The economy of Canada is a highly developed mixed economy.[26][27] It is the 9th largest GDP by nominal

10 min readJun 30, 2021

15th largest GDP by PPP in the world. As with other developed nations, the country’s economy is dominated by the service industry which employs about three quarters of Canadians.[28] Canada has the third highest total estimated value of natural resources, valued at US$33.2 trillion in 2019.[29] It has the world’s third largest proven petroleum reserves and is the fourth largest exporter of petroleum. It is also the fourth largest exporter of natural gas. Canada is considered an “energy superpower” due to its abundant natural resources and a small population of 37 million inhabitants relative to its land area.[30][31][32]

According to the Corruption Perceptions Index, Canada is perceived as one of the least corrupt countries in the world,[33] and is one of the world’s top ten trading nations, with a highly globalized economy.[34][35] Canada historically ranks above the U.S. and most western European nations on The Heritage Foundation’s index of economic freedom,[36] and experiencing a relatively low level of income disparity.[37] The country’s average household disposable income per capita is “well above” the OECD average.[38] The Toronto Stock Exchange is the eighth-largest stock exchange in the world by market capitalization, listing over 1,500 companies with a combined market capitalization of over US$3 trillion.[39]

In 2018, Canadian trade in goods and services reached CA$1.5 trillion.[14] Canada’s exports totalled over CA$585 billion, while its imported goods were worth over CA$607 billion, of which approximately CA$391 billion originated from the United States, CA$216 billion from non-U.S. sources.[14] In 2018, Canada had a trade deficit in goods of CA$22 billion and a trade deficit in services of CA$25 billion.[14]

Canada is unusual among developed countries in the importance of the primary sector, with the logging and energy industries being two of Canada’s most important. Canada also has a sizable manufacturing sector, based in Central Canada, with the automobile industry and aircraft industry being especially important. With the world’s longest coastline, Canada has the 8th largest commercial fishing and seafood industry in the world.[40][41] Canada is one of the global leaders of the entertainment software industry.[42] It is a member of the APEC, G7, G20, OECD and WTO, and was formerly a member of NAFTA until the USMCA came into force in 2020. In Canada, the USMCA is officially known as the Canada–United States–Mexico Agreement (CUSMA) in English and the Accord Canada–États-Unis–Mexique (ACEUM) in French.

Overview[edit]

Part of a series on theEconomy of Canada

Economic history of Canada

Sectors Primary sector

Secondary sector

Automotives

Tertiary sector

Finance

Companies

Companies listed on the TSX

Economy by province

Economy by city

With the exception of a few island nations in the Caribbean, Canada is the only major parliamentary system in North America. As a result, Canada has developed its own social and political institutions, distinct from most other countries in the world.[43] Though the Canadian economy is closely integrated with the American economy, it has developed unique economic institutions.

The Canadian economic system generally combines elements of private enterprise and public enterprise. Many aspects of public enterprise, most notably the development of an extensive social welfare system to redress social and economic inequities, were adopted after the end of World War II in 1945.[43]

Approximately 89% of Canada’s land is Crown land. [44] Canada has one of the highest levels of economic freedom in the world. Today Canada closely resembles the U.S. in its market-oriented economic system and pattern of production.[45] As of 2019, Canada has 56 companies in the Forbes Global 2000 list, ranking ninth just behind South Korea and ahead of Saudi Arabia.[46]

Tree-map of Canada’s goods exports in 2017

International trade makes up a large part of the Canadian economy, particularly of its natural resources. In 2009, agriculture, energy, forestry and mining exports accounted for about 58% of