Economy of Canada

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Economy of Canada

Toronto, the financial centre of Canada

Currency Canadian dollar (CAD, C$)

Fiscal year April 1 – March 29

Trade OECD, WTO, G-20, G7, USMCA, CPTPP, APEC and others

organizati
ons

Country Developed/Advanced[1]
group High-income economy[2]

Statistics

Population  39,292,355 (Q4, 2022) [3]

GDP  $2.20 trillion (nominal; 2022)[4]

 $2.24 trillion (PPP; 2022)[4]

GDP rank 8th (nominal, 2022)

15th (PPP, 2022)
GDP  4.5% (2021)[5]
growth
 3.3% (2022f)[5]

 1.5% (2023f)[5]
GDP per  $56,794 (nominal; 2022)[4]
capita
 $57,827 (PPP; 2022)[4]
GDP per 11th (nominal, 2022)
capita
23rd (PPP, 2022)
rank
GDP by agriculture: 1.6%
sector
 industry: 28.2%

services: 70.2%

(2017 est.)[6]
Inflation (  5.1% (12 month change - January 2022)[7]
CPI)
Population  6.4% (official, 2020; StatCan)[8]
below pove
rty line
Gini  0.281 low (2020, StatCan)[9][10]
coefficient
Human  0.936 very high (2021)[11] (15th)
Developme
 0.860 very high IHDI (14th) (2021)[12]
nt Index
Labour  20.3 million (September 2020)[13]
force
 59.1% employment rate (September 2020)[13]

Unemploy  5.3% (March 2022)[14]

ment  10.8% youth unemployment (December 2021; 15 to 24 year-olds)[15]

 1.2 million unemployed (December 2021)[13]

Average $1,169 weekly (March 2022)[16]
gross
salary
Main Transportation equipment
industries
chemicals

minerals

food products

wood and paper

fish products

petroleum

natural gas
Ease-of-  23rd (very easy, 2020)[17]
doing-
business
rank

External

Exports  $631.3 billion (2021)[18]

Export motor vehicles and
goods
parts, industrial machinery, aircraft, telecommunications equipment; chem

icals, plastics, fertilizers; wood pulp, timber, crude petroleum, natural gas,

electricity, aluminum
Main  United States (+) 76.2%
export
 European Union (+) 7.7%
partners
 China (−) 4.1%

 Japan (+) 2.1%

 Mexico (+) 1.5%

Other 8.4%[19]

Imports  $613.6 billion (2021)[20]

Import machinery and equipment, motor vehicles and parts, crude oil,
goods
chemicals, electricity, durable consumer goods
Main  United States (+) 52.2%
import
 China (−) 12.1%
partners
 European Union (+) 11.4%

 Mexico (+) 6.2%

 Japan (+) 3%

Other 15.1%[19]
FDI stock  $1.045 trillion (December 31, 2017 est.)[21]

 Abroad: $1.366 trillion (December 31, 2017 est.)[21]

Current  $1.4 billion (Q3 2021)[22]
account
Gross exte  $3.251 trillion (Q3 2021)[23]
rnal debt

Public finances
Public  133.32% of GDP (2021 est.)[6][note 1][24]
debt
Budget −1% (of GDP) (2017 est.)[6]
balance
Revenues 649.6 billion (2017 est.)[6]

Expenses 665.7 billion (2017 est.)[6]

Economic  donor: ODA, $6.3 billion (2021)[25]

aid
Credit Standard & Poor's:[26]
rating
AAA

Outlook: Stable

Moody's:[27]

AAA

Outlook: Stable
 Fitch:[28]

AA+

Outlook: Stable
Foreign $86.3 billion (June 2019)[29][30]
reserves
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

Historical GDP per capita of Canada

The economy of Canada is a highly developed mixed-market economy.[31][32] It is the 8th-

largest GDP by nominal and 15th-largest GDP by PPP in the world. As with other
developed nations, the country's economy is dominated by the service industry which
employs about three quarters of Canadians.[33] Canada has the third-highest total
estimated value of natural resources, valued at US$33.98 trillion in 2019.[34] It has the
world's third-largest proven oil reserves and is the fourth-largest exporter of crude oil. It
is also the fifth-largest exporter of natural gas.
According to the Corruption Perceptions Index, Canada is perceived as one of the least
corrupt countries in the world,[35] and is one of the world's top ten trading nations, with a
highly globalized economy.[36][37] As of 2022, Canada is ranked 15th on The Heritage
Foundation's index of economic freedom.[38] Its average household disposable
income per capita is "well above" the OECD average.[39] The Toronto Stock Exchange is
the eighth-largest stock exchange in the world by market capitalization, listing over
1,500 companies with a combined market capitalization of over US$3 trillion.[40]
In 2021, Canadian trade in goods and services reached CA$2.016 trillion.[41] Canada's
exports totalled over CA$637 billion, while its imported goods were worth
over CA$631 billion, of which approximately CA$391 billion originated from the United
States, CA$216 billion from non-U.S. sources.[41] In 2018, Canada had a trade deficit in
goods of CA$22 billion and a trade deficit in services of CA$25 billion.[41] Canada is
unusual among developed countries in the importance of the primary sector, with
the logging and energy industries being two of Canada's most important. Canada also
has a sizable manufacturing sector, based in Central Canada, with the automobile
industry and aircraft industry being especially important. With the world's longest
coastline, Canada has the eighth-largest commercial fishing and seafood industry in the
world.[42][43] Canada is one of the global leaders of the entertainment software industry.[44] It
is a member of the APEC, G7, G20, OECD and WTO, and was formerly a member
of NAFTA until the USMCA came into force in 2020. In Canada, the USMCA is officially
 known as the Canada–United States–Mexico Agreement (CUSMA) in English and the
Accord Canada–États-Unis–Mexique (ACEUM) in French.

