Canadian Corporate Profits Remain Elevated Despite Economic Slowdown
Statistics Canada has released year-end data on corporate financial performance for 2023. The new data confirm that corporate profits remain elevated relative to pre-COVID norms, despite the stalling of economic growth in 2023, largely due to weak consumer demand conditions caused by two years of high interest rates. After-tax corporate profits across the financial and non-financial sectors of the economy totaled $577 billion for the year. That was down just 3% from all-time record profits booked by corporate Canada in 2022 – the same year inflation peaked at over 8%. The moderation in profits (both in absolute dollars and as a share of GDP) last year contributed to the rapid easing of inflationary pressures. But profits remain unusually high compared to pre-pandemic years: in absolute dollars, as a share of total business revenue, and relative to GDP. This indicates that corporations are continuing to profit from supply chain disruptions, high energy prices, and other pandemic after-shocks. These excess profits remain a key factor in the stubborn inflation which continues to roil Canada’s macroeconomy.
Please read the full 8-page analysis by Jim Stanford, Director of the Centre for Future Work.
Jim Stanford
Jim Stanford is Economist and Director of the Centre for Future Work. He divides his time between Sydney, Australia and Vancouver, Canada. Jim is one of Canada’s best-known economic commentators. He served for over 20 years as Economist and Director of Policy with Unifor, Canada’s largest private-sector trade union.