Corporate profits in Canada hit record level in 2019

Canadian corporate profits finished 2019 at an all-time high, according to the latest data from Statistics Canada.

StatsCan reported that operating profits rose by 3.6% in the fourth quarter, to $112.3 billion. This marked the third consecutive quarterly increase for corporate earnings.

The financial sector led the way, with profits jumping by 10.6% in Q4, to $37.2 billion.

Within the sector, the insurance business powered profits higher, while the banking segment saw its operating earnings decline by 2.5% due to lower non-interest revenue.

Credit union profits also jumped by 21.6% in the quarter, to $1.3 billion, StatsCan said.

In a research note, National Bank Financial Inc. (NBF) said that operating profits for non-financial corporations hit an all-time high of $297.6 billion in 2019.

While recent headlines about rail blockades and regulatory burdens focus on the challenges faced by corporate Canada, “business can still be profitable,” NBF said.

“The $4.7-billion advance from the prior year came courtesy of higher commodity prices which boosted mining (highest profits in eight years) and oil & gas (highest profits in five years),” it said.

Profit gains were also “decent” in services-producing industries such as transportation/warehousing, real estate/leasing, education/healthcare and arts/entertainment, it noted.

At the same time, NBF said that slower growth and the global trade war cut profits in cyclical sectors, such as construction and manufacturing.

StatsCan reported that operating profit in the manufacturing sector was down 2.7% in the fourth quarter, to $13.5 billion.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.