Canadian corporate profits were slaughtered in the first quarter of the year, according to a Statistics Canada report released this morning.

Corporate operating profits declined 6.9% to $44.9 billion in the first quarter, their lowest level since the third quarter of 1999. This follows a drop of 2.5% drop in the fourth quarter of 2000. Operating revenue slid 0.2% in the quarter, after 11 straight increases.

In total, 16 of the 24 industry groups reported lower operating profits in the quarter. Hardest hit was the funds industry, which pushed overall financial services profits down 18.4% in the quarter to a 10-quarter low of $11 billion.

Overall, the financial industries accounted for three-quarters of the total profit decline. Excluding the funds industry, the remaining financial industries posted a 5.1% decline in profits.

Operating profits of funds and other financial vehicles tumbled 36.7% to $3.6 billion in the first quarter from $5.6 billion in the fourth quarter. Quarterly profits had exceeded $8 billion in each of the first two quarters of 2000.

The decline in profits was largely due to reduced gains on the sale of securities and other assets, which totalled $600 million in the first quarter, compared with the $2.5 billion earned in the fourth quarter and $5.6 billion in the first quarter of 2000.

Depository credit intermediaries lost more ground in the quarter, as profits slipped to $3.8 billion from $4 billion in the fourth quarter and $4.1 billion in the third quarter of 2000. Chartered banks were the main contributor; their profits declined to $3.3 billion from $3.5 billion in the fourth quarter.