What kind of economic system does Canada have?
Answers
The Canadian economy closely resembles that of its neighbour to the south, the US. Besides having similar patterns of production and living standards, Canada also adopts a market oriented economic system combines private enterprise with government regulation.
Since World War II, Canada has experienced massive growth in its manufacturing, mining and services, propelling the economy from being a largely agrarian one to becoming one of the most highly industrialised and urbanised economies in the world.
Today, Canada is the 9th largest economy in the world based on GDP (current prices, US dollars) and the 14th largest based on GDP (PPP). As a member of the OECD and the G-8, Canada also ranks among the most advanced and influential economies in the world.
However unlike most of its peers, Canada is considered to be unusual for an advanced economy as its primary sector, namely the logging and oil industries, is one of the most important elements to the economy. Canada’s manufacturing industry is also high important, particularly the automobile industry, with low labour costs and a comprehensive healthcare and social security system attracting major automobile companies from the US and Japan to set up manufacturing facilities in Canada.
The Canadian economy also differs slightly from its neighbour, the US, where by the former is a net exporter of commodities while the latter is a net importer. The Canadian banking industry is also rather conservative in comparison to that of the US.
Despite this, Canada’s economic progress is interlinked with the US economy. Following the signing of the 1989 US-Canada Free Trade Agreement (FTA) and the 1994 North American Free Trade Agreement (NAFTA), there has been an increase in trade and economic integration with the US. The US is also Canada’s largest trading partner, besides being its largest foreign investor through investments in mining, smelting, petroleum, chemical and machinery segments. As such, Canadian economic policies have often been adjusted according to that of the US. Historically, even a minor change in the US interest rates has had economic repercussions in Canada.
Canada’s Economic Geography
Canada is the second largest nation in the world in terms of land area – behind Russia and ahead of the US. Furthermore, the country contains a rich abundance of mineral, forest and water-based resources such as iron ore, nickel, zinc, copper, gold, lead, rare earth elements, molybdenum, potash, diamonds, silver, fish, timber, wildlife, coal, petroleum, natural gas and hydropower.
Historically, fishing and forestry were once major industries in Canada. Although these industries still retain a level of importance in Canada’ economy, mineral and energy resources have become the leading source of income for the nation. Canada is the world leader in value of mineral exports and unlike most advanced economies; Canada is a net exporter of energy. In 2010, Canada exported 2.151 million barrels of oil per day and 94.67 billion cubic metres of natural gas, making it the 10th largest exporter of oil and the 3rd largest exporter of natural gas in the world. In addition, Canada also has 2nd largest proven oil reserves and the 21st largest proven natural gas reserves in the world.
Answer:
What type of economic system does Canada have?
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