Contents

 1Overview
o 1.1Data
o 1.2Unemployment rate
o 1.3Export trade
o 1.4Import trade
 2Measuring productivity
o 2.1Multifactor productivity
 3Bank of Canada
o 3.1Monetary Policy Report
o 3.2Inflation targeting
 4Key industries
o 4.1Service sector
o 4.2Manufacturing
 4.2.1Steel
o 4.3Mining
o 4.4Energy
 4.4.1Electricity
 4.4.2Oil and Gas
o 4.5Agriculture
 5Free-trade agreements
o 5.1Free-trade agreements in force
o 5.2Free-trade agreements no longer in force
o 5.3Ongoing free-trade agreements negotiations
 6Political issues
o 6.1Relations with the U.S.
 7Debt
o 7.1Canadian Government Debt
o 7.2Household Debt
 8Mergers and Acquisition
 9See also
 10Notes
 11References
 12Further reading
 13External links

Overview[edit]
Further information: Economic history of Canada

Part of a series on the

Economy of Canada

Economic history of Canada

 Banking history
 Petroleum history
 Energy policy of Canada
 Canadian dollar

Sectors

Primary sector
 Agriculture
 Energy 
o Petroleum
o Electricity
 Mining
 Fishing
 Forestry
Secondary sector
 Automotives
Tertiary sector
 Social programs
 Transportation
 Tourism
Finance
 Central Bank
 Banking in Canada
 Stock exchanges
Companies
 Companies listed on the TSX

Economy by province
  Alberta
 Ontario
 Quebec
 Saskatchewan
 more...

Economy by city
 Montreal
 Toronto
 Vancouver
 more...

 v
 t
 e

With the exception of a few island nations in the Caribbean, Canada is the only major
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.[45] 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 social welfare system to redress social and economic
inequities, were adopted after the end of World War II in 1945.[45]
Approximately 89% of Canada's land is Crown land.[46] 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. [47] As of 2019, Canada
has 56 companies in the Forbes Global 2000 list, ranking ninth just behind South Korea
and ahead of Saudi Arabia.[48]

Tree-map of Canada's goods exports in 2019

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. [49] Machinery, equipment, automotive products
and other manufactures accounted for a further 38% of exports in 2009. [49] 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.[50] Canada's combined exports and imports ranked 8th among all nations in 2006. [51]
About 4% of Canadians are directly employed in primary resource fields, and they
account for 6.2% of GDP.[52] 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 business.
The reliance on natural resources has several effects on the Canadian economy and
Canadian society. While manufacturing and service industries are easy to standardize,
natural resources vary greatly by region. This ensures that differing economic structures
developed in each region of Canada, contributing to Canada's strong regionalism. At the
same time the vast majority of these resources are exported, integrating Canada closely
into the international economy. Howlett and Ramesh argue that the inherent instability
of such industries also contributes to greater government intervention in the economy,
to reduce the social impact of market changes.[53]
Natural resource industries also raise important questions of sustainability. Despite
many decades as a leading producer, there is little risk of depletion. Large discoveries
continue to be made, such as the massive nickel find at Voisey's Bay. 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 industry, after many years
of activism, has in recent years moved to a more sustainable model, or to other
countries.
Data[edit]
The following table shows the main economic indicators in 1980–2021 (with IMF staff
estimates for 2022–2027). Inflation below 5% is in green. [54]
GDP GDP
GDP Inflation Unemploymen Government
GDP per GDP per
growth rate t debt
Year capita (in Bil.
capita
(in Bil. US$nominal) (in
(in US$ (in US$ (real) (in Percent) (in % of GDP)
US$PPP) Percent)
PPP) nominal)

