Economy / Business
Canada is one of the world’s leading economies (10th largest – 2018). Having an enormous wealth of natural resources, technologically advanced & highly industrialized, Canada is one of the world’s richest nations with a highly sophisticated economy and a top-tier standard of living. It boasts a highly educated workforce. Having a market-oriented globalized economic system, it is also one of the least corrupt countries in the world and one of the world’s top 10 trading nations (in 2018 Canada’s trade in goods & services reached CAD 1.5 trillion). Though market-oriented, the government tends to provide more support & intervention than does the US government.
Canada ranks –
- In the top 15 most competitive economies in the world (Source: Conference Board)
- 2nd of the G-7 countries in ability to attract long-term business investment due to sound economic infrastructure (Source: Global Infrastructure Investment Index)
- 1st among G8 countries for “soundest banking system” (Source: World Economic Forum)
- In the top 10 of best places to do business in the world (Source: Forbes).
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.
Canada’s economy includes 3 main types of industries :
- Service industries which provide jobs to 75% of working Canadians in areas such as transportation, education, health care, construction, banking, communications, retail services, tourism and government. Toronto is the leading financial and services centre.
- Manufacturing industries which make products such as paper, high technology equipment, aerospace technology, automobiles, machinery, food, clothing and many other goods to sell domestically & for exports. Canadian manufacturing employs about 13% of the total labour force. It is highly concentrated in the “central Canadian region” of Ontario & Quebec, which together house more than 75% of all Canadian manufacturing jobs.
- Natural resources industries which include forestry, fishing, agriculture, mining and energy. Canada is one of the few developed nations that are net exporters of energy. Atlantic Canada possesses vast offshore deposits of natural gas. Alberta also possesses large oil and gas resources. Canada’s energy assets result in it having a 13% & 3rd largest share of global oil reserves, after Venezuela and Saudi Arabia. Canada is also one of the world’s largest suppliers of agricultural products such as Wheat, Canola & other grains. The country is a world leader in the production of Uranium, Zinc, Nickel, Potash, Asbestos, Sulphur, Cadmium & Titanium. It is also a major producer of iron ore, coal, petroleum, gold, copper, silver, leadand a number of ferro-alloys. Diamond mining, particularly in the Northwest Territories, is significant as well. Canada is richly endowed with hydroelectric power resources. It has about 1/6th of the world’s total installed hydroelectric generating capacity. Canada is a world leader in the export of pulp and paper and also exports large amounts of softwood lumber.
Apart from having a free-trade agreement (NAFTA) with the United States (its largest trading partner), Canada currently also has free trade agreements with much of Latin America (Mexico, Chile, Colombia, Costa Rica, Honduras, Panama, and Peru), middle eastern allies Israel and Jordan, and the four non-EU countries in Europe – Iceland, Liechtenstein, Norway & Switzerland, though the amount of trade Canada does with these countries is quite small. Canada’s second-biggest trade partners after the United States are the European Union (EU), China and Mexico, who collectively represent about 20% of all Canadian trade.
Personal income taxes in Canada are progressive, i.e. people pay a different rate depending on how much income they make. The bottom rate is 15% and the top rate is 33%, while at the provincial level most rates are roughly half that. Corporations also pay income tax. The federal corporate income tax rate is a flat 15% (10% for “small businesses”), one of the lowest rates in the world, while the provincial rates are, again, roughly half that.