AUS
NZ
UK
CA
USA
IND
Summary
- Canadian businesses saw a quarterly increase C$ 25.1 billion in net income before taxes in the third quarter of 2020.
- Despite the increased net income, the industries related to extraction and support services in the fossil fuel sector incurred a loss of C$ 6.5 billion in Q3 2020.
- The recent StatCan report found that Canada’s banking and depository credit intermediation industry’s Q3 2020 net income grew due to low loan loss provisions and higher revenues.
After a length of tumultuous times triggered by the coronavirus pandemic, the third quarter (Q3) of 2020 saw a gradual recovery of economic activity in Canada, reported the Statistics Canada on Friday, November 20.
Canadian businesses posted a growth of nearly 45 per cent quarter-over-quarter (QoQ) in net income before taxes in Q3 2020, said the report. This increase amounted to a total of C$ 81 billion, up C$ 25.1 billion QoQ. Operating revenue for corporations jumped by 10.2 per cent in the latest quarter, leading to a total of C$ 1,058.8 billion.
How Did Different Sectors Fared?
NON-FINANCIAL SECTOR
Minus taxes, the non-financial sector in the country saw a rise of 64 per cent in their net income of C$ 47.6 billion.
The manufacturing industry, with a spike of a whopping 205.9 per cent that amounted to C$ 11.8 billion, drove the total increase in the non-financial sector’s net income for the third quarter of 2020.
The motor vehicles and parts industry, meanwhile, recorded the highest export level since Q3 2019, as per the Canadian International Merchandise Trade.
The wood product and paper manufacturing industry’s net income before taxes jumped over 59 per cent to C$ 2.3 billion, led by the increased prices of products amid the pandemic.
The industry related to extraction and support services in the fossil fuel sector rose by C$ 4.5 billion in the third quarter, also driven by heightened prices.
However, despite the increased net income, the industry incurred a loss of C$ 6.5 billion in Q3 2020, reported StatCan.
The industry related to mining and quarrying recorded a total of C$ 1.8 billion in net income in the third quarter, up C$ 2.1 billion.
RETAIL TRADE SECTOR
Canada’s retail trade sector in Q3 registered a jump of 126.4 per cent in its net income of C$ 4.3 billion as most lockdown restrictions across the country were phased out.
Businesses dealing with motor vehicles and parts drove this growth primarily, with rise in car dealership sales, and posted a net income gain of 74.6 per cent in the quarter.
Having suffered massive setbacks due to the lockdown initiated around March 2020, businesses related to arts, entertainment and recreation have begun to rebound, said Statistics Canada. Clubbed with the accommodation and food services industry, their net income stood at C$ 157 million in the latest quarter, up 110.3 per cent.
FINANCIAL SECTOR
Canada’s banking and depository credit intermediation industry posted significant gains during the latest quarter, due to which the financial sector recorded a growth of 24.3 per cent in its net income of C$ 33.4 billion in Q3 2020.
The financial sector took a quite due to the COVID-19 outbreak as deferred loan payments and lowered interest rates gave way to massive provisions for credit losses. But the StatCan report found that the banking and depository credit intermediation industry’s Q3 2020 net income was up 34.6 per cent, driven mostly by low loan loss provisions and higher revenues.