1980 288.7 11,798.2 276.1 11,281.4 2.2% 10.2% 7.5% 44.6%

13,197 12,396
1981 327.1 307.2 3.5% 12.5% 7.6% 46.1%
.5 .7
13,404 12,543
1982 336.2 314.6 -3.2% 10.8% 11.1% 51.7%
.9 .9
14,149 13,493
1983 358.5 341.9 2.6% 5.8% 12.0% 57.2%
.5 .2
15,380 13,947
1984 393.4 356.7 5.9% 4.3% 11.4% 60.2%
.2 .4
16,466 14,185
1985 425.0 366.2 4.7% 4.0% 10.5% 65.2%
.0 .9
16,990 14,539
1986 442.9 379.0 2.1% 4.2% 9.6% 69.3%
.4 .8
17,893 16,408
1987 472.3 433.1 4.1% 4.4% 8.8% 69.8%
.0 .1
19,085 19,041
1988 510.6 509.4 4.4% 4.0% 7.8% 69.7%
.3 .2
19,947 20,842
1989 542.9 567.2 2.3% 5.0% 7.5% 71.0%
.7 .5
20,415 21,572
1990 564.1 596.1 0.2% 4.8% 8.2% 73.7%
.1 .1
20,403 21,885
1991 571.0 612.5 -2.1% 5.6% 10.3% 81.7%
.3 .6
20,805 20,984
1992 589.3 594.4 0.9% 1.5% 11.2% 88.2%
.6 .8
21,615 20,210
1993 619.3 579.1 2.7% 1.9% 11.4% 94.7%
.6 .5
22,823 20,024
1994 661.0 579.9 4.5% 0.2% 10.4% 97.5%
.8 .6
23,682 20,706
1995 693.0 605.9 2.7% 2.1% 9.5% 100.1%
.4 .7
 24,252 21,325
1996 717.1 630.6 1.6% 1.6% 9.6% 100.2%
.2 .7
25,469 21,930
1997 760.7 655.0 4.3% 1.6% 9.1% 95.3%
.8 .5
26,532 21,046
1998 799.3 634.0 3.9% 1.0% 8.3% 93.3%
.4 .6
28,068 22,340
1999 852.4 678.4 5.2% 1.7% 7.6% 89.0%
.8 .6
29,914 24,296
2000 916.8 744.6 5.2% 2.7% 6.8% 80.4%
.7 .7
30,810 23,859
2001 954.2 739.0 1.8% 2.5% 7.2% 81.5%
.5 .7
31,887 24,279
2002 998.4 760.1 3.0% 2.3% 7.7% 79.6%
.8 .2
1,036. 32,794 28,338
2003 895.6 1.8% 2.8% 7.6% 75.9%
4 .3 .7
1,097. 34,390 32,176
2004 1,026.5 3.1% 1.9% 7.2% 71.9%
1 .0 .6
1,167. 36,260 36,439
2005 1,173.5 3.2% 2.2% 6.8% 70.6%
7 .7 .6
1,235. 37,980 40,558
2006 1,319.4 2.6% 2.0% 6.3% 69.9%
5 .7 .9
1,295. 39,428 44,717
2007 1,468.9 2.1% 2.1% 6.1% 66.9%
2 .2 .0
1,333. 40,159 46,773
2008 1,552.9 1.0% 2.4% 6.2% 67.9%
3 .1 .8
1,302. 38,788 40,990
2009 1,376.5 -2.9% 0.3% 8.4% 79.3%
5 .0 .6
1,358. 40,017 47,627
2010 1,617.3 3.1% 1.8% 8.1% 81.2%
9 .6 .3
1,430. 41,716 52,285
2011 1,793.3 3.1% 2.9% 7.6% 81.8%
8 .4 .9
1,468. 42,351 52,744
2012 1,828.4 1.8% 1.5% 7.4% 85.4%
1 .1 .0
1,554. 44,360 52,708
2013 1,846.6 2.3% 0.9% 7.1% 86.1%
1 .4 .6
1,621. 45,812 51,020
2014 1,805.8 2.9% 1.9% 7.0% 85.6%
4 .0 .8
1,594. 44,702 43,626
2015 1,556.5 0.7% 1.1% 6.9% 91.2%
9 .5 .5
2016 1,678. 46,554 1,528.0 42,382 1.0% 1.4% 7.1% 91.8%
 4 .1 .6
1,776. 48,688 45,192
2017 1,649.3 3.0% 1.6% 6.4% 88.9%
9 .1 .0
1,869. 50,531 46,625
2018 1,725.3 2.8% 2.3% 5.9% 88.9%
8 .6 .9
1,939. 51,652 46,404
2019 1,742.0 1.9% 1.9% 5.8% 87.2%
0 .6 .0
1,859. 48,946 43,306
2020 1,645.4 -5.2% 0.7% 9.6% 117.8%
7 .8 .6
2,025. 52,973 52,015
2021 1,988.3 4.5% 3.4% 7.4% 112.9%
0 .0 .1
2,240. 57,827 56,794
2022 2,200.4 3.3% 6.9% 5.3% 102.2%
4 .5 .0
2,353. 59,872 59,179
2023 2,326.6 1.5% 4.2% 5.9% 98.7%
9 .2 .0
2,441. 61,274 60,745
2024 2,420.7 1.6% 2.4% 6.2% 96.3%
8 .7 .3
2,544. 63,042 62,703
2025 2,531.2 2.3% 1.9% 6.1% 93.3%
9 .6 .5
2,642. 64,649 64,352
2026 2,630.3 1.9% 1.9% 6.0% 90.9%
5 .4 .5
2,739. 66,221 65,954
2027 2,728.4 1.7% 2.0% 6.0% 88.7%
4 .6 .5

Unemployment rate[edit]
Unemployment rate
Province percentage of labour force
as of March 2022[55]

Alberta 4.9

British Columbia 4.6

Manitoba 5.3

Newfoundland and
9.9
Labrador
 Unemployment rate
Province percentage of labour force
as of March 2022[55]

New Brunswick 6.1

Nova Scotia 7.0

Ontario 5.1

Prince Edward Island 4.9

Quebec 4.3

Saskatchewan 3.9

Canada (national) 4.9

Export trade[edit]
See also: List of the largest trading partners of Canada
Export trade from Canada measured in US dollars. In 2021, Canada exported
US$503.4 billion.
That dollar amount reflects a 19.5% gain since 2017 and a 29.1% increase from 2020 to
2021.[56]

Partner Value Fraction

United States $380.4 billion 75.6%

China $23 billion 4.6%

United
$12.9 billion 2.6%
Kingdom
 Partner Value Fraction

Japan $11.5 billion 2.3%

Mexico $6.5 billion 1.3%

Germany $5.5 billion 1.1%

South Korea $4.5 billion 0.9%

Netherlands $3.8 billion 0.8%

France $3.2 billion 0.6%

Belgium $3.0 billion 0.6%

Hong Kong $2.8 billion 0.6%

Norway $2.5 billion 0.5%

Switzerland $1.6 billion 0.5%

India $2.35 billion 0.5%

Italy $2.1 billion 0.4%

Import trade[edit]
Import trade in 2017 measured in US dollars. [57]
 Partner Value Fraction

