Canada’s Economy: An Overview

Canada, the second-largest nation on earth, has an enormous number of natural resources and among the greatest markets in the world. Constantly growing production, mining and service industries has turned the Canadian country from a rural economy to urban and industrial one.

Around 70 percent of Canadians are involved in the service sector making it the major industry sector of the Canadian market. Oil and logging sectors dominate in the principal industry because Canada has the second-largest oil resource in the world after Saudi Arabia and the huge majority of the forests. Sub sectors of the forest industry are solid wood product manufacturing, pulp and paper product manufacturing, and forestry and logging. This sector employs over 200,000 Canadians and attracts over $20 billion annually into Canada’s economy. Oil and gas industry attracts approximately $80 billion. Additionally, the automotive industry is the largest manufacturing industry in the nation. Because of NAFTA agreement Canada is among the biggest exporters of automobile equipment and products.

World Trade Organization

Canada is a member of the World Trade Organization (WTO) since January 1, 1995, because international trade is one of the principal areas of the Canadian market. Canada’s economic growth is based upon access to international markets for various goods and services. The USA, China, European Union, and several other countries are trade partners of Canada but most products are exported to the USA, making it chief trade partner of Canada.

Canadian GDP and NAFTA

Both GDP (Gross Domestic Product) and GDP per Capita have been rising since the North American Free Trade Agreement (NAFTA) was signed by the governments of Canada, Mexico, and the United States creating a trade bloc in North America. The arrangement was signed by leaders of mentioned states and took effect on January 1, 1994. Ever since then Canadian GDP has grown tremendously and continues growing. In 2009 GDP went down due to the worldwide crisis but in 2010 the fall was paid and in 2011 and 2012 GDP was continuously growing.

Banking System

During the worldwide financial crisis at the end of the previous decade that Canada’s banks were relatively steady. While US banks were falling Canada didn’t have any bank failures. Hence its bank’s system has been rated as the very sound on earth. There are six biggest Canada’s banks which are among of the best banks in the world: Royal Bank of Canada, Canadian Imperial Bank of Commerce (CIBC), TD Bank Financial Group, the bank of Nova Scotia, Bank of Montreal and National Bank of Canada.

Public Debt

The public debt of Canada is continually growing. At the start of the last decade, it had been approximately $500 billion and at the end of 2012, it had been more than $600 billion that is approximately $17,000 per taxpayer. For contrast, each US citizen owes over $52,000. Comparing to the USA Canada’s public debt is a lot lower, but anyhow it always grows.

Investors

Investors play a very significant part in the economic development of any country. Therefore Canada has Foreign Investment Promotion and Protection Agreement (FIPA) with over twenty countries: Russian Federation, Poland, Egypt, Thailand, Venezuela, etc.. Such arrangement obligates both countries to honor foreign investment and investors. Moreover, on September 9th, 2012, Leaders of Canada and China signed FIPA. As Prime Minister Stephen Harper told a new trade agreement between Canada and China had the potential to create thousands of jobs and strengthen important trading ties between both nations.

Canadian Healthcare

This field has a couple of issues. Firstly, it’s a shortage of doctors and nurses. Patients may wait for a visit to the physician over a month. This can cost someone a lifetime. The next problem is that the cost of their medical care. Of course, all severe cases are covered by Medical insurance and general health of Canadians is protected, but individuals can cover that Medical insurance company more than 40 percent of the budget each month.

Unemployment Insurance

It’s necessary to highlight because throughout the international crisis which began at the end of 2007 a good deal of people around the world lost their jobs. 240,000 Canadian employees lost jobs during only the first two weeks of 2009.

Over the past 30 years of employment insurance (EI) of Canada had several changes. The Canadian government has created a couple of distinct cuts of EI because of the 1980s. Duration of benefits, amount of cash paid and eligibility periods are cut in this time period. In 2008 the government established several employment insurance programs that influenced positively the Canadian market and increased the taxpayer’s income. Under these pilot program, people can have a part-time job while they’re on a claim with no deduction in their own benefits.

Canada Pension Plan

Canada Pension Plan (CPP) is also a powerful part of the Canadian market. Canada Pension Plan, CPP Investment Board, Quebec Pension Plan (QPP) and Old Age Security (OAS) are programmed to provide wealthy and secure lives for retired men and women.

In conclusion, it’s worth to say that globalization created all more connected and the increase of Canadian market mostly depends upon the expansion or collapse of its neighbor market, the US, which now has a recession. However, as Prime Minister Stephen Harper told, after: Canada will emerge in the worldwide recession before any other nation and in a stronger economic position than ever. In fact, we could agree with him because Canada has the capability to do so.

4 Comments

  1. Cobus Bester March 26, 2014
  2. john March 26, 2014
  3. Joseph Scott March 26, 2014
    • maria March 26, 2014

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