Economy of Canada
The economy of Canada is a highly developed market economy.[25] It is the 9th largest GDP by nominal and 15th largest GDP by PPP in the world. As with other developed nations, the country’s economy is dominated by the service industry which employs about three quarters of Canadians.[26] Canada has the third highest total estimated value of natural resources, valued at US$33.2 trillion in 2019.[27] It has the world’s third largest proven petroleum reserves and is the fourth largest exporter of petroleum. It is also the fourth largest exporter of natural gas. Canada is considered an “energy superpower” due to its abundant natural resources and a small population of 37 million inhabitants relative to its land area.[28][29][30]
.jpg)
According to the Corruption Perceptions Index, Canada is one of the least corrupt countries in the world,[31] and is one of the world’s top ten trading nations, with a highly globalized economy.[32][33] Canada historically ranks above the U.S. and most western European nations on The Heritage Foundation’s index of economic freedom,[34] and experiencing a relatively low level of income disparity.[35] The country’s average household disposable income per capita is “well above” the OECD average.[36] The Toronto Stock Exchange is the ninth-largest stock exchange in the world by market capitalization, listing over 1,500 companies with a combined market capitalization of over US$2 trillion.[37]
In 2018, Canadian trade in goods and services reached CA$1.5 trillion.[14] Canada’s exports totalled over CA$585 billion, while its imported goods were worth over CA$607 billion, of which approximately CA$391 billion originated from the United States, CA$216 billion from non-U.S. sources.[14] In 2018, Canada had a trade deficit in goods of CA$22 billion and a trade deficit in services of CA$25 billion.[14]
Canada is unusual among developed countries in the importance of the primary sector, with the logging and oil industries being two of Canada’s most important. Canada also has a sizable manufacturing sector, based in Central Canada, with the automobile industry and aircraft industry being especially important. With the world’s longest coastline, Canada has the 8th largest commercial fishing and seafood industry in the world.[38][39] Canada is one of the global leaders of the entertainment software industry.[40] It is a member of the APEC, G7, G20, OECD and WTO, and was formerly a member of NAFTA until the USMCA came into force in 2020.
Overview
Tree-map of Canada’s goods exports in 2017With the exception of a few island nations in the Caribbean, Canada is the only major parliamentary system inNorth America. As a result, Canada has developed its own social and political institutions, distinct from mostother countries in the world.[41] Though the Canadian economy is closely integrated with the Americaneconomy, it has developed unique economic institutions.The Canadian economic system generally combines elements of private enterprise and public enterprise. Manyaspects of public enterprise, most notably the development of an extensive social welfare system to redresssocial and economic inequities, were adopted after the end of World War II in 1945.[41]Canada has a private to public (Crown) property ratio of 60:40 and one of the highest levels of economicfreedom in the world. Today Canada closely resembles the U.S. in its market-oriented economic system andpattern of production.[42] As of 2019, Canada has 56 companies in the Forbes Global 2000 list, ranking ninthjust behind South Korea and ahead of Saudi Arabia.[43]
International trade makes up a large part of the Canadian economy, particularly of its natural resources. In 2009, agriculture, energy, forestry and mining exports accounted for about 58% of Canada’s total exports.[44] Machinery, equipment, automotive products and other manufactures accounted for a further 38% of exports in 2009.[44] In 2009, exports accounted for about 30% of Canada’s GDP. The United States is by far its largest trading partner, accounting for about 73% of exports and 63% of imports as of 2009.[45] Canada’s combined exports and imports ranked 8th among all nations in 2006.[46]
About 4% of Canadians are directly employed in primary resource fields, and they account for 6.2% of GDP.[47] They are still paramount in many parts of the country. Many, if not most, towns in northern Canada, where agriculture is difficult, exist because of a nearby mine or source of timber. Canada is a world leader in the production of many natural resources such as gold, nickel, uranium, diamonds, lead, and in recent years, crude petroleum, which, with the world’s second-largest oil reserves, is taking an increasingly prominent position in natural resources extraction. Several of Canada’s largest companies are based in natural resource industries, such as Encana, Cameco, Goldcorp, and Barrick Gold. The vast majority of these products are exported, mainly to the United States. There are also many secondary and service industries that are directly linked to primary ones. For instance one of Canada’s largest manufacturing industries is the pulp and paper sector, which is directly linked to the logging business.
The reliance on natural resources has several effects on the Canadian economy and Canadian society. While manufacturing and service industries are easy to standardize, natural resources vary greatly by region. This ensures that differing economic structures developed in each region of Canada, contributing to Canada’s strong regionalism. At the same time the vast majority of these resources are exported, integrating Canada closely into the international economy. Howlett and Ramesh argue that the inherent instability of such industries also contributes to greater government intervention in the economy, to reduce the social impact of market changes.[48]
Natural resource industries also raise important questions of sustainability. Despite many decades as a leading producer, there is little risk of depletion. Large discoveries continue to be made, such as the massive nickel find at Voisey’s Bay. Moreover, the far north remains largely undeveloped as producers await higher prices or new technologies as many operations in this region are not yet cost effective. In recent decades Canadians have become less willing to accept the environmental destruction associated with exploiting natural resources. High wages and Aboriginal land claims have also curbed expansion. Instead, many Canadian companies have focused their exploration, exploitation and expansion activities overseas where prices are lower and governments more amenable. Canadian companies are increasingly playing important roles in Latin America, Southeast Asia, and Africa.
The depletion of renewable resources has raised concerns in recent years. After decades of escalating overutilization the cod fishery all but collapsed in the 1990s, and the Pacific salmon industry also suffered greatly. The logging industry, after many years of activism, has in recent years moved to a more sustainable model, or to other countries.
Courtesy: https://en.wikipedia.org/wiki/Economy_of_Canada