United States $222.0 billion 51.3%

China $54.7 billion 12.7%

Mexico $27.4 billion 6.3%

Germany $13.8 billion 3.2%

Japan $13.5 billion 3.1%

United
$6.9 billion 1.6%
Kingdom

South Korea $6.7 billion 1.5%

Italy $6.3 billion 1.5%

France $4.8 billion 1.1%

Vietnam $3.9 billion 0.9%

Measuring productivity[edit]
Productivity measures are key indicators of economic performance and a key source of
economic growth and competitiveness. The Organisation for Economic Co-operation
and Development (OECD)'s[notes 1] Compendium of Productivity Indicators,[58] published
annually, presents a broad overview of productivity levels and growth in member
nations, highlighting key measurement issues. It analyses the role of "productivity as the
main driver of economic growth and convergence" and the "contributions of labour,
capital and MFP in driving economic growth". [58] According to the definition above "MFP
is often interpreted as the contribution to economic growth made by factors such as
technical and organisational innovation" (OECD 2008,11). Measures of productivity
include Gross Domestic Product (GDP)(OECD 2008,11) and multifactor productivity.
Multifactor productivity[edit]
Another productivity measure, used by the OECD, is the long-term trend in multifactor
productivity (MFP) also known as total factor productivity (TFP). This indicator assesses
an economy's "underlying productive capacity ('potential output'), itself an important
measure of the growth possibilities of economies and of inflationary pressures". MFP
measures the residual growth that cannot be explained by the rate of change in the
services of labour, capital and intermediate outputs, and is often interpreted as the
contribution to economic growth made by factors such as technical and organisational
innovation. (OECD 2008,11)
According to the OECD's annual economic survey of Canada in June 2012, Canada has
experienced weak growth of multi-factor productivity (MFP) and has been declining
further since 2002. One of the ways MFP growth is raised is by boosting innovation and
Canada's innovation indicators such as business R&D and patenting rates were poor.
Raising MFP growth is "needed to sustain rising living standards, especially as the
population ages".[59]
Since 2010 productivity growth has picked up, almost entirely driven by above average
multifactor productivity growth.[60] However, productivity on the whole still lags behind the
upper half of OECD countries such as the United States. [61] Canada's productivity is now
around the median OECD productivity, close to that of Australia. More can be done to
increase productivity, such as increasing the productivity of capital through improving
the capital stock to output ratio and capital quality. This could be achieved through the
liberalization of internal trade barriers, as suggested in the OECD's latest Canadian
economic survey.[62]

Bank of Canada[edit]
The mandate of the central bank—the Bank of Canada is to conduct monetary policy
that "preserves the value of money by keeping inflation low and stable". [63][64]
Monetary Policy Report[edit]
The Bank of Canada issues its bank rate announcement through its Monetary Policy
Report which is released eight times a year.[64] The Bank of Canada, a federal crown
corporation, has the responsibility of Canada's monetary system. [65] Under the inflation-
targeting monetary policy that has been the cornerstone of Canada's monetary and
fiscal policy since the early 1990s, the Bank of Canada sets an inflation target [64][66] The
inflation target was set at 2 per cent, which is the midpoint of an inflation range of 1 to 3
per cent. They established a set of inflation-reduction targets to keep inflation "low,
stable and predictable" and to foster "confidence in the value of money", contribute to
Canada's sustained growth, employment gains and improved standard of living. [64]
In a January 9, 2019 statement on the release of the Monetary Policy Report, Bank of
Canada Governor Stephen S. Poloz summarized major events since the October report,
such as "negative economic consequences" of the US-led trade war with China. In
response to the ongoing trade war "bond yields have fallen, yield curves have flattened
even more and stock markets have repriced significantly" in "global financial markets".
In Canada, low oil prices will impact Canada's "macroeconomic outlook". Canada's
housing sector is not stabilizing as quickly as anticipated. [67]
Inflation targeting[edit]
During the period that John Crow was Governor of the Bank of Canada—1987 to 1994
— there was a worldwide recession and the bank rate rose to around 14% and
unemployment topped 11%.[65] Although since that time inflation-targeting has been
adopted by "most advanced-world central banks",[68] in 1991 it was innovative and
Canada was an early adopter when the then-Finance Minister Michael Wilson approved
the Bank of Canada's first inflation-targeting in the 1991 federal budget. [68] The inflation
target was set at 2 per cent.[64] Inflation is measured by the total consumer price
index (CPI). In 2011 the Government of Canada and the Bank of Canada extended
Canada's inflation-control target to December 31, 2016. [64] The Bank of Canada uses
three unconventional instruments to achieve the inflation target: "a conditional statement
on the future path of the policy rate", quantitative easing, and credit easing.[69]
As a result, interest rates and inflation eventually came down along with the value of the
Canadian dollar.[65] From 1991 to 2011 the inflation-targeting regime kept "price gains
fairly reliable".[68]
Following the Financial crisis of 2007–08 the narrow focus of inflation-targeting as a
means of providing stable growth in the Canadian economy was questioned. By 2011,
the then-Bank of Canada Governor Mark Carney argued that the central bank's
mandate would allow for a more flexible inflation-targeting in specific situations where
he would consider taking longer "than the typical six to eight quarters to return inflation
to 2 per cent".[68]
On July 15, 2015, the Bank of Canada announced that it was lowering its target for the
overnight rate by another one-quarter percentage point, to 0.5 per cent [70] "to try to
stimulate an economy that appears to have failed to rebound meaningfully from the oil
shock woes that dragged it into decline in the first quarter". [71] According to the Bank of
Canada announcement, in the first quarter of 2015, the total Consumer price
index (CPI) inflation was about 1 per cent. This reflects "year-over-year price declines
for consumer energy products". Core inflation in the first quarter of 2015 was about 2
per cent with an underlying trend in inflation at about 1.5 to 1.7 per cent. [70]
In response to the Bank of Canada's July 15, 2015 rate adjustment, Prime
Minister Stephen Harper explained that the economy was "being dragged down by
forces beyond Canadian borders such as global oil prices, the European debt crisis, and
China's economic slowdown" which has made the global economy "fragile". [72]
The Chinese stock market had lost about US$3 trillion of wealth by July 2015 when
panicked investors sold stocks, which created declines in the commodities markets,
which in turn negatively impacted resource-producing countries like Canada. [73]
The Bank's main priority has been to keep inflation at a moderate level. [74] As part of that
strategy, interest rates were kept at a low level for almost seven years. Since
September 2010, the key interest rate (overnight rate) was 0.5%. In mid 2017, inflation
remained below the Bank's 2% target, (at 1.6%) [75] mostly because of reductions in the
cost of energy, food and automobiles; as well, the economy was in a continuing spurt
with a predicted GDP growth of 2.8 percent by year end. [76][77] Early on July 12, 2017, the
bank issued a statement that the benchmark rate would be increased to 0.75%.
Following the COVID-19 pandemic, critics have pointed out that the Bank of Canada’s
inflation-targeting has had unintended consequences, such as fuelling an increase in
home prices and contributing to wealth inequalities by supporting higher equity values. [78]

