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25 March 2024

The Most Profitable Businesses In Canada For 2024: Top 10 List With Examples

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Sobirovs Law Firm

Contributor

Toronto-based boutique Sobirovs Law Firm assists corporate and tech-sector clients, foreign businesses, entrepreneurs and investors, with Canadian immigration matters. The firm specializes in labour market impact assessments, permanent residence applications, TechImmigration, and treaty-based immigration.
This is a detailed exploration of the top 10 most profitable businesses in Canada. This guide highlights the sectors' financial successes and delves into the dynamics...
Canada Corporate/Commercial Law
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This is a detailed exploration of the top 10 most profitable businesses in Canada. This guide highlights the sectors' financial successes and delves into the dynamics that drive their growth. For those eyeing the Canadian market, understanding these industries is crucial for making informed decisions and capitalizing on Canada's myriad opportunities. Canada's diverse industries, from healthcare to renewable energy, showcase its adaptability and forward-thinking approach, providing ample opportunities for foreign entrepreneurs, business owners, and investors in 2024.

What is the Most Profitable Business in Canada in 2024?

Please note that this list only covers the top 10 sectors by profit, and there are many other business opportunities in Canada that have very attractive profitability. Also, there are other rankings that cover overall sector revenue, the number of businesses in the sector, the volume of exports, etc. If you want to discuss the sectors below and other sectors, please consider booking a meeting with our team.

The most profitable business in Canada is Primary Care Doctors. On average, this industry has a profit margin of 41.9%! The industry reported over $17,6B in profits in the previous year. However, a relatively close second is the Colleges & Universities industry, which usually has a profit of 22.7%.

Industry

Total Profit for 2024

$17.6B

$10.6B

$6.4B

$5.5B

$5.4B

$4.4B

$4.3B

$3.2B

$2.8B

$2.6B


Top 10 Most Profitable Businesses in Canada

Below, you will find 10 most successful types of business in Canada for 2024:

1 – Primary Care Doctors

Shifting demographic patterns fuel an increased demand for extensive primary care services across Canada. The growing medical requirements of an aging populace are boosting the sector's consumption of healthcare services. Moreover, primary care doctors are crucial in guiding this group through intricate health conditions and facilitating specialist consultations.

Additionally, a notable rise in Canada's population, driven by a boost in immigration and the influx of temporary residents, has further heightened the demand for primary care services. However, the pandemic momentarily halted the upward spending trajectory in this domain, thrusting healthcare providers into novel financial and operational challenges. The adoption of telehealth technologies provided a lifeline, enabling continuous patient care, while governmental financial support helped offset the decline in patient numbers by covering wages.

Despite easing pandemic-related worries, the emergence of inflation and workforce shortages poses fresh hurdles. Over the last five years, the industry's revenue has experienced a slight decline, with a Compound Annual Growth Rate (CAGR) of -0.3%, reaching $42.1 billion, though it is anticipated to grow 2.2% in 2024.

  • Profit of the sector for 2024: $17.6B
  • Profit Margin: 41.9%
  • Barriers to Entry: Moderate

2 – Colleges & Universities

Over the last half-decade, the primary financial support for Canadian colleges and universities has undergone significant changes. Funds from provincial governments, once the largest source of income for these institutions, have seen minimal growth and notable reductions in certain areas, leading to an increased dependence on tuition fees. The surge in international student enrollment has been a financial boon, although the COVID-19 pandemic resulted in many such students leaving Canada. The volatility of investments, endowments, and donations, exacerbated by the pandemic's impact on financial markets, has affected these smaller revenue streams.

Integrating online learning with traditional classroom instruction has generated considerable profits, with surplus funds reinvested into higher education. Despite this, the industry's revenue has decreased at a Compound Annual Growth Rate (CAGR) of 1.5% over the past five years, with an anticipated increase of 1.9% in 2024.

  • Profit of the sector in 2024: $10.6B
  • Profit Margin: 22.7%
  • Barriers to Entry: High
  • Top Companies:

3 – Renewable Power

Over the preceding five years, renewable energy producers have witnessed slight growth. The sector has faced instability due to oscillating energy prices. However, technological advancements have lessened depreciation and labor expenses, alleviating some financial burdens on profits. Yet, the benefits of these reduced operational costs have been counterbalanced by significant purchasing and research and development expenditures, maintaining a consistent profit margin.

