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IPS173 Alexandre Fortier-Labonté et al.

Characteristics of MNEs in Canada
Alexandre Fortier-Labonté, Claire Schaffter
Statistics Canada

Abstract
In 2016, less than one percent of enterprises in Canada were MNEs. Though
they were a small share of total enterprises, MNEs had a significant impact on
the Canadian economy. These enterprises employed one of four Canadians,
and owned 67% of total assets in the financial and non-financial sectors.

Keywords
Canada; Multinationals; Industrial Organization; Finance; Employment

1. Introduction
Globalization refers to the economic integration between countries as a
result of increasing cross-border trade and capital movements. Multinational
enterprises (MNEs) have been drivers of globalization. These enterprises have
taken advantage of innovations in logistics and communications technology
over the past four decades to diversify their supply chains and expand into
new markets. MNEs are also an important source of investment in innovation,
technology and skilled labor in Canada. The involvement of MNEs in these
aspects of the Canadian economy was discussed in a prior Statistics Canada
study.
This analytical study describes the characteristics of MNEs in Canada and
abroad, and how their activities in Canada differ from those of Canadian
domestic enterprises that do not control businesses outside the country.
The data for the study come from various sources, including Statistics Canada’s
2016 Annual Financial and Taxation Statistics (AFTS) program. The AFTS
collects and aggregates data from the financial statements of all enterprises
in Canada.

2. Methodology
An indicator that distinguishes MNEs from domestic enterprises in the
AFTS data is used in this study to compare size, industry involvement and
financial performance for both groups. The indicator was developed using two
different types of data. The 2016 country of control information from Statistics
Canada’s Corporations Returns Act program was used to identify foreign
majority-owned enterprises operating in Canada. Tax information from 2016
corporate tax and information returns was used to identify Canadian majority-

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