Key industries[edit]
In 2020, the Canadian economy had the following relative weighting by the industry as a
percentage value of GDP:[79]

Industry Share of GDP

Real estate and rental and leasing 13.01%

Manufacturing 10.37%

Mining, quarrying, and oil and gas extraction 8.21%

Finance and insurance 7.06%

Construction 7.08%

Health care and social assistance 6.63%

Public administration 6.28%

Wholesale trade 5.78%

Retail trade 5.60%

Professional, scientific and technical services 5.54%

Educational services 5.21%

Transportation and warehousing 4.60%

Information and cultural industries 3.00%

Administrative and support, waste management, and remediation

2.46%
services

Utilities 2.21%

Accommodation and food services 2.15%

Other services (except public administration) 1.89%

Agriculture, forestry, fishing, and hunting 1.53%

Arts, entertainment and recreation 0.77%

Management of companies and enterprises 0.62%

Service sector[edit]
The service sector in Canada is vast and multifaceted, employing about three quarters
of Canadians and accounting for 70% of GDP.[80] The largest employer is
the retail sector, employing almost 12% of Canadians.[81] The retail industry is
concentrated mainly in a small number of chain stores clustered together in shopping
malls. In recent years, there has been an increase in the number of big-box stores, such
as Wal-Mart (of the United States), Real Canadian Superstore, and Best Buy (of the
United States). This has led to fewer workers in this sector and the migration of retail
jobs to the suburbs.
The Financial District in Downtown Vancouver. Canadian business services are largely concentrated in large
urban areas of Canada.

The second-largest portion of the service sector is the business service, and it employs
only a slightly smaller percentage of the population. [82] This includes the financial
services, real estate, and communications industries. This portion of the economy has
been rapidly growing in recent years. It is largely concentrated in the major urban
centres, especially Toronto, Montreal and Vancouver (see Banking in Canada).
The education and health sectors are two of Canada's largest, but both are primarily
under the influence of the government. The health care industry has been quickly
growing and is the third-largest in Canada. Its rapid growth has led to problems for
governments who must find money to fund it.
Canada has an important high tech industry,[83] and a burgeoning film, television, and
entertainment industry creating content for local and international consumption
(see Media in Canada).[84] Tourism is of ever increasing importance, with the vast
majority of international visitors coming from the United States. Casino gaming is
currently the fastest-growing component of the Canadian tourism industry, contributing
$5 billion in profits for Canadian governments and employing 41,000 Canadians as of
2001.[85]
Manufacturing[edit]

Ford's Oakville Assembly in the Greater Toronto Area. Central Canada is home to several auto factories of the
major American and Japanese automakers.

The general pattern of development for wealthy nations was a transition from a raw

material production-based economy to a manufacturing-based economy and then to a
service-based economy. At its World War II peak in 1944, Canada's manufacturing
sector accounted for 29% of GDP,[86] declining to 10.37% in 2017.[79] Canada has not
suffered as greatly as most other rich, industrialized nations from the pains of the
relative decline in the importance of manufacturing since the 1960s. [86] A 2009 study
by Statistics Canada also found that, while manufacturing declined as a relative
percentage of GDP from 24.3% in the 1960s to 15.6% in 2005, manufacturing volumes
between 1961 and 2005 kept pace with the overall growth in the volume index of GDP.
[87]
 Manufacturing in Canada was especially hit hard by the financial crisis of 2007–08. As
of 2017, manufacturing accounts for 10% of Canada's GDP, [79] a relative decline of more
than 5% of GDP since 2005.
Central Canada is home to branch plants to all the major American and Japanese
automobile makers and many parts factories owned by Canadian firms such as Magna
International and Linamar Corporation.
Steel[edit]

ArcelorMittal Dofasco, view from Burlington Street

Canada was the world's nineteenth-largest steel exporter in 2018. In year-to-date 2019
(through March), further referred to as YTD 2019, Canada exported 1.39 million metric
tons of steel, a 22 percent decrease from 1.79 million metric tons in YTD 2018. Based
on available data, Canada's exports represented about 1.5 percent of all steel exported
globally in 2017. By volume, Canada's 2018 steel exports represented just over one-
tenth the volume of the world's largest exporter, China. In value terms, steel
represented 1.4 percent of the total goods Canada exported in 2018. The growth in
exports in the decade since 2009 has been 29%. The largest producers in 2018
were ArcelorMittal, Essar Steel Algoma, and the first of those alone accounted for
roughly half of Canadian steel production through its two subsidiaries. The top two
markets for Canada's exports were its NAFTA partners, and by themselves accounted
for 92 percent of exports by volume. Canada sent 83 percent of its steel exports to the
United States in YTD 2019. The gap between domestic demand and domestic
production increased to -2.4 million metric tons, up from -0.2 million metric tons in YTD
2018. In YTD 2019, exports as a share of production decreased to 41.6 percent from 53
percent in YTD 2018.[88]
In 2017, heavy industry accounted for 10.2% of Canada's Greenhouse gas emissions. [89]
Mining[edit]
Main article: Mining in Canada
Canada is one of the largest producers of metals (as of 2019):

metal world rank source

platinum 4 [90]
 metal world rank source

gold 5 [91]

nickel 5 [92]

copper 10 [93]

iron (ore
8 [94]

titanium 4 [95]

potash 1 [96]

niobium 2 [97]

