Canada’s growth may be attributed to the service industry that employs two thirds of the country’s population. Its key industries include manufacturing, energy, agriculture, fishing, electricity, forestry, automotive, airspace, social programs, transportation and tourism (Wehinger, 2010 p. 67).
Canada’s economic statistics
Canada’s main industries comprise of transportation, equipments, chemicals, processed and unprocessed minerals, food products, wood, fish and paper products, petroleum and natural gas. Economic experts ranked the country’s rate of doing business in position 17th globally.
Canada’s major exports and imports
According to Landsburg (2010, p.34), “the country’s major exports include industrial machines, motor vehicles and spare parts, aircrafts, telecommunication equipments, chemicals, plastics, fertilizers, wood pulp, timber, crude oil, natural gas, electricity and aluminium”.
The total country export earnings per year are 462.528 billion US dollars (Landsburg, 2010).
According to Landsburg (2010, p.35), “Canada’s major imports comprise of machines and equipments, motor vehicles and spare parts, crude oil, chemicals, electricity and durable consumer products”. The importation of these goods costs the country a total of 474.544 billion dollars (Yunker, 2010).
Canada’s major exports and imports have changed over the last decade. The United States featured in first position in importing Canadian commodities at the beginning of the last decade.
Exports of Canadian manufactured commodities to the US declined in 2009. China increased its imports of Canada’s manufactured goods bypassing the US. Countries within the EU also featured as importers of Canada’s manufactured goods.
Canada’s major trading partners
The country’s main export partners include the United States at 73.2%, the European Union at 4.6%, the United Kingdom at 4.3%, China at 4.3%, Germany at 3.4% and Israel at 3.1% (Thompson, 2012).
Canada’s major trading partners in the importation of products comprise of the United States at 50.6%, China at 11.0%, the United Kingdom at 6.2%, Japan at 6.2%, Mexico at 5.5% and South Korea at 4.5% (Thompson, 2012). China also features as a major trading partner of Canada.
The country features as one of the major importers of Canada’s manufacturing industry. The UK is among the major trading partners of Canada followed by the Netherlands among the EU countries.
Canada’s policy on trade barriers
Canada has a number of trade barriers. Canada contains internal trade barriers called interprovincial trade barriers. The barriers contribute to the slow pace of Canada’s economy compared to that of the US. Canada imposes very high tariffs on certain foods like dairy products to encourage the local animal food industry.
Canada imposes tariff rate quotas on other food imports. This aspect leads to high prices of food commodities in the country due to reduced competition. Canada lowers tariffs of imported goods to encourage trade with its neighbors especially the US.
Canada introduced the free trade strategy to encourage trade with the US in the 80s. Canada’s transport policy safeguards the wellbeing of its companies that operate abroad. The Trade Policy Branch enhances Canadian companies’ access to foreign markets.
Canada’s investment regulations
Investors in Canada include corporate entities, individual businessmen, countries, organizations and companies. The investors are obliged to follow rules and regulations embedded in Canada’s Investment Act.
The legislation requires the investors to file a notification before they start a new business in the country or when they undertake managerial roles of an already existing one.
Canada imposes strict regulations on the environment because chemicals and diseases can destroy its natural resources. The country’s economy is significantly dependent on natural resources. Canada prohibits goods and services that do not meet its environmental standards.
Trade sanctions
Economic barriers may be imposed on a state by another in order to influence policies or compliance. The regulations may also assist in stopping human rights violations especially the use of excessive force on populations by certain countries.
A group of states may impose sanctions on a given country due to violation of human rights and bad governance.
Countries that export commodities to Canada must appropriately label them. This measure helps in the identification of the goods’ country of origin and production companies.
Canada’s other policies include trade barriers, safety regulations and immigration laws.
Canada’s membership in regional trade agreements
Canada is a member of several regional trade agreements like the Canada- US Free Trade Agreement that was ratified on 12 October 1987.
The agreement later became the North America Free Trade Agreement (NAFTA) in 1994, and the membership includes Canada, US and Mexico.
Other trade ties include Canada – Israel Free Trade Agreement of 1997, Canada- Chile Free trade Agreement of1997 and Canada – Costa Rica Free Trade Agreement of 2000.
Additional economic ties include Canada – European Free Trade Association of 2009 whose other members include Iceland, Norway, Switzerland and Liechtenstein, Canada – Peru Free Trade Agreement of 2009, and Canada – Colombia Free Trade Agreement of 2008.
Others comprise of Canada – Jordan Free Trade Agreement and Canada – Panama Free Trade Agreement (Philip & Marshall, 2011).
Effects of Canada’s trade flows
Canada’s trade continues to grow steadily. This aspect may be related to the country’s increase in trade relations with the US. The Canadian dollar also continues to rise in value and may match the US dollar in the near future.
The effect of this improvement may, however, lead to an increase in the prices of Canadian products in the US. American products may become affordable to the Canadians.
It may be easy for Canadians to move freely to the US border towns to buy goods because of tariff -free commodities and the strong Canadian dollar that may assist in the development of trade between the two countries (Wenz, 2012).
The Free Trade Agreement resulted in the loss of employment of the Canadian population during the economic recession of the 90s.
The economy of Canada suffered when its dollar recorded low performance against the US currency. The Americans took advantage of the low Canadian dollar value and could import oil and do filmmaking in Canada at reduced rates.
The period of recession resulted in disagreements between the US and Canada on minerals, fresh water and softwood lumber because of the resources’ availability in Canada compared to the United States.
Conclusion
Canada features as one of the best economies in the world because of the many types of resources and commodities that it produces, uses locally and also exports to other states in the world.
This aspect is due to the good leadership that helps in the sound management of resources and develops partnerships that may be beneficial to the state.
References
Landsburg, S. (2010). Fair Play: What Your Child Can Teach You About Economics, Values and the Meaning of Life. New York, NY: Free Press.
Philip, D., & Marshall, J. (2011). Pricing Long Bonds: Pitfalls and Opportunities. Journal of Financial Analysts, 1(1), 32-39.
Thompson, A. (2012). Strategy: Core concepts and analytical approaches (2nd Ed.). Web.
Wehinger, G. (2010). Risks Ahead for the Financial Industry in a Changing Interest Rate Environment. Journal of Financial Markets Trends, 21 (1), 67-85.
Wenz, P. (2012).Take Back the Center: Progressive Taxation for a New Progressive Agenda. Massachusetts, MA: Massachusetts Institute of Technology.
Yunker, J. (2010). Economic Justice: The Market Socialist Vision. New York, NY: Rowman & Littlefield, Inc.