The third quarter marked a gradual resumption of economic activity across the country with Canadian corporations reporting a 44.9% increase in net income before taxes, an increase of $25.1 billion to $81.0 billion. Operating revenue rose 10.2 %, to $1,058.8 billion during the quarter.

Net income before taxes in the non-financial sector recovers
As health restrictions began lifting during the quarter, many non-financial sectors witnessed a resurgence of activity. Net income before taxes in the non-financial sector increased 64.0% (or $18.6 billion) to $47.6 billion, after declines in the previous quarter associated with COVID-19-related restrictions.

Manufacturing net income before taxes increases
Net income before taxes in the manufacturing industry led the overall increase for the non-financial industries, with net income before taxes increasing by 205.9% (or $7.9 billion) to reach $11.8 billion, buoyed by strong growth in several industries during the quarter.

Wood product and paper manufacturing recorded an increase in net income before taxes of 59.5% (or $859 million) to $2.3 billion, as revenues increased on higher prices. Higher prices were driven by limited supply and increased demand. On the supply side, mill curtailments and COVID-related restrictions limited the amount of available product. On the demand side, a rise in new housing starts coupled with increased renovation activity, fuelled higher demand in this industry.

Retail trade sector sales recover as stores begin to reopen
Net income before taxes in the retail trade sector increased (+126.4% or +$2.4 billion) to $4.3 billion. This increase came as public health restrictions were mostly lifted during the quarter, thus allowing traditional brick and mortar stores to gradually reopen and merchants to partially recoup sales lost in the previous quarter.

Motor vehicles and parts dealers led the increase in net income before taxes (+74.6% or +$1.7 billion) as car dealership sales rose for the quarter. Other retailers followed, with an increase (+31.9% or +$503 million) in net income before taxes.

Financial sector net income before taxes is up
Net income before taxes for financial corporations increased 24.3% (+$6.5 billion) to $33.4 billion in the third quarter, driven by gains in the banking and depository credit intermediation industry.

The banking and depository credit intermediation industry led the increase in net income before taxes for the financial industries, with a rise of 34.6% (or $2.1 billion) to $8.3 billion. Increased revenues and lower loan loss provisions—the previous quarter reflected the impact of the onset of COVID—contributed to the increase in net income in the banking and depository credit intermediation industry this quarter.

Source: Statistics Canada