In 2019, the country was also the 4th largest world producer of sulfur;[98] the world's 7th
largest producer of molybdenum;[99] the 7th worldwide producer of cobalt;[100] the 8th
largest world producer of lithium;[101] the 8th largest world producer of zinc;[102] the 13th
largest world producer of gypsum;[103] the 14th worldwide producer of antimony;[104] the
world's 10th largest producer of graphite;[105] in addition to being the 6th largest world
producer of salt.[106] It was the 2nd largest producer in the world of uranium in 2018.[107]
Energy[edit]
Main article: Energy in Canada
Canada has access to cheap sources of energy because of its geography. This has
enabled the creation of several important industries, such as the
large aluminum industries in British Columbia[108] and Quebec.[109] Canada is also one of
the world's highest per capita consumers of energy. [110][111]
Electricity[edit]
Main article: Electricity sector in Canada
The electricity sector in Canada has played a significant role in the economic and
political life of the country since the late 19th century. The sector is organized along
provincial and territorial lines. In a majority of provinces, large government-
owned integrated public utilities play a leading role in
the generation, transmission and distribution of electricity. Ontario and Alberta have
created electricity markets in the last decade in order to increase investment and
competition in this sector of the economy. In 2017, the electricity sector accounted for
10% of total national greenhouse gas emissions. [112] Canada has substantial electricity
trade with the neighbouring United States amounting to 72 TWh exports and 10 TWh
imports in 2017.
Hydroelectricity accounted for 59% of all electric generation in Canada in 2016,
[113]
 making Canada the world's second-largest producer of hydroelectricity after China.
[114]
 Since 1960, large hydroelectric projects, especially in Quebec, British
Columbia, Manitoba and Newfoundland and Labrador, have significantly increased the
country's generation capacity.
The second-largest single source of power (15% of the total) is nuclear power, with
several plants in Ontario generating more than half of that province's electricity and one
generator in New Brunswick. This makes Canada the world's sixth-largest electricity
producer generated by nuclear power, producing 95 TWh in 2017. [115]
Fossil fuels provide 19% of Canadian electric power, about half as coal (9% of the total),
and the remainder a mix of natural gas and oil. Only five provinces use coal for
electricity generation. Alberta, Saskatchewan, and Nova Scotia rely on coal for nearly
half of their generation, while other provinces and territories use little or none. Alberta
and Saskatchewan also use a substantial amount of natural gas. Remote communities,
including all of Nunavut and much of the Northwest Territories, produce most of their
electricity from diesel generators at high economic and environmental costs. The federal
government has set up initiatives to reduce dependence on diesel-fired electricity. [116]
Non-hydro renewables are a fast-growing portion of the total, at 7% in 2016. [citation needed]
Oil and Gas[edit]
See also: Petroleum production in Canada

Syncrude's Mildred Lake plant site at the Athabasca oil sands in Alberta.

Canada possesses extensive oil and gas resources centered in Alberta, and the
Northern Territories but is also present in neighboring British
Columbia and Saskatchewan. The vast Athabasca oil sands give Canada the world's
third-largest reserves of oil after Saudi Arabia and Venezuela, according to USGS. The
oil and gas industry represents 27% of Canada's total greenhouse gas emissions, an
increase of 84% since 1990, mostly due to the development of the oil sands. [112]
Historically, an important issue in Canadian politics is the interplay between the oil and
energy industry in Western Canada and the industrial heartland of Southern Ontario.
Foreign investment in Western oil projects has fueled Canada's rising dollar. This has
raised the price of Ontario's manufacturing exports and made them less competitive, a
problem similar to the decline of the manufacturing sector in the Netherlands.[117][118]
The National Energy Policy of the early 1980s attempted to make Canada oil-sufficient
and to ensure equal supply and price of oil in all parts of Canada, especially for the
eastern manufacturing base.[119] This policy proved deeply divisive as it forced Alberta to
sell low-priced oil to eastern Canada.[120] The policy was eliminated 5 years after it was
first announced amid a collapse of oil prices in 1985. The new Prime Minister Brian
Mulroney had campaigned against the policy in the 1984 Canadian federal election.
One of the most controversial sections of the Canada–United States Free Trade
Agreement of 1988 was a promise that Canada would never charge the United States
more for energy than fellow Canadians.[89]
Agriculture[edit]

An inland grain terminal along the Yellowhead Highway in Saskatchewan.

Main article: Agriculture in Canada

Canada is also one of the world's largest suppliers of agricultural products, particularly
wheat and other grains.[121] Canada is a major exporter of agricultural products, to the
United States and Asia. As with all other developed nations, the proportion of the
population and GDP devoted to agriculture fell dramatically over the 20th century. The
agriculture and agri-food manufacturing sector created $49.0 billion to Canada's GDP in
2015, accounting for 2.6% of total GDP.[122] This sector also accounts for 8.4% of
Canada's Greenhouse gas emissions.[89]
The Canadian agriculture industry receives significant government subsidies and
support as with other developed nations. However, Canada has strongly supported
reducing market influencing subsidies through the World Trade Organization. In 2000,
Canada spent approximately CDN$4.6 billion on support for the industry. $2.32 billion
was classified under the WTO designation of "green box" license, meaning it did not
directly influence the market, such as money for research or disaster relief. All but
$848.2 million were subsidies worth less than 5% of the value of the crops they were
provided for.

