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Canada’s economic system is robust and supported by many industries’ success, including banking and finance. Besides, attractive investment and business-friendly taxation policies attract new players to the Canadian market, allowing for healthy competition and creating new jobs. It is also important that Canada has excellent talent potential, as most Canadians are highly qualified professionals. The country has a friendly immigration policy that includes many programs to adapt immigrants to live in the country and reasonably doable conditions for obtaining long-term work visas. Foreign skilled and semi-skilled workers are eligible to apply for permanent residence status. Economic freedom is high thanks to a well-thought-out and efficient legal and judicial system. The ratio of private and public property is 40% to 60%.
Canada recorded high scores for property rights 87.7, judicial efficiency 72.7, government integrity 90.3, tax burden 76.5, and financial health 83.3. Other notable scores include business freedom 81.7, labor freedom 72.0, monetary freedom 76.0, free trade 87.0, investment freedom 80.0, financial freedom 80.0, and government spending 50.9 (“Important Facts Related to the Economy”). Tax rates are lower than in many European countries and the U.S.; the corporate tax is 15%. At the same time, tax revenues account for 32.2% of total domestic income.
Canada is the 10th largest economy globally; the current economic growth rate is 3.5%. In terms of its position in the global trade arena, Canada is a member of the G8, an organization for economic cooperation and development, and Asia Pacific economic development. The main trading partners are Mexico and the United States, with which Canada has free trade agreements and other countries, including Japan and the E.U. The tourism industry is well developed, as is the energy sector, which offers low natural gas prices. The country is the electricity export leader to France and Paraguay and uranium export leader to Kazakhstan. Besides, Canada is the world’s largest exporter of agricultural products.
The country’s natural resources are very rich, especially the fishing and woodworking industries – Canadian timber account for half of Europe’s renewables. The country has a vast territory – the second largest in the world. Canada contributes to protecting the environment by developing alternative energy sources and is a global leader in commercialization, development, and solar energy research. Agriculture also develops in the framework of environmental protection; many enterprises in the country produce processed products and organic products without using genetic techniques, chemical fertilizers, and synthetic pesticides. Heavy industry is mainly represented by machinery and equipment, as Canada is the world’s leading manufacturer. The country also has a developed aerospace industry – Canada ranks fifth after the United States, Great Britain, France, and Germany. The pharmaceutical sector has been partially nationalized, as the move helped implement health reform and provide better services to the population.
Canada’s economy is heavily dependent on trade with the United States, and the U.S. increase in interest rates on imported goods has had significant implications. A large percentage of the country’s manufacturing capacity is located closer to the U.S. border. The most developed regions are Western Canada, characterized by rapid economic growth and many oil fields, and Central Canada, which is home to 50% of the population employed in services and manufacturing. Atlantic provinces, including New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland, and Labrador, are experiencing economic downturns, except for the fishing industry. It is noteworthy that new deposits of natural gas and oil were discovered in Newfoundland and Labrador.
The country’s financial performance has improved significantly following economic and banking reform. External reserves amounted to $ 65.82 billion in 2020, a deficit of $ 47 billion was declared for the following two years (“Important Facts Related to the Economy”). The robust consumer goods and services sector drives to state budget significant tax revenues. In 2020, the state introduced a population support program, under which CAD 380 million in direct payments were paid to parents to provide for their children. Another 300 million CAD was received by companies that had to close their businesses due to the COVID-19 pandemic. Discounts were also introduced on property taxes and energy costs.
The country’s economy relies heavily on exports and international trade. In 2015, $ 523.904 billion were for exports and $ 547.874 billion for imports (“Important Facts Related to the Economy”). The largest export volumes are automobiles and components, industrial equipment, plastics, aircraft, telecommunications equipment, chemicals, fertilizers, wood pulp, wood, crude oil, natural gas, and aluminum. The United States is the country’s largest trading partner, accounting for 75.2% of exports and 66.28% of imports. Exports and imports with China are 4.1% and 4.1%, imports to Germany are 2.73%, exports and imports with Japan are 1.93% and 1.99%, and 1.15% and 3.35% with Mexico; 0.86% goes for exports to India, and 0.81% for exports to South Korea. Trade relations with the G7 countries account for 67% of GDP.
Notably, Canada is the 10th largest oil exporter globally and the 5th largest oil exporter outside the Middle East. The main trading partners for oil are the USA – 50%, other countries – 30%, China, Mexico, and Great Britain – 20% (“Important Facts Related to the Economy”). The country is also a leader in the export of natural gas, coal, nickel, copper, iron ore, potash fertilizers, timber, ranks 3rd world leader in electricity exports and 2nd world leader in uranium exports. Natural resources account for 18% of total exports to China. Agricultural products that the country sells worldwide are wheat, cereal products, lentils, flaxseeds, mustard seeds, peas, barleycorn, blueberries, cranberries, mixed grains, oats, rapeseed, pork, turkey, raspberries, rye, soybeans, beef, mushrooms, and maize.
Macroeconomic statistics show that government spending amounted to 40.5% of GDP over the past three years, with a budget deficit of 0.4% of GDP and public debt of 90.6% of GDP. Canada has a free market, the country’s economic system is market-oriented, with government regulation of private enterprises. State-owned enterprises include postal, electricity, and transportation services. The U.S. is a foreign investment leader and invests mainly in mining, smelting, petroleum, chemicals, transportation equipment, machinery manufacturing, and finance; Canada invests in U.S. manufacturing and wholesale.
Canada’s leading stock exchanges are located in Montreal, Toronto, Winnipeg, Alberta, and Vancouver. According to the WBI ranking, in 2018, Canada was ranked 3rd in the global entrepreneurship index, and in 2019 it was 6th. GDP is $ 1.7 trillion, which equates to $ 49,690 per capita per 37.1 million people. Major industries include manufacturing, retail, film production, foreign trade, services, manufacturing, agriculture, service industries, natural resources, self-service restaurants, mining, oil and gas, and construction.
The country also has thriving industry sectors of forestry, automotive and aviation industries, energy sector, environmental technology, renewable energy, wireless communications, chemicals, biopharmaceuticals, plastics, machinery and equipment, aerospace and defense, food distribution, beverage and food processing, forestry, refrigeration, and minerals. Low labor costs and the existence of a social security system characterize production. Major car companies in the U.S. and Japan have manufacturing facilities in Canada.
Works Cited
“Important Facts Related to the Economy of Canada.” World Atlas. Web.
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