Annual wholesale trade, 2021

The operating revenue of Canadian wholesalers increased 20.0%, rising from $1.1 trillion in 2020 to $1.3 trillion in 2021. This increase was primarily due to the petroleum and petroleum products (+42.8%) and the building material and supplies (+30.7%) subsectors, which experienced substantial increases. The seven remaining subsectors saw revenues increase in 2021.

The cost of goods sold, which represents the cost of acquiring goods for resale, rose 21.2% to $1.1 trillion in 2021.

As a result, gross margins for wholesalers (the difference between total operating revenue and the cost of goods sold, expressed as a percentage of total operating revenue) decreased from 17.6% in 2020 to 16.8% in 2021.

Total operating expenses, which include labour remuneration, were up 10.9% to $149.9 billion. Total operating expenses increased in all subsectors.

Overall, the operating profits of wholesalers as a percentage of total operating revenue increased from 5.1% in 2020 to 5.2% in 2021.

Wholesale revenue driven up by petroleum and building supplies

The largest increase in operating revenue was observed in the petroleum and petroleum products subsector, up 42.8% to $329.1 billion in 2021, as the price of crude oil increased. According to the Industrial Product Price Index, prices for energy and petroleum products rose by 43.6%.

Wholesalers of petroleum and petroleum products accounted for the largest proportion (25.3%) of operating revenue in the wholesale trade sector in 2021, up from 21.3% in 2020.

The second largest increase in revenue was observed in the building material and supplies subsector, which was up 30.7% to $140.0 billion in 2021. All three industries that comprise this subsector showed increases. The lumber, millwork, hardware and other building supplies industry merchant wholesales showed the largest gain in dollar terms, increasing $18.8 billion from $56.5 billion in 2020 to $75.3 billion in 2021. In terms of percentage growth, the metal service centres industry increased 49.4% to reach $25.9 billion in 2021. All three industries were influenced by an increase in lumber, construction material and metals prices.

Excluding the petroleum and building supplies subsectors, operating revenue increased by 11.4% as the remaining subsectors posted increases. Among wholesale merchants, the third largest rise, in dollar terms, was reported in the machinery, equipment and supplies subsector, which posted a 12.1% increase to reach $187.7 billion in 2021.

Gross margins decrease

Expressed as a percentage of total operating revenue, wholesale gross margins decreased from 17.6% in 2020 to 16.8% in 2021. This was due in part to declining gross margins in the machinery, equipment and supplies subsector, which decreased 1.7%.

Gross margins varied widely among subsectors, depending on the cost structure of the different types of wholesalers. Among wholesale merchants, the highest gross margin was in the machinery, equipment and supplies subsector (25.1%), followed by the personal and household goods subsector (24.6%). In the petroleum and petroleum products subsector, gross margins decreased from 4.7% in 2020 to 4.6% in 2021.

Operating profits increase slightly

In 2021, five of the nine subsectors posted annual increases in their operating profits as a percentage of total operating revenue, while four decreased. Overall, operating profits went up slightly from 5.1% in 2020 to 5.2% in 2021.

Among wholesale merchants, building material and supplies wholesalers posted the largest increase in their operating profits, increasing from 5.5% in 2020 to 7.6% in 2021.

Wholesale revenue up across Canada

In 2021, all ten provinces and one territory reported higher wholesale operating revenue compared with 2020. Overall, operating revenue in Canada increased $216.6 billion to reach $1.3 trillion in 2021. Increases were led primarily by Ontario and Alberta, which saw their revenues increase by a combined $152.3 billion.

Overall, wholesale operating revenue in Ontario remained the highest among all the provinces, increasing 13.5% to $504.0 billion. The increases in Ontario, in dollar terms, were driven by the machinery, equipment and supplies subsector (+16.2%) and by the building material and supplies subsector (+28.8%).

In 2021, wholesalers in Alberta reported a 33.9% annual growth in operating revenue to reach $365.0 billion. The increase was mainly attributed to the petroleum and petroleum products subsector (+45.9%), which accounted for 72.9% of wholesalers' operating revenue in the province. Seven of the eight remaining wholesale subsectors in Alberta saw their revenue increase in 2021. The second-largest revenue increase in Alberta was found in the building material and supplies subsectors, which posted a rise of 22.5% to $16.2 billion.

Wholesalers in Quebec posted the third highest total operating revenue in 2021, at $188.2 billion, up from $163.1 billion in 2020. The increase was partly due to the building material and supplies subsector, which saw its revenues grow by 34.1% in 2021 to $28.4 billion. All eight remaining wholesale subsectors in Quebec saw their revenue go up in 2021. The second largest revenue rise was seen in the personal and household goods subsector which increased 14.0% in 2021 to $40.1 billion. This subsector comprises 21.3% of the total operating revenue in Quebec.

Impact of COVID-19 on wholesale trade

Businesses in the wholesale trade sector continued to be impacted by the COVID-19 pandemic in 2021. Among the various ways in which wholesalers were impacted by the pandemic, the most common responses were the adoption of a contactless business model and the adoption of work from home in 2020 and 2021.

In response to the economic impact of the pandemic, governments across Canada implemented various programs to provide financial relief to businesses. As in 2020, wholesalers continued receiving public financial relief via the Canada Emergency Wage Subsidy and the Temporary 10% Wage Subsidy programs.

The Daily