Statistics Canada's most current assessment suggests foreign acquisitions of Canadian small businesses is on the rise
On Monday, Statistics Canada released a report indicating Canadian assets under foreign control increased in 2007. The report suggests that while the assets of foreign-controlled companies are growing, these companies are not necessarily the most profitable.
Foreign acquisitions of Canadian-controlled firms in manufacturing, oil and gas drove the increase in the assets of foreign-controlled companies of 10.6 percent in 2007. On the other hand, Canadian assets under Canadian control rose by 9.9 percent. With these shifts, foreign-controlled firms accounted for 21.3 percent of assets in 2007 - an overall increase in the share from the year before.
In spite of this increase in control, the share of operating profits accounted for by foreign firms decreased in 2007. They provided only 26.2 percent of profits, as opposed to 27.2 percent the year before.
Additionally, foreign-controlled companies saw revenue shares decline in 2007 compared to previous years. The study shows they accounted for just 29.4 percent of national revenue, down from 30 percent in 2006.
While foreign-controlled businesses in Canada may not meet the level of profit shares of previous years, domestic small business owners might be well-advised to cater to foreign markets. According to a report from the HSBC Global and Small Business Confidence Monitor, 71 percent of Canadian SMEs that do business internationally say they are finding a boost in sales and revenue opportunities in the global market.
