Canada Overview: Economy
Since World War II the development of Canada's manufacturing, mining, and service sectors has led to the creation of an affluent society. Services now account for 68.5% of the GDP, while industry accounts for 29%. Tourism and financial services represent some of Canada's most important industries within the service sector. Manufacturing, however, is Canada's single most important economic activity. The leading products are transportation equipment, chemicals, processed and unprocessed minerals, processed foods, wood and paper products, fish, petroleum, natural gas, electrical and electronic products, printed materials, machinery, and clothing. Industries are centered in Ontario, Quebec, and, to a lesser extent, British Columbia and Alberta. Canada's industries depend on the country's rich energy resources, which include hydroelectric power, petroleum (including extensive oil sands), natural gas, coal, and uranium.
Canada is a leading mineral producer, although much of its mineral resources are difficult to reach due to permafrost. It is the world's largest source of nickel, zinc, and uranium, and a major source of lead, asbestos, gypsum, potash, tantalum, and cobalt. Other important mineral resources are petroleum, natural gas, copper, gold, iron ore, coal, silver, diamonds, molybdenum, and sulfur. The mineral wealth is located in many areas; some of the most productive regions are Sudbury, Ont. (copper and nickel); Timmins, Ont. (lead, zinc, and silver); and Kimberley, British Columbia (lead, zinc, and silver). Petroleum and natural gas are found in Alberta and Saskatchewan.
Agriculture employs some 2% of the population and contributes a similar percentage of the GDP. The sources of the greatest farm income are livestock and dairy products. Among the biggest income-earning crops are wheat, barley, rapeseed (canola), tobacco, fruits, and vegetables. Canada is one of the world's leading agricultural exporters, especially of wheat. Manitoba, Saskatchewan, and Alberta are the great grain-growing provinces, and, with Ontario, are also the leading sources of beef cattle. The main fruit-growing regions are found in Ontario, British Columbia, Quebec, and Nova Scotia. Apples and peaches are the principal fruits grown in Canada. More than half of the total land area is forest, and Canadian timber production ranks among the highest in the world.
Fishing is an important economic activity in Canada. Cod and lobster from the Atlantic and salmon from the Pacific historically have been the principal catches, but the cod industry was halted in the mid-1990s due to overfishing. About 75% of the take is exported. The fur industry, once vitally important but no longer dominant in the nation's economy, is centered in Quebec and Ontario.
A major problem for Canada is that large segments of its economy—notably in manufacturing, petroleum, and mining—are controlled by foreign, especially U.S. interests. This deprives the nation of much of the profits of its industries and makes the economy vulnerable to developments outside Canada. This situation is mitigated somewhat by the fact that Canada itself is a large foreign investor. Since the free trade agreement with the United States (effective 1989), and the North American Free Trade Agreement (effective 1994), trade and economic integration between the two countries has increased dramatically.
The United States is by far Canada's leading trade partner, followed by China and Mexico. Machinery and equipment, chemicals, and consumer goods comprise the bulk of imports; crude petroleum and motor vehicles and parts rank high among both the nation's largest imports and exports. Other important exports are industrial machinery, aircraft, telecommunications equipment, chemicals, plastics, fertilizers, forest products, natural gas, hydroelectric power, and aluminum.
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.
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