Canadian real estate profits have taken a nosedive like no other major industry in the country. Statistics Canada (Stat Can) data shows corporate profit margins in Q1 2024 were within historical ranges. A notable exception is real estate, which is now significantly below its usual range of profits—though they still remain higher than all but one industry.
Canadian Profit Margins Are Generally Within Historical Ranges
Canadian industries aren’t exactly hurting, but they’re far from record profits. Most sectors were within historical ranges from 2010 to the end of 2023. At the national level, the average profit before taxes for all industries came in at 10% in Q1 2024, down 2.5 points from the peak hit in Q4 2021.
“…profit margins across most sectors were back within their typical range since 2010 to start the year—an argument that suggests other factors like the global disruption in supply chains over the past few years and elevated energy prices were more proximate causes of above- target inflation,” explained Erik Johnson, a senior economist at BMO.
His breakdown of historical ranges shows a few outliers when it comes to profits, but not many.
Few Industries Are Seeing Historic Profits, But Many Are Close
Only two major industries have seen unusually large profit margins in the first quarter. Agriculture, Forestry, Fishing, and Hunting recorded a profit margin significantly higher than any historical range. This can certainly be a contributor to higher food prices, since Canada is a very large producer but its commodities are priced on global demand.
The only other industry to outperform is Recreation and Accommodations, arguably one of the hardest hit industries over the past few years.
Source: BMO Capital Markets; Statistics Canada.
Aside from those two, there are some industries performing at the higher end of profits. Retail, Wholesale, Construction, Non-Financial,
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