Canadian real estate companies are making a smaller share of the real estate pie. The 2015 numbers were finally released under the Corporations Returns Act, showing a breakdown of foreign controlled interests in the Canadian economy. These numbers show increasing control by foreign companies in the categories of real estate, rental, and leasing.
Operating Revenues At Foreign Firms Were Over $14 Billion
Operating revenues for real estate related industries hit an all-time high for foreign and Canadian firms. Foreign firms saw $14.21 billion of revenue in 2015, a 34% increase from the year prior. US companies took the lion’s share of foreign revenue, capturing $11.5 billion of those dollars. To contrast, Canadian companies took in $86.78 billion in revenue.
This means Canadians are making the smallest cut of the real estate revenue pie that they have made in the last 14 years. Foreign companies captured 14.1% of total revenue. Canadians firms captured 85.6% of revenue. The last time it was this low was in 2001, when Canadian firms only captured 82.4% of total revenue. Foreign firms are gaining major ground.
Operating Profits At Foreign Firms Were Over $2.3 Billion
Foreign real estate firms are also gaining ground with their share of the profits. In 2015, $2.305 billion in profits were claimed by foreign firms. Of those, $1.9 billion were to US firms. To contrast, Canadian firms made $20.81 billion in profits.
These numbers show that Canadian firms are losing ground in terms of total profit share. Foreign firms captured 10% of all profits, leaving Canadian companies with the remaining 90%. This is the lowest number since 2011, when Canadian companies took in 89.3%.
The numbers aren’t all that bad for Canadian firms, but they do show that they’re increasingly losing ground to foreign firms – mostly American. Keep in mind these numbers are also from 2015 filings, which is before most people knew foreign companies were playing a stronger role in Canadian real estate. In my humble opinion, these numbers are likely to be much higher in the next round of numbers.
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