Free-trade agreements[edit]
Main article: Free-trade agreements of Canada

  Canada
  Free-trade areas

Free-trade agreements in force[edit]

Source:[123]

 Canada–Israel Free Trade Agreement (Entered into force January 1, 1997,

modernization ongoing)
 Canada–Chile Free Trade Agreement (Entered into force July 5, 1997)
 Canada–Costa Rica Free Trade Agreement (Entered into force November 1,
2002, modernization ongoing)
 Canada–European Free Trade Association Free Trade Agreement  (Iceland,
Norway, Switzerland and Liechtenstein; entered into force July 1, 2009)
 Canada–Peru Free Trade Agreement (Entered into force August 1, 2009)
 Canada–Colombia Free Trade Agreement (Signed November 21, 2008, entered
into force August 15, 2011; Canada's ratification of this FTA had been
dependent upon Colombia's ratification of the "Agreement Concerning Annual
Reports on Human Rights and Free Trade Between Canada and the Republic of
Colombia" signed on May 27, 2010)
 Canada–Jordan Free Trade Agreement (Signed on June 28, 2009, entered into
force October 1, 2012)
 Canada–Panama Free Trade Agreement (Signed on May 14, 2010, entered into
force April 1, 2013)
 Canada–South Korea Free Trade Agreement (Signed on March 11, 2014,
entered into force January 1, 2015)
 Canada–Ukraine Free Trade Agreement  (Signed 11 July 2016, entered into force
August 1, 2017)
 Comprehensive and Progressive Agreement for Trans-Pacific
Partnership (signed March 8, 2018, entered into force December 30, 2018)
 Canada-United States-Mexico Agreement  (Signed November 30, 2018, entered
into force July 1, 2020)
Free-trade agreements no longer in force[edit]
Source:[123]

 Canada–U.S. Free Trade Agreement (Signed October 12, 1987, entered into

force January 1, 1989, later superseded by NAFTA)
 Trans-Pacific Partnership (concluded October 5, 2015, superseded by
CPTPP)
 North American Free Trade Agreement  (Entered into force January 1, 1994,
later superseded by CUSMA)
 Comprehensive Economic and Trade Agreement (concluded August 5, 2014)
Ongoing free-trade agreements negotiations[edit]
Source:[124]
Canada is negotiating bilateral FTAs with the following countries respectively
trade blocs:

 Caribbean Community (CARICOM)

 Guatemala, Nicaragua and El Salvador
 Dominican Republic
 India
 Japan[125]
 Morocco
 Singapore
 Andean Community (FTA's are already in force with Peru and Colombia)
Canada has been involved in negotiations to create the following regional
trade blocks:

 Canada and Central American Free Trade Agreement

 Free Trade Area of the Americas (FTAA)

Political issues[edit]
Relations with the U.S.[edit]
Main article: Canada–United States trade relations
Canada and the United States share a common trading relationship.
Canada's job market continues to perform well along with the US, reaching a
30-year low in the unemployment rate in December 2006, following 14
consecutive years of employment growth.[126]
 Flags of Canada and the United States

The United States is by far Canada's largest trading partner, with more than
$1.7 billion CAD in trade per day in 2005.[127] In 2009, 73% of Canada's
exports went to the United States, and 63% of Canada's imports were from
the United States.[128] Trade with Canada makes up 23% of the United States'
exports and 17% of its imports.[129] By comparison, in 2005 this was more than
U.S. trade with all countries in the European Union combined,[130] and well
over twice U.S. trade with all the countries of Latin America combined.[131] Just
the two-way trade that crosses the Ambassador
Bridge between Michigan and Ontario equals all U.S. exports to Japan.
Canada's importance to the United States is not just a border-state
phenomenon: Canada is the leading export market for 35 of 50 U.S. states,
and is the United States' largest foreign supplier of energy.
Bilateral trade increased by 52% between 1989, when the U.S.–Canada Free
Trade Agreement (FTA) went into effect, and 1994, when the North American
Free Trade Agreement (NAFTA) superseded it.[citation needed] Trade has since
increased by 40%. NAFTA continues the FTA's moves toward reducing trade
barriers and establishing agreed-upon trade rules. It also resolves some
long-standing bilateral irritants and liberalizes rules in several areas,
including agriculture, services, energy, financial services, investment, and
government procurement. NAFTA forms the largest trading area in the world,
embracing the 405 million people of the three North American countries.
The largest component of U.S.–Canada trade is in the commodity sector.
The U.S. is Canada's largest agricultural export market, taking well over half
of all Canadian food exports.[132] Nearly two-thirds of Canada's forest products,
including pulp and paper, are exported to the United States; 72% of
Canada's total newsprint production also is exported to the U.S.
At $73.6 billion in 2004, U.S.-Canada trade in energy is the largest U.S.
energy trading relationship, with the overwhelming majority ($66.7 billion)
being exports from Canada. The primary components of U.S. energy trade
with Canada are petroleum, natural gas, and electricity. Canada is the United
States' largest oil supplier and the fifth-largest energy producing country in
the world. Canada provides about 16% of U.S. oil imports and 14% of total
U.S. consumption of natural gas. The United States and Canada's national
electricity grids are linked, and both countries share hydropower facilities on
the western borders.
While most of U.S.-Canada trade flows smoothly, there are occasionally
bilateral trade disputes, particularly in the agricultural and cultural fields. [citation
needed]
 Usually these issues are resolved through bilateral consultative forums or
referral to World Trade Organization (WTO) or NAFTA dispute resolution.[citation
needed]
 In May 1999, the U.S. and Canadian governments negotiated an
agreement on magazines that provides increased access for the
U.S. publishing industry to the Canadian market. The United States and
Canada also have resolved several major issues involving fisheries. By
common agreement, the two countries submitted a Gulf of Maine boundary
dispute to the International Court of Justice in 1981; both accepted the
court's October 12, 1984 ruling which demarcated the territorial sea
boundary. A current issue between the United States and Canada is the
ongoing softwood lumber dispute, as the U.S. alleges that Canada unfairly
subsidizes its forestry industry.[citation needed]
In 1990, the United States and Canada signed a bilateral Fisheries
Enforcement Agreement, which has served to deter illegal fishing activity and
reduce the risk of injury during fisheries enforcement incidents. The U.S. and
Canada signed a Pacific Salmon Agreement in June 1999 that settled
differences over implementation of the 1985 Pacific Salmon Treaty for the
next decade.[133]
Canada and the United States signed an aviation agreement during Bill
Clinton's visit to Canada in February 1995, and air traffic between the two
countries has increased dramatically as a result. The two countries also
share in operation of the St. Lawrence Seaway, connecting the Great
Lakes to the Atlantic Ocean.[134]
The U.S. remains Canada's largest foreign investor and the most popular
destination for Canadian foreign investments. In 2018, the stock of U.S.
direct investment in Canada totaled $406 billion, while the stock of Canadian
investment in the U.S. totaled $595 billion, or 46% of the overall CDIA stock
for 2018.[135][136] This made Canada the second largest investing country in the
U.S. for 2018[137] US investments are primarily directed at
Canada's mining and smelting industries, petroleum, chemicals, the
manufacture of machinery and transportation equipment, and finance, while
Canadian investment in the United States is concentrated in manufacturing,
wholesale trade, real estate, petroleum, finance, insurance and other
services.[138]

