In the first quarter of this year, Canadian companies recorded a 1.9% increase in net income before taxes

May 26, 2022

The first quarter of 2022 began with several events that affected the performance of the Canadian corporate sector. Blockades of the Ambassador Bridge crossing in Windsor, and geopolitical tensions in Ukraine prompted worries of supply chain disruptions and increases in prices.

Amid this backdrop, Canadian corporations reported a quarterly increase of 1.9% in net income before taxes (NIBT) during the first quarter of the year.

The financial sector led the increase, reporting a rise of 7.6% in NIBT during the first quarter of the year. In early March, the Bank of Canada raised its prime lending rate by 25 basis points. NIBT for the non-financial sector decreased 0.4%.

During the first quarter of 2022, advanced economies of the G7 saw inflation continue to rise, reaching an average of 6.4%. Over the same period, Canada saw an average inflation rate of 5.8%. These global pressures contributed to the Bank of Canada increasing the policy rate by 25 basis points during the first quarter, and signalled more increases to come.

Credit intermediation, including chartered banks, saw an increase in non-interest income, which drove revenue growth during the quarter. This was partially offset by increased provisions for credit losses. The banking and credit intermediation industry saw an increase of 7.6% in NIBT.

Source: Statistics Canada
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