Foreign control in the Canadian economy is shrinking: StatCan

Foreign control in the Canadian economy has been steadily declining over the last decade, government data shows.

According to a Statistics Canada report published Monday, the share of assets owned by foreign-controlled enterprises in Canada dropped 0.2 percentage points between 2020 and 2021, from 15.1 per cent to 14.9 per cent.

That amounts to $2.4 trillion out of a combined $15.9 trillion controlled by both Canada-based and foreign-based entities, the report stated.

The change is a result of Canadian-controlled assets growing faster than foreign-controlled assets.

Eight countries account for about 90 per cent of foreign-controlled assets in Canada, with enterprises controlled from the United States accounting for the largest share (52.3 per cent).

Entities based in Europe account for about 30 per cent of foreign-controlled assets, led by the United Kingdom.

Meanwhile, enterprises in Asia accounted for just under 15 per cent of all foreign-controlled assets in the country in 2021, with companies or persons in Japan and China controlling seven per cent and less than four per cent, respectively.

The StatCan report distinguishes between assets in the finance and insurance industries and the non-financial sector.

The share of foreign-controlled assets in the financial sector “maintained its steady downward trend and was at a 12-year low of 8.7 per cent in 2021,” the report states, while the percentage of foreign-based companies in the non-financial sector held steady at 23.5 per cent.

The report also shows foreign ownership in the non-finance sector is concentrated in wholesale trade (referring to businesses that deliver goods from producers to consumers), which accounts for 48.2 per cent of all assets in that industry.

The manufacturing sector has the next highest level of foreign-controlled assets at 44.3 per cent, followed by the oil and gas sector at 40 per cent and then Canada’s mining industry at 30 per cent.

In the finance sector, foreign-based entities continue to concentrate on credit and debt lending.

“Enterprises in these highly regulated industries are predominantly Canadian-controlled, resulting in foreign-controlled assets representing less than a tenth of the total,” the report states.

Companies based in the U.S. control about 43 per cent of assets in the financial sector, followed by the United Kingdom and Japan with about 21 per cent and 13 per cent, respectively.