CIBC releases latest economic insights

The report also found that the aggregate profit margin of non-financial corporations in Canada hovered at almost 9% in 2022 while earnings margins in the TSX was at 12% on average since the pandemic.

“Since we live in Canada, its aways worth checking whether that observation is valid when we exclude the energy sector and adjust for inflation,” said CIBC Economists Benjamin Tal and Ali Jaffery in the report.

“Real profits excluding the energy sector have shown less of a pronounced post-pandemic, but continue to maintain a very high level,” they said further.

The report further found that the profit as a share of GDP rose from 5% in the 1990s to the 15% seen currently as cyclically adjusted margins were showing the same trajectory.

“Another possible factor here is a structural change in the composition of corporate Canada with high margin sectors seeing their share in the economy rising,” said the economists, further noting that many service sectors saw an increase in their aggregate profit margins with the share of the economy of higher-margin industries rising over the past two decades.

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