In sum, the revenue for the renewable power industry has maintained a Compound Annual Growth Rate (CAGR) of 0.0% across the last five years, culminating in an anticipated total of $38.7 billion in 2024. This includes a projected increase of 1.1% for 2024.

  • Profit of the sector in 2024: $6.4B
  • Profit Margin: 16.7%
  • Barriers to Entry: High
  • Top Companies:

4 – Heavy Engineering Construction

By the close of 2024, contractors in the heavy engineering construction sector will have reaped the benefits of the federal government's dedicated efforts to bridge the infrastructure divide in Canada. The Investing in Canada Plan, a strategic 12-year initiative with a budget of $180 billion aimed at enhancing local and regional infrastructure, has significantly propelled sector growth.

The COVID-19 pandemic initially caused a slowdown in activities within this sector, but as restrictions eased and the economy began to bounce back, so did construction activities. Furthermore, by classifying heavy engineering construction as essential, the government played a crucial role in averting a significant revenue downturn. Over the last five years, the revenue for companies within this sector has seen a CAGR of 1.2%, with projections indicating a total revenue of $66.0 billion in 2024. This year is also expected to witness a revenue increase of 1.2%, with profits making up 8.4% of the total revenue.

  • Profit of the sector 2024: $5.5B
  • Profit Margin: 8.4%
  • Barriers to Entry: Moderate
  • Top Companies:

5 – Frozen Food Wholesaling

Over the last five years, Canada's frozen food wholesale industry has steadily increased, with revenues climbing at an average annual rate of 1.0%, anticipated to reach $63.2 billion in 2024. This year, the industry is poised for a further revenue boost of approximately 1.6%.

However, the industry faced a setback in 2021 when a decline in revenue was observed as consumers, influenced by the easing of pandemic-related restrictions and the progress of vaccination campaigns, shifted their preferences towards fresh food over frozen alternatives.

Despite these challenges, the industry has enjoyed a surge in demand, fueled by an economic upturn and rising incomes, leading to heightened consumer spending for most of the review period. This economic improvement has driven increased demand from downstream channels, including retail stores and food service establishments.

Efforts by food processors to offer healthier frozen food options have also contributed to this demand surge. The industry's growth has been supported by an increase in the consumer price index for food, enhancing the perceived value of frozen food products.

6 – Engineering Services

In Canada, the engineering services sector, encompassing consulting, design, feasibility studies, and technical services for various projects, has seen growth fueled by increased demand from key markets, notably those driven by commodities.

Until 2019, stagnant oil prices curtailed expansion, further aggravated by the COVID-19 pandemic's impact on global demand. A subsequent surge in the oil and gas sector sparked significant new interest from clients in oil, gas, and mining, leading to a 13.6% increase in industry revenue in 2022.

Despite the sector's exposure to market fluctuations, projections indicate a Compound Annual Growth Rate (CAGR) of 4.3%, reaching $47.6 billion by 2024, with an anticipated growth of 2.6% for the current year.

  • Profit of the sector in 2024: $4.4B
  • Profit Margin: 9.4%
  • Barriers to Entry: Moderate but increasing
  • Top Companies:
    • WSP Global: Revenue $1.7B, Headquarters – Montreal, Canada
    • AtkinsRéalis: Revenue $1.0B, Headquarters – Montreal, Canada
    • Aecom: Revenue $581.8M, Headquarters – Los Angeles, USA
    • Stantec Inc.: Revenue $400M, Headquarters – Edmonton, Canada

7 – Law Firms and Legal Services

The legal sector in Canada has been on an upward trajectory, with projections showing a Compound Annual Growth Rate (CAGR) of 0.7%, culminating in an $18.5 billion revenue by the end of 2024. This includes a forecasted revenue bump of 1.1% in 2024 alone.

Restructuring, secondary offerings, and other capital market transactions have propelled the demand for legal services within the industry. This surge has predominantly benefited the largest law firms, which derive a substantial portion of their revenue from corporate clients.

Moreover, the sector's smaller and medium-sized entities have seen growth opportunities through an increase in the formation of Canadian businesses, thereby widening the potential client base. Additionally, the robust expansion of Canada's real estate market over the same period has significantly enhanced the demand for legal expertise in real estate law.

