Canadian Economy

Canadian Economy

Canada has come a long way from the ecomomic revolution sparked by the railway and the telegraph in the early 1800s. Over the years, a steady tide of technological progress has profoundly reshaped our economy, making possible the combustion engine, the assembly line, computer networks and professional consultants. Today, economic progress rides an electronic expressway of automation, information and instant communication. Advances in technology, the increased globalization of markets and the emergence of liberal trading regimes are fundamentally changing the way Canadians conduct their business. Long removed from an economy based almost exclusively on natural resources, Canada is rapidly moving toward a knowledge-based economy built on innovation and technology. The new economy is also a ‘smarter’ economy: Canada’s knowledge-intensive industries are generating advances in our ability to produce high-tech machinery and equipment, and encouraging industrial innovation as a result.

Canadian businesses are ‘getting connected’ more than ever before, exploiting advances in communications technology to reach out into the global marketplace in search of buyers for their products. Though we have always been a nation looking outward for markets, Canadian trade continues to grow beyond our borders. Indeed, with a small domestic market, the steady expansion of multilateral trade is critical to the structure of our economy and the continued prosperity of our nation.

Despite the transformations now rippling through the Canadian marketplace, the most dramatic structural change our economy has undergone is the rise of the services sector. Though our goods-producing industries account for 33% of our national economy, the Canadian services sector is much larger, employing three out of four Canadians and generating two-thirds of our gross domestic product.

What exactly makes up the Canadian services sector? It’s easy to picture the physical products churned out by our manufacturing, agriculture, mining, forestry and construction industries, but the value of the services sector is less tangible. Goods need to be delivered, and this involves storage services, truck drivers, rail carriers and bicycle couriers. The actual exchange of goods often requires legal and financial services to process the transactions. Canadians also want to shop, eat out, and be entertained by movies, operas, concerts and ballets. And nearly every aspect of government activity—from health care to education to national defence—is a service provided to Canadian citizens.

As an affluent, high-tech industrial society in the trillion-dollar class, Canada resembles the US in its market-oriented economic system, pattern of production, and affluent living standards. Since World War II, the impressive growth of the manufacturing, mining, and service sectors has transformed the nation from a largely rural economy into one primarily industrial and urban. The 1989 US-Canada Free Trade Agreement (FTA) and the 1994 North American Free Trade Agreement (NAFTA) (which includes Mexico) touched off a dramatic increase in trade and economic integration with the US, its principle trading partner. Canada enjoys a substantial trade surplus with the US, which absorbs nearly 80% of Canadian exports each year. Canada is the US's largest foreign supplier of energy, including oil, gas, uranium, and electric power. Given its great natural resources, skilled labor force, and modern capital plant, Canada has enjoyed solid economic growth, and prudent fiscal management has produced consecutive balanced budgets from 1997 to 2007. In 2008, growth slowed sharply as a result of the global economic downturn, US housing slump, plunging auto sector demand, and a drop in world commodity prices. Public finances, too, are set to deteriorate for the first time in a decade. Tight global credit conditions have further restrained business and housing investment, despite the conservative lending practices and strong capitalization that made Canada's major banks among the most stable in the world.

GDP (official exchange rate): 
$1.564 trillion (2008 est.)
GDP - real growth rate: 
0.6% (2008 est.) 
2.7% (2007 est.) 
3.1% (2006 est.)
GDP - per capita: 
$39,300 (2008 est.) 
$39,400 (2007 est.) 
$38,700 (2006 est.) 
note: data are in 2008 US dollars
GDP - composition by sector: 
agriculture: 2% 
industry: 28.4% 
services: 69.6% (2008 est.)
Labor force: 
18.18 million (2008 est.) 
Labor force - by occupation: 
agriculture 2%, manufacturing 13%, construction 6%, services 76%, other 3% (2006)
Unemployment rate: 
6.1% (2008 est.)
Household income or consumption by percentage share: 
lowest 10%: 2.6% 
highest 10%: 24.8% (2000)
Distribution of family income - Gini index: 
32.1 (2005)
Investment (gross fixed): 
22.6% of GDP (2008 est.)
revenues: $608.3 billion 
expenditures: $606 billion (2008 est.)
Public debt: 
62.3% of GDP (2008 est.)
Inflation rate (consumer prices): 
1% (January 2009 est.)
Central bank discount rate: 
3.5% (January 2009)
Commercial bank prime lending rate: 
6.1% (31 December 2007)
Stock of money: 
$391.6 billion (31 December 2007)
Stock of quasi money: 
$1.381 trillion (31 December 2007)
Stock of domestic credit: 
$2.382 trillion (31 December 2007)
Market value of publicly traded shares: 
$2.187 trillion (31 December 2007)
Agriculture - products: 
wheat, barley, oilseed, tobacco, fruits, vegetables; dairy products; forest products; fish
transportation equipment, chemicals, processed and unprocessed minerals, food products, wood and paper products, fish products, petroleum and natural gas 
Industrial production growth rate: 
-1% (2008 est.)
Electricity - production: 
612.6 billion kWh (2007 est.)
Electricity - consumption: 
530 billion kWh (2006 est.)
Electricity - exports: 
50.12 billion kWh (2007 est.)
Electricity - imports: 
19.66 billion kWh (2007 est.)
Oil - production: 
3.425 million bbl/day (2007 est.)
Oil - consumption: 
2.371 million bbl/day (2007 est.)
Oil - exports: 
2.225 million bbl/day (2005)
Oil - imports: 
1.229 million bbl/day (2005)
Oil - proved reserves: 
178.6 billion bbl 
note: includes oil sands (1 January 2008 est.)
Natural gas - production: 
187 billion cu m (2007 est.)
Natural gas - consumption: 
92.9 billion cu m (2007 est.)
Natural gas - exports: 
107.3 billion cu m (2007 est.)
Natural gas - imports: 
13.2 billion cu m (2007 est.)
Natural gas - proved reserves: 
1.648 trillion cu m (1 January 2008 est.)
Current account balance:
$12.82 billion (2008 est.)
$461.8 billion f.o.b. (2008 est.)
Exports - commodities: 
motor vehicles and parts, industrial machinery, aircraft, telecommunications equipment; chemicals, plastics, fertilizers; wood pulp, timber, crude petroleum,natural gas, electricity, aluminum
Exports - partners: 
US 78.9%, UK 2.8%, China 2.1% (2007)
$436.7 billion f.o.b. (2008 est.)
Imports - commodities: 
machinery and equipment, motor vehicles and parts, crude oil, chemicals, electricity, durable consumer goods
Imports - partners: 
US 54.1%, China 9.4%, Mexico 4.2% (2007)
Reserves of foreign exchange and gold: 
$41.08 billion (2007 est.)
Debt - external: 
$758.6 billion (30 June 2007)
Stock of direct foreign investment - at home: 
$586.6 billion (2008 est.)
Stock of direct foreign investment - abroad: 
$547.2 billion (2008 est.)
Exchange rates: 
Canadian dollars (CAD) per US dollar - 1.0364 (2008 est.), 1.0724 (2007), 1.1334 (2006), 1.2118 (2005), 1.301 (2004)