An Overview of Canada's Economy
Canada, the second largest country in the world, has a huge amount of natural resources and
one of the best economies in the world. Constantly growing manufacturing, mining and
service sectors has turned the Canadian nation from a rural economy to industrial and urban
Around 70% of Canadians are involved in the service industry which makes it leading
industry sector of Canadian economy. Oil and logging industries dominate in the primary
sector because Canada has the second largest oil resource in the world after Saudi Arabia and
vast 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 more than 200,000 Canadians and brings more than $20 billion a year to the
Canada's economy. Oil and gas sector attracts approximately $80 billion. Also, the
automotive industry is the largest manufacturing sector in the country. Due to NAFTA
agreement Canada is one of the biggest exporters of automobile equipment and goods.
Canada is not accidentally in G8. Let's see a few more points of its economy.
World Trade Organization.
Canada is a member of the World Trade Organization (WTO) since January 1, 1995 because
international trade is one of the main parts of the Canadian economy. Canada's economic
growth depends on the access to global markets for different goods and services. The USA,
China, European Union and many other countries are trade partners of Canada but most
products are exported to the USA, which makes it main trade partner of Canada.
Canadian GDP and NAFTA.
Both GDP (Gross Domestic Product) and GDP per Capita have been growing 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 agreement was
signed by leaders of mentioned countries, and took effect on January 1, 1994. Since that time
Canadian GDP has grown incredibly and continues growing. In 2009 GDP went down
because of the global crisis but in 2010 the drop was compensated and in 2011 and 2012
GDP has been constantly growing.
During the global financial crisis at the end of the last decade the Canada's banks were
relatively stable. While US banks were collapsing Canada did not have any bank failures.
Therefore its banks system was rated as the most sound in the world. There are six largest
Canada's banks which are in the list 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 of Canada is constantly growing. At the beginning of the previous decade it was
roughly $500 billion and at the end of 2012 it was more than $600 billion which is around
$17,000 per citizen. For comparison, every US citizen owes more than $52,000. Comparing
to the USA Canada's public debt is much lower, but anyway it always grows.
Investors play a very important role in the economic growth of any country. Therefore
Canada has Foreign Investment Promotion and Protection Agreement (FIPA) with more than
twenty countries: Russian Federation, Poland, Egypt, Thailand, Venezuela etc. Such
agreement obligates both countries to respect foreign investors and investment. In addition,
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 the two countries.
This field has a few problems. Firstly, it is a lack of physicians and nurses. Patients can wait
for a visit of the doctor more than a month. This can cost somebody a life. The second
problem is the cost of the medical care. Of course, all serious cases are covered by Medical
insurance and generally health of Canadians is protected, but people can pay that Medical
insurance organization more than 40% of their budget every month.
It is important to highlight because during the global crisis which started at the end of 2007 a
lot of people around the globe lost their jobs. 240,000 Canadian workers lost jobs during just
first two months of 2009.
Over the last 30 years employment insurance (EI) of Canada had several changes. Canadian
government has made a few different cuts of EI since 1980s. Duration of benefits, amount of
money paid and qualification periods have been cut during this period of time. In 2008 the
government created several employment insurance pilot programs which influenced
positively the Canadian economy and increased the citizen's income. Under such pilot
program people can have part time job while they are on claim without a deduction from their
Canada Pension Plan.
Canada Pension Plan (CPP) is also a strong part of Canadian economy. Canada Pension Plan,
CPP Investment Board, Quebec Pension Plan (QPP) and Old Age Security (OAS) are all
programs to provide secure and wealthy lives for retired people.
In conclusion it is worth to say that globalization made all more connected and the growth of
Canadian economy mostly depends on the growth or failure of its neighbour economy, the
US, which currently has a recession. However, as the Prime Minister Stephen Harper told,
once: Canada will emerge from the global recession before any other country and in a
stronger economic position than ever. Actually, we can agree with him since Canada has the
potential to do so.