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Canadian profitability lags U.S. (stock exchange statistics)
Even though the price/earnings ratios of publicly traded corporations in Canada are close to U.S. levels, Canadian companies are clearly not as profitable as their American counterparts. The average return on equity for TSE 300 companies has been consistently below the S&P 500's ROE over most of the past 25 years [ILLUSTRATION FOR CHART OMITTED].
The gap has widened considerably in the 1990s, with the TSE 300's ROE averaging 9.5% in the five years ended November 1997, compared to 20.1% for the S&P 500. That's partly explained by the severity of the 1991-92 recession in Canada and the sluggishness of our recovery since then. Even in 1989, however, there was a substantial …
