Canadian corporate profits were up again in the fourth quarter of 2016, extending the second quarterly gain after the streak of falling profits during late 2015/early 2016. The fairly widespread gains in corporate profitability reinforce the solid economic picture that has developed for the final quarter of 2016.
Canadian corporations earned $86.8 billion in operating profits in the fourth quarter, up 3.6 percent from the previous quarter. The operating profits in the non-financial and the financial industries were both up by $1.5 billion. Overall, operating profits for Canadian corporations rose 13.2 percent compared with the fourth quarter of 2015.
The non-financial industries also saw widespread gains. Operating profits in the non-financial industries increased 2.6 percent from the third quarter to $58.7 billion in the fourth quarter on a $7.5 billion increase in operating revenues. 14 of the 17 major industries showed increased profitability in the fourth quarter. Operating profits for Canadian non-financial corporations increased 11.9 percent compared with the fourth quarter of 2015.
"Profit growth is likely to remain positive moving forward, reflecting a Canadian economy due to turn in a solid economic performance this year and next. While an uptick in U.S. growth should support Canadian output and thus profits, a thickening of the border, or an uncertainty-led slowdown in demand would weigh on corporate profitability." said TD Economics in a report.