Despite the burden of the third wave of Covid-19 infections, corporate profits held up in the second quarter, according to new data from Statistics Canada.
The national statistical agency reported that pre-tax profits for the second quarter came in at $105.5 billion, which was essentially unchanged from the previous quarter, but was more than double the $52.1 billion recorded in the same quarter last year.
This year, Canada was in the throes of the third wave of the pandemic during the second quarter, which resulted in widespread public health restrictions. Still, total quarterly operating revenues edged higher, as did sales and profits.
StatsCan noted that input costs rose by 6.1% on average in the quarter, led by soaring lumber prices.
The rise in producer prices resulted in a 2.0% decline in pre-tax profits for the non-financial sector in the quarter.
At the same time, life and health insurers saw their pre-tax profits rise by 15.0% in the second quarter, amid a “slight decrease” in life insurance claims and “favourable foreign exchange rates during the period.”
StatsCan noted that the property and casualty insurance industry saw increased claims in the second quarter, as a number of weather-related events resulted in crop damage.
“Moreover, dry conditions prompted wildfires which may negatively impact the earnings of property and casualty insurance carriers in the next quarter,” it said.