Canadian Economy

The economy of Canada in the 21st century is diversified. Canada sells its goods and services around the world, however more than 80% of exports and 70% of imports take place with the United States.

The Canadian economy is becoming more knowledge-based. Three out of four canadians are now employed by the service industry in Canada.The number of Canadians working in offices, stores or warehouses now far outnumber those working at farms, mines, mills or factories.

Canada’s economic health is closely tied to a number of factors:

• the wealth of natural resources;
• the strength of its manufacturing and construction industries;
• the health of the financial and service sectors;
• the ability to span distances using communications and transportation technologies;
• dynamic trade relationships with other nations; and
• Canada's ability to compete in a global marketplace.

Canadian businesses are getting more connected than ever before, taking advantage of advances in communications technology to reach out into the global marketplace in search of buyers for Canadian products. Indeed, with a small domestic market, the steady expansion of multilateral trade is critical to the structure of the Canadian economy and the continued prosperity of our nation.

In 2002, the Canadian economy put in a solid performance, posting the strongest GDP growth of all G7 countries. GDP grew at a rate of 3.3% for the year reaching $1.15 trillion at current market prices.

The growth in GDP reflected an increased demand for big ticket items, such as houses, cars and furniture. Residential construction activity was up 16.2%, the strongest showing since the mid-1980s. This stimulated the manufacturing of construction materials. Retailers’ activity expanded 6.1%, which was most evident in sales at motor vehicle dealers, furniture stores and department stores. Wholesaling activity was also up 7.1% as automotive, lumber and furniture wholesalers had a particularly busy year.

The largest impact on the Canadian economy was probably the rapid rise of the Canadian dollar after years of decline against its American counterpart. By the fall of 2003, the dollar had reached levels not seen for over a decade. As a result, many Canadian exporters saw their profits fall. On the other hand, Canadian travellers found that the price of a cup of coffee in Paris or an excursion to a tropical island had become more affordable.

Compared with much of the world in 2002, including the United States, which was experiencing an economic slowdown, Canada performed relatively well. Throughout 2002 and into 2003, the Canadian economy remained robust.

Also, interest rates reached record lows, thanks in large part to a low and stable rate of inflation. Low interest rates further contributed to Canada’s strong growth, especially in the housing market. The Government of Canada has also consistently balanced its budget over the last several years.

Current Trends in The Canadian Economy:

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Canadian Economy and Cost of Living:

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Canadian Economy and Money:

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Government and the Canadian Economy:

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Business in the Canadian Economy:

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For more on the Canadian economy as it happens, take a look at the Globe and Mail Business section.