2007.

Oil and gas

Canadian-controlled firms continued to hold the bulk of assets, revenues and profits in the oil and gas industry, although they lost some share to foreign-controlled firms in 2007. Assets under foreign control grew 24.1% from 2006 to 2007—over double the 10.1% rate of increase for assets under domestic control. Consequently, the share of foreign-controlled assets rose from 35.7% in 2006 to 38.5% in 2007. At the same time, oil and gas revenues under foreign control grew 9.9%, compared with 8.5% for firms under Canadian control. Consequently, foreign-controlled firms increased their share in oil and gas revenues from 48.5% to 48.8%. Finally, oil and gas profits fell for both foreign-controlled and Canadian-controlled firms, by 7.6% and 20.4%, respectively, resulting in a share increase under foreign-control from 40.9% to 44.6%.

Real Estate

Firms in the real estate, rental and leasing industry posted significant gains in assets, revenues and profits, regardless of country of control. From 2006 to 2007, the assets, revenues and profits of Canadian-controlled firms grew 17.8%, 8.4% and 11.7%, respectively, compared with growth rates of 39.1%, 16.7% and 27.3% for firms under foreign control. Faster growth for foreign-controlled firms led to increases of 1.4, 0.7 and 1.1 percentage points in their shares of assets, revenues and profits respectively. However, Canadian-controlled firms continued to dominate the real estate industry, accounting for 89.8% of assets, 88.5% of revenues and 89.9% of profits.