Canada Economy

By | October 11, 2021

Business

According to healthvv, Canada’s economy is based on abundant and varied natural potential, such as mineral resources, abundance of wood and fish, fertile soils and inexpensive energy generation from rivers. There is also a modern manufacturing and specialized industry as well as a rapidly growing service sector. The economy is built on the principle of the social market economy. Canada is one of the world’s leading industrialized countries and belongs to Group G 7. With the accession to the North American Free Trade Agreement NAFTA (North American Free Trade Area) On January 1, 1994, Canada entered a sustained phase of continuous economic growth that only stalled in the wake of the international financial crisis (GDP increase in 2009: –2.5%; 2017: +3.0%). The inflation rate was 1.6% in 2017, while unemployment initially rose to 8.3% (2009) in the wake of the crisis, but was reduced again to 6.4% by 2017.

Foreign trade: Given the production potential of the Canadian economy and a relatively limited domestic market due to its small population, Canada is one of the leading world trading nations. Export goods are predominantly industrial products (especially cars and auto parts as well as machines), but also energy products (especially gas and crude oil) and agricultural products. The most important import goods are machines and equipment, vehicles, electronic and other consumer goods. The foreign trade balance is almost balanced with a tendency towards an import surplus (import value 2017: 432 billion US- $; export value: 421 billion US- $). The USA is by far the most important trading partner (2017: 75.9% of all exports and 51.3% of imports); this is followed by China with 4.3% and 12.6% respectively, as well as Great Britain, Mexico and Japan. Canada and the USA have the largest bilateral trade in the world; in addition to the Auto-Pact concluded in 1965, they have been linked by a free trade agreement (FTA) since 1989, which already included considerable tariff reductions. Since January 1, 1994, this agreement has been approved by North American Free Trade Area (NAFTA) expanded between Canada, the United States, and Mexico. The Comprehensive Economic and Trade Agreement (CETA) with the EU still has to be ratified by the national parliaments of the EU before it comes into full force.

Agriculture

In 2018, 1.5% of the workforce worked in the primary sector; Despite the small share of agriculture in GDP (1.6%), agricultural products are an important source of foreign currency. The main crops are wheat (on around 20% of the arable land), rape, maize, barley, potatoes, soybeans, alfalfa, oats and animal feed. There is also extensive livestock farming. A total of around 64.8 million hectares are used for agriculture, 45.1 million hectares of which are arable land. The main growing areas, especially for grain, are the prairie provinces. Cattle breeding is more regionally distributed, dairy farming and special crops are particularly widespread in the east or in small areas in the south of British Columbia. Mechanization that started early on has led to high labor productivity, At the same time, the income could be increased continuously. However, the number of farms steadily decreased (1941: 733,000, 2011: 205,700). In contrast, the average size of the farms has grown significantly. A large part of agricultural production is exported (mainly to the USA), agricultural products make up 6.0% of exports. Canada is the world’s most important wheat exporter after Russia and the USA. – The fishing and breeding of fur has lost much of its importance.

Forestry: From an economic point of view, forestry is of outstanding importance. Canada’s forest area is around 4.2 million km 2quantified, of which a good half can currently be used for wood industry. Most of the forests are owned by the provinces (71%) and the state (23%), which issue licenses for their use. The logging amounts (2015) to 156.0 million m³ and is mainly processed into pulp, paper and construction timber. The main customers are the USA, as well as Japan and the EU. Large-scale clear cuts and forest roads promote soil erosion and destroy ecosystems. This is especially true in mountainous British Columbia, where over 30% of the wood is extracted, especially cedar, hemlock and sitka spruce. When there is high rainfall, so-called extra-tropical rainforests grow on the coasts, the use of which in clear-cutting has been a source of strong criticism at home and abroad for several years.

Fisheries: Canada has extensive fish resources on two coastlines and numerous inland lakes. Salmon fishing dominates the Pacific, while cod, herring, red fish, plaice and crustaceans are caught in the shelf areas on the Atlantic coast. The total catch amounts to (2014) 849 600 t (including 144 000 t from aquaculture). The Atlantic lobster makes the highest contribution in terms of value. In order to protect the stocks especially of the high-yielding Newfoundland banks against overfishing, the government extended its sovereign area to 200 miles in 1977, reduced the fishing quotas and in recent years drastically reduced the fishing season for some fish species; sometimes to a few days a year, which particularly affects the province of Newfoundland and Labrador.

Natural resources

With its extensive and varied raw material deposits, Canadian mining holds a leading position worldwide. When it comes to the extraction of potash and uranium, as well as asbestos, nickel, zinc, gypsum, platinum, cobalt, aluminum, molybdenum and gold, it takes top positions in an international comparison. The extraction of potash salt, lead, copper and diamonds is also important. Natural gas and oil are available in larger quantities. More than a third of the oil is made from oil sandswon in the province of Alberta. This form of oil extraction is strongly criticized by environmental groups because it is associated with high water consumption and a sharp increase in greenhouse gas emissions. There is also strong opposition to the expansion of the pipeline network. In addition to the oil deposits in the west (provinces of Alberta, British Columbia, Saskatchewan), oil has also been produced offshore off the province of Nova Scotia and off the coast of Newfoundland since the 1990s. In 2017 the output was 236.3 million t (5.4% of the world output); in addition, 176.3 billion m 3Extracted natural gas. The mining of hard coal and lignite (2017: 31.1 million t) is concentrated in the mountainous west of Alberta and British Columbia. About 80% of mining production is exported, making Canada one of the world’s largest exporters; The main customers are the USA, Japan and Western Europe. Overall, the share of the mining sector in GDP was 8.1% (2015).

Canada Economy