Debt[edit]

Canada bonds
Inverted yield curve in 2006 - 2007 and 2019
  30 year
  10 year
  2 year
  1 year
  3 month
   1 month

Canadian Government Debt[edit]

Canadian government debt, also called Canada's public debt, is the liabilities
of the government sector. For 2019 (the fiscal year ending 31 March 2020),
total financial liabilities or gross debt was $2434 billion for the consolidated
Canadian general government (federal, provincial, territorial, and local
governments combined). This corresponds to 105.3% as a ratio of GDP
(GDP was $2311 billion).[139] Of the $2434 billion, $1146 billion or 47% was
federal (central) government liabilities (49.6% as a ratio of GDP). Provincial
government liabilities comprise most of the remaining liabilities. [139]
Some critics have raised concerns about the rising cost of servicing the
Canadian government debt, saying that, despite historically low interest
rates, interest payments on the public debt are expected to increase by
59.4% in 2021.[140]
Household Debt[edit]
Household debt, the amount of money that all adults in the household owe
financial institutions, includes consumer debt and mortgage loans. In March
2015, the International Monetary Fund reported that Canada's high
household debt was one of two vulnerable domestic areas in Canada's
economy; the second is its overheated housing market.[141]
According to Statistics Canada, total household credit as of July 2019 was
CAD$2.2 trillion.[142] According to Philip Cross of the Fraser Institute, in May
2015, while the Canadian household debt-to-income ratio is similar to that in
the US, however lending standards in Canada are tighter than those in the
United States to protect against high-risk borrowers taking out unsustainable
debt.[143]

Mergers and Acquisition[edit]

See also: List of largest companies of Canada
Since 1985, 63,755 deals in- and outbound Canada have been announced,
[when?]
 with an overall value of US$3.7 billion.[144] Almost 50% of the targets of
Canadian companies (outbound deals) have a parent company in the US.
Inbound deals are 82% percent from the US.
Here is a list of the biggest deals in Canadian history: [144]

Value
Date Acquiror Target
Rank Acquiror name Target name (in bil.
announced nation nation
USD)

1 January 26, Spin-off Canada Nortel Canada 59.97

 2000 Networks Corp

June 20,
2 Vivendi SA France Seagram Co Ltd Canada 40.43
2000

Rio Tinto
December 7,
3 Canada Canada Alcan Inc Canada 37.63
2007
Holdings Inc

Spectra Energy United

4 June 9, 2016 Enbridge Inc Canada 28.29
Corp States

March 12, Enbridge Enbridge Inc-

5 Canada Canada 24.79
2014 Income Fund Liquids

November 5, Cenovus Energy

6 Shareholders Canada Canada 20.26
2008 Inc

July 23, CNOOC Canada

7 Canada Nexen Inc Canada 19.12
2012 Holding Ltd

May 15, Falconbridge

8 Xstrata PLC Switzerland Canada 17.40
2006 Ltd

November 8, Cia Vale do Rio

9 Brazil Inco Ltd Canada 17.15
2006 Doce SA

March 23, Suncor Energy

10 Canada Petro-Canada Canada 15.58
2009 Inc

Fording
July 29, Teck Cominco
11 Canada Canadian Coal Canada 13.60
2008 Ltd
Trust

See also[edit]
 Canada portal
BC
AB
SK
MB
ON
QC
NB
PE
NS
NL
YT
NT
NU

Economy by province

 Canada's Global Markets Action Plan

 Comparison of Canadian and American economies
 Economy of Alberta
 Economy of Ontario
 Economy of Quebec
 Economy of Saskatchewan
 History of the petroleum industry in Canada
 List of Median household income of cities in Canada
 List of Commonwealth of Nations countries by GDP
 List of Canadian provinces and territories by gross domestic product

Notes[edit]
1. ^ The OECD produces an annual report on member nations who share the goal of
"contributing to the development of the world economy" by attaining the "highest
sustainable economic growth and employment and a rising standard of living while
maintaining financial stability."
 1. ^ figures are for gross general government debt, as opposed to net federal debt; gross
general government debt includes both intragovernmental debt and the debt of public
entities at the sub-national level

 "Gross domestic product (GDP) at basic prices, by

industry". www150.statcan.gc.ca. January 31, 2013.