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Canada

Economy

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Canada has an advanced economy, and the majority of its citizens enjoy a high quality of life by world standards. Historically, much of this wealth has been generated through the extraction and processing of natural resources, especially fish, furs, timber, minerals, and farm produce. Increasingly, however, manufacturing and service activities have been added, and Canada now has one of the most complex economies in the world. Canada is also highly integrated into the global economy through trade, with more than a third of its GDP dedicated to exports.

The Canadian economy has grown more rapidly than those of most other developed countries since the recession of the early 1990s. This success is due to several factors, including low inflation, low interest rates, and a low Canadian dollar (with respect to other major currencies), all of which helped exports to grow. However, this growth has not generated as many jobs as analysts expected. Canadian businesses have found ways to increase their output by introducing more-efficient methods of production rather than hiring more workers. Also, the role of government in the Canadian economy has declined, and with it the number of jobs in the public sector. In early 2006 Canada’s unemployment rate was 6.6 percent.

From 1990 to 2003 the Canadian economy grew an average of 3.28 percent per year, reaching a GDP of C$857 billion, which represented a per-capita income of C$27,080. By 2003 Canada had achieved the second highest budget surplus and the lowest debt-to-GDP ratio of any Group of Eight (G-8) nation. The proportion of GDP accounted for by federal government expenditure decreased from 15.7 percent in 1994 to 11.5 percent in 2003. Employment growth in Canada’s manufacturing industries began to slow in the late 1990s, while employment in the service industry saw a strong increase. By 2003 three out of four Canadians worked in service industries, including the fields of health care and public administration.

Furs

In many ways, the fur industry created Canada. Much of pre-Confederation history revolves around the competition between the French and British for control of the profitable fur trade. But by the late 20th century demand for fur had declined, and the income of indigenous trappers had suffered severely. Canada’s remaining fur farms are mainly concentrated in Ontario, Nova Scotia, Quebec, and British Columbia. Trapping is carried on primarily in northern Canada; Ontario, Quebec, Alberta, Saskatchewan, and Manitoba are the main producers of wildlife pelts.

Currency and Banking

The unit of currency in Canada is the Canadian dollar, which consists of 100 cents (C$1.10 equals US$1, 2006 average). The Bank of Canada, which was founded in 1935 and is owned by the federal government, has the sole right to issue paper money for circulation.

Most foreign-owned and major domestic banks in Canada have their head offices in Toronto, and a few are based in Montreal. Trust and mortgage loan companies, provincial savings banks, and credit unions also provide banking services. Securities exchanges operate in Toronto, Montreal, Winnipeg, Calgary, and Vancouver.

 
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