Q3 2015 sees corporate Canada back in red

Canada's corporate profits declined to -5.4% qoq, to be back in red in third quarter of this year, after seeing a rebound in Q2, which was not lasting. In last four quarters, in three of them, the profits dropped, which left them 10% lower than that of an year ago.

Canada's economic growth seems to be returned back in third quarter in real terms, but there is struggle seen in the corporate Canada. Commodity prices are related to most of this, which saw a 14% decline in Q3, pressurizing the resource sector revenues.

The continued drag in business investment spending is likely manifested by weak profit backdrop. This is likely to be weakness for the economy over coming quarters.

"We do expect a gradual improvement in the overall economy in the coming quarters, with this trend helping improve the corporate profit environment. Profits should also get a boost once the big declines in commodity prices are behind us - something we foresee as a near-term scenario", says TD Economics in a research note.