Canadian Economy

The economy of Canada is a highly developed mixed economy. It is the world's ninth-largest with a nominal GDP of approximately . Canada is one of the world's largest trading nations, with a highly globalized economy. In 2021, Canadian trade in goods and services reached $2.016 trillion.PDF version
/ref> Canada's exports totalled over $637 billion, while its imported goods were worth over $631 billion, of which approximately $391 billion originated from the United States. In 2018, Canada had a trade deficit in goods of $22 billion and a trade deficit in services of $25 billion. The Toronto Stock Exchange is the tenth-largest stock exchange in the world by market capitalization, listing over 1,500 companies with a combined market capitalization of over .

Canada has a strong cooperative banking sector, with the world's highest per-capita membership in credit unions. It ranks low in the Corruption Perceptions Index (12th in 2023) and "is widely regarded as among the least corrupt countries of the world". It ranks high in the Global Competitiveness Report (14th in 2019) and Global Innovation Indexes (15th in 2022). Canada's economy ranks above most Western nations on The Heritage Foundation's Index of Economic Freedom and experiences a relatively low level of income disparity. The country's average household disposable income per capita is "well above" the OECD average. Canada ranks among the lowest of the most developed countries for housing affordability and foreign direct investment. Among OECD members, Canada has a highly efficient and strong social security system; social expenditure stood at roughly 23.1% of GDP.

Since the early 20th century, the growth of Canada's manufacturing, mining, and service sectors has transformed the nation from a largely rural economy to an urbanized, industrial one. Like many other developed countries, the Canadian economy is dominated by the service industry, which employs about three-quarters of the country's workforce. Among developed countries, Canada has an unusually important primary sector, of which the forestry and petroleum industries are the most prominent components. Many towns in northern Canada, where agriculture is difficult, are sustained by nearby mines or sources of timber. Canada spends around 1.70% of GDP on advanced research and development across various sectors of the economy.

Canada's economic integration with the United States has increased significantly since World War II. The Automotive Products Trade Agreement of 1965 opened Canada's borders to trade in the automobile manufacturing industry. In the 1970s, concerns over energy self-sufficiency and foreign ownership in the manufacturing sectors prompted the federal government to enact the National Energy Program (NEP) and the Foreign Investment Review Agency (FIRA). The government abolished the NEP in the 1980s and changed the name of FIRA to Investment in Canada to encourage foreign investment. The Canada – United States Free Trade Agreement (FTA) of 1988 eliminated tariffs between the two countries, while the North American Free Trade Agreement (NAFTA) expanded the free-trade zone to include Mexico in 1994 (later replaced by the Canada–United States–Mexico Agreement). As of 2023, Canada is a signatory to 15 free trade agreements with 51 countries.

Canada is one of the few developed nations that are net exporters of energy. Atlantic Canada possesses vast offshore deposits of natural gas, and Alberta hosts the fourth-largest oil reserves in the world. The vast Athabasca oil sands and other oil reserves give Canada 13 percent of global oil reserves, constituting the world's third or fourth-largest. Canada is additionally one of the world's largest suppliers of agricultural products; the Canadian Prairies are one of the most important global producers of wheat, canola, and other grains. The country is a leading exporter of zinc, uranium, gold, nickel, platinoids, aluminum, steel, iron ore, coking coal, lead, copper, molybdenum, cobalt, and cadmium. Canada has a sizeable manufacturing sector centred in southern Ontario and Quebec, with automobiles and aeronautics representing particularly important industries. The fishing industry is also a key contributor to the economy.

Overview

With the exception of a few island nations in the Caribbean, Canada is the only North American country to use the parliamentary system of government. As a result, Canada has developed its own social and political institutions, distinct from most other countries in the world.Global Systems by David J Rees with Michael G Jones, Chapter 4, Though the Canadian economy is closely integrated with the American economy, it has developed unique economic institutions.

The Canadian economic system generally combines elements of private enterprise and public enterprise. Many aspects of public enterprise, most notably the development of an extensive welfare spending system to redress social and economic inequities, were adopted after the end of World War II in 1945.

Approximately 89% of Canada's land is Crown land. Canada has one of the highest levels of economic freedom in the world. Today Canada closely resembles the U.S. in its market-oriented economic system and pattern of production. As of 2019, Canada has 56 companies in the Forbes Global 2000 list, ranking ninth just behind South Korea and ahead of Saudi Arabia.
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. Machinery, equipment, automotive products and other manufactures accounted for a further 38% of exports in 2009. 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. Canada's combined exports and imports ranked 8th among all nations in 2006.

About 4% of Canadians are directly employed in primary resource fields, and they account for 6.2% of GDP. 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. 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

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