Canada: Facts & Stats

ECONOMY

Industry:

The general pattern of development for wealthy nations was a transition from a primary industry based economy to a manufacturing based one, and then to a service based economy. Canada did not follow this pattern; manufacturing has always been secondary, though certainly not unimportant. Partly because of this, Canada did not suffer as greatly from the pains of deindustrialization in the 1970s and 1980s.

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. Central Canada today produces more vehicles each year than the neighboring U.S. state of Michigan, the heart of the American automobile industry. Manufacturers have been attracted to Canada due to the highly educated population with lower labour costs than the United States. Canada's publicly funded health care system is also an important attraction, as it exempts companies from the high health insurance costs they must pay in the United States.

Much of the Canadian manufacturing industry consists of branch plants of United States firms, though there are some important domestic manufacturers, such as Bombardier Inc.. This has raised several concerns for Canadians. Branch plants provide mainly blue collar jobs, with research and executive positions confined to the United States.

Deindustrialization in Canada has become a serious problem, especially in Ontario (which is very dependent on the automotive industry), with foreign businesses closing plants across the board. The economic crisis is only worsening the situation, with even more plants closing (Oshawa and Windsor, Ontario being especially hard hit).

Agriculture:

Canada is also one of the world's largest suppliers of agricultural products, particularly of wheat and other grains. Canada is a major exporter of agricultural products, to the United States but also to Europe and East Asia. As with all other developed nations the proportion of the population and GDP devoted to agriculture fell dramatically over the 20th century.

As with other developed nations, the Canadian agriculture industry receives significant government subsidies and supports. However, Canada has been a strong supporter of reducing market influencing subsidies through the World Trade Organization. In 2000, Canada spent approximately CDN$4.6 billion on supports for the industry. Of this, $2.32 billion was classified under the WTO designation of "green box" support, 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, which is the WTO threshold. Consequently, Canada used only $848.2 million of its $4.3 billion subsidy allowance granted by the WTO.

Service sector:

The service sector in Canada is vast and multifaceted, employing some three quarters of Canadians and accounting for over two thirds of GDP. The largest employer is the retail sector, employing almost 12% of Canadians. The retail industry is mainly concentrated in a relatively small number of chain stores clustered together in shopping malls. In recent years the rise of big-box stores, such as Wal-Mart (of the United States) and Future Shop (a subsidiary of the US based Best Buy), have led to fewer workers in this sector and a migration of retail jobs to the suburbs.

The second largest portion of the service sector is the business services, employing only a slightly smaller percentage of the population. 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 and Calgary (see Banking in Canada).

The education and health sectors are two of Canada's largest, but both are largely under the purview of the government. The health care industry has been rapidly 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, and also an entertainment industry creating content both for local and international consumption. Tourism is of ever increasing importance, with the vast majority of international visitors coming from the United States. Though the recent strength of the Canadian Dollar has hurt this sector, other nations such as China have increased tourism to Canada.