Tariff pressure hammers auto and lumber sectors even as oil, gold, and copper push overall earnings higher
Canadian corporations posted $209.9 billion in operating profit during the first quarter of 2026, a $4.1 billion gain from the prior quarter, according to data released by Statistics Canada.
The 2.0% quarterly increase (a 3.4% jump compared to the same period a year ago) was led in part by financial industries navigating a mixed quarter of investment gains and insurance headwinds, even as commodity-linked sectors dominated the headline numbers.
Financial industries collectively added $761 million in the quarter, bringing total operating profit to $99.7 billion, a 0.8% rise. But the aggregate figure obscures significant variation across the sector's 13 industries, with only five posting quarterly gains.
The standout performer was the securities and commodity exchanges, portfolio management, and miscellaneous financial investment activity industry, which saw operating profit climb $1.1 billion, an 11.6% jump on higher operating revenue.
As equity and commodity markets absorbed geopolitical shocks including supply disruptions following the closure of the Strait of Hormuz in March, trading and investment activity generated meaningful upside for firms in that segment.
The miscellaneous intermediation industry, which comprises establishments primarily engaged in the buying or selling of financial contracts, recorded an increase in operating profit of $772 million, a 3.2% gain driven by $578 million in additional operating revenue and lower overall expenses.
Insurance carriers offset much of those gains. Life, health, and medical insurance carriers saw operating profit fall $449 million, a 12.6% decline, hit by a combination of lower insurance revenues and higher actuarial liability expenses. Property and casualty insurers fared little better, posting a $440 million drop — down 8.4% — as total insurance revenues slipped 3.6%, reducing net income from core insurance operations.
Commodity surge drives non-financial gains
Non-financial industries contributed the bulk of the quarterly improvement, adding $3.3 billion to reach $110.2 billion in operating profit, with gains recorded across 21 of 39 industries.
Oil and gas extraction was the largest single contributor, up $3.0 billion or 34.8%, driven by the crude oil price spike tied to Strait of Hormuz supply disruptions. Petroleum and coal product manufacturing added $1.2 billion (also a 34.6% increase) pushing sector operating profit to $4.6 billion, its highest since the second quarter of 2024. Mining and quarrying, excluding oil and gas, rose $299 million on strong demand for gold and copper.
Manufacturing industries posted a $347 million decline in operating profit, falling to $19.7 billion as nine of 14 sub-industries reported losses. Excluding petroleum and coal, the sector's operating profit fell $1.5 billion, a 9.1% drop.
Motor vehicle and trailer manufacturing was the hardest hit, swinging to a $921 million operating loss after a $750 million decline in the quarter, as reduced sales and scaled-back production at several major assembly plants weighed on results. Wood product and paper manufacturing fell $334 million — a 22.7% quarterly drop and the steepest decline since mid-2023 — with U.S. tariffs introduced since the third quarter of 2025 cited as a direct contributor to weakened production and export volumes.
Statistics Canada noted that beginning with the second quarter of 2025, its quarterly enterprise statistics shifted to reporting operating profits rather than net income before taxes, a methodological change designed to better isolate earnings from core business operations. The next release, covering the second quarter of 2026, is scheduled for August 24.
