This presentation discusses Corporate Profits in Canada. The emphasis is on after tax profits as part of looking at both business and market performance. Profits are key area for business as it is after tax profits that both invested in a business and handed out as dividends to investors.

1. Paul Young, CPA, CGA | Paul Young | February 25, 2017
Canada Corporate Profits 4Q16

2.  Corporate Profit and Federal Taxation
 Corporate profits
 Equity Markets
 Key Quotes
 How were profits earned?
Agenda

3.  Source – TD Economics
TD Economics / Comment

4. Source – Government of Canada
Fiscal Monitor – Canada

5. Source – Stats Canada
Corporate Profits
Comments:
• 2015 seen many losses for oil and gas industry.
• Operating profit are tight
• Higher operating costs, i.e. hydro rates
• In ability to get price increases

6. Source - BMO
Weekly Market Outlook
All told, earnings growth is running about 5% above
year-ago levels, led by near double-digit gains in
technology and financials. In Canada, just over half
of the TSX has reported, and earnings growth is
running much hotter thanks to easy year-over-year
comparisons in energy and materials. The banks also
began rolling out their Q1 earnings this week with
results from Royal and CIBC—both topped
estimates and raised their dividends – Source - BMO

7. Quotes

8.  Stronger domestic and international demand for goods (USA Market)
 Low Canadian dollar meant that Canadian exports were cheaper to USA
 Low capital investment
 Companies put restriction on adding new capital as such lower their capital
cost allowance charges
 Hydro Rates
 Many companies have move production to other jurisdiction as part of
managing their hydro costs (Ontario)
 Keeping the lid on payroll costs
 Only 52,000 full-time jobs were created in 2016. Goods producing sector lost
5,000 jobs
 Wage increases overall were up 1.3% from 2015
How where profits earned by Corporate