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Just in time for Canada Day, the Globe and Mail's Report on Business issued its annual Top 1000 rankings of the thousand largest publicly traded companies (by assets) in Canada (ranked by profit). I blogged about this last year as well. It's such an interesting snapshot of Canadian business it's worth perusing.
Once again, this listing reveals the extent to which Canada's economic base is being steadily narrowed in the face of globalization and financialization.
Of the 50 largest corporations, fully 20 are resource producers (up from 17 of the top 50 last year). Ten are financial and life insurance companies (down from 12 last year; the losses sustained by some major life insurance companies pushed them well down the list this year). Another six are holding and property companies (which I consider broadly a form of finance: coupon-clipping, in essence), and three more are pipeline companies (tied at the hip to the energy industry). By that reckoning, 39 of the top 50 companies in Canada are either resource or financial firms. That's a precarious concentration of our national economic eggs in just a couple of baskets.
Rounding out the top 50 are three telephone companies, three retailers, two railways, and all of three manufacturing firms (RIM, Bombardier, and Magna), down from four last year. (With RIM in free fall, next year there will be just two manufacturers on the list.)
This is a dramatic statement of the general failure of the Canadian business class to build a diversified, productive, innovative foothold for our country in the global economy. If it doesn't involve digging stuff out of the ground, or creating and manipulating paper assets, then Canada pretty much isn't in the game.
Brian Milner noted in his RoB commentary that over half of the total profits of all 1000 of the firms listed came from resource and financial firms. The two sectors account for an equally dominant share of stock market capitalization, too. As Milner warned, while investors are no doubt happy with the strong profits that have been generated by both sectors, "their throngs of admirers have to be wondering how long they can keep pulling fat rabbits out of their respective hats." When that stops happening, the whole country will be left grasping at economic straws.
Jim Stanford is an economist with CAW. This article was first posted on The Progressive Economics Forum.
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