In this week’s EconMinute, we’re talking about multinational enterprises.
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Multinational enterprises (MNEs) are corporations with business operations in more than one country. Canadian MNEs are Canadian-controlled firms that own at least one foreign enterprise, and foreign MNEs are firms that operate in Canada and are controlled by a foreign enterprise.
MNEs are incredibly important to the Canadian economy and are an important source of investment in innovation, technology, and skilled labour. They also play critical roles in global value chains.
Despite only making up about 1% of all enterprises in Canada, Canadian and foreign MNEs contributed more than half (52.3%) of GDP in 2019 and represented over a third (36.1%) of all Canadian jobs.
MNE’s also play a large role in Canada’s international trade, particularly foreign MNEs. In 2019, foreign MNEs accounted for 61.4% of Canada’s export of goods.
Here’s what the data shows us about the importance of MNEs in Alberta:
- Together, Canadian and foreign MNEs generated 58% ($142.5 billion) of Alberta’s GDP in 2019, with a larger contribution from Canadian MNEs (37.4%) than foreign ones (20.6%).
- The industries with the largest GDP contribution from MNEs include: mining, quarrying, and oil and gas extraction at $55.3 billion; manufacturing at $18.0 billion; and construction at $11.8 billion.
- Canadian and foreign MNEs made roughly equal contributions to the number of jobs in Alberta—20% (344k) of all jobs in Alberta are supported by Canadian MNEs, and 17.4% (300k) are supported by foreign MNEs.
- The industries with the largest job contributions from MNEs include: retail with 115k jobs; manufacturing with 65k jobs; and construction with 52k jobs.
- 71.2% of Alberta’s goods exports come from foreign MNEs, primarily in the mining, quarrying, and oil and gas extraction industry.