8 – Property Management

Property management professionals are tasked with the oversight of apartment complexes and various rental properties. The demand for their services tends to rise when economic downturns push more individuals towards renting due to escalating home ownership costs.

The sector has grown throughout much of the recent period, primarily driven by the residential real estate market's buoyancy. A decrease in rental vacancy rates, spurred by demographic and economic factors such as population, job growth, and rising mortgage rates and property prices, has restricted many from owning homes. This scenario has, in turn, boosted the demand for property management services in the residential sector over the last five years.

On the other hand, the non-residential property market has faced instability, primarily due to the impacts of COVID-19 and interest rate changes. Despite these challenges, the sector has achieved a CAGR of 0.9%, reaching $9.7 billion in revenue by 2024, with a further increase of 0.4% expected in 2024.

9 – Plastic and Resin Manufacturing

The plastic and resin manufacturing sector has recently experienced revenue volatility, significantly impacted by the pandemic. The closure or reduced operation of many downstream industries during this period negatively influenced revenue streams.

With the easing of pandemic restrictions, a surge in crude oil and natural gas prices ensued, leading to increased costs for raw materials. This situation compelled manufacturers to elevate their product prices at the expense of profit margins to sustain consistent sales.

However, a shift in these dynamics led to a pronounced revenue downturn beginning in 2022, exacerbated by an oversupply in petrochemicals that further depressed prices. Consequently, the sector is projected to see a Compound Annual Growth Rate (CAGR) decline of 2.1%, reaching $9.1 billion by the close of 2024. Despite this, a 2.6% revenue increase is anticipated in 2024, driven by expected demand and production output gains.

  • Profit of the sector in 2024: $2.8B
  • Profit Margin: 20.8%
  • Barriers to Entry: High and Increasing
  • Top Companies:

10 – Insurance

The insurance sector offers crucial services to individuals and businesses, safeguarding against various events, from car accidents to natural disasters and beyond. This industry has seen a steady increase, supported by the rise in per capita disposable income and corporate earnings, which has allowed for the adjustment of premium rates upwards.

The demographic evolution of Canada—marked by growth, aging, urbanization, and increasing wealth—has significantly propelled the demand for property, casualty, and direct insurance services. Anticipated to grow at a CAGR of 5.2%, the industry's revenue is projected to reach $78.9 billion by 2024, with a notable increase of 1.8% expected in 2024 alone. This upcoming rise is primarily linked to the economic rebound post-pandemic and the escalation of interest rates, positioning the sector for a profit margin of 3.4% in the same year.

How Sobirovs Can Help

As we delve into the intricacies of these top sectors, the opportunities for foreign entrepreneurs, business owners, and investors in Canada become increasingly clear. Each industry not only offers a glimpse into Canada's economic strengths but also highlights the challenges and opportunities that lie ahead.

If you are a foreign entrepreneur looking to invest in Canada, there are plenty of opportunities across various industries. The top 10 profitable industries in Canada in 2024 offer promising prospects for investors seeking to capitalize on Canada's robust economy, skilled workforce, and stable political climate.

These ten industries are forecasted to be the most profitable industries in Canada in 2024. However, starting a business in any of these industries requires careful planning, adequate resources, and an understanding of Canadian laws and regulations. It is important for entrepreneurs to consult with a trusted business immigration law firm to ensure compliance with all legal requirements.

Sobirovs Law Firm offers expert guidance and support for those looking to navigate this landscape. With a deep understanding of Canada's business environment and a commitment to helping clients achieve their goals, Sobirovs Law Firm is your partner in exploring Canadian business opportunities.

We invite you to book a 1-hour strategy meeting with our experienced business immigration lawyers to unlock the potential of Canada's top sectors and pave the way for your success in this vibrant market.

COMPLETE THE BUSINESS IMMIGRATION ASSESSMENT FORM

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

ARTICLE
25 March 2024

The Most Profitable Businesses In Canada For 2024: Top 10 List With Examples

Canada Corporate/Commercial Law

Contributor

Toronto-based boutique Sobirovs Law Firm assists corporate and tech-sector clients, foreign businesses, entrepreneurs and investors, with Canadian immigration matters. The firm specializes in labour market impact assessments, permanent residence applications, TechImmigration, and treaty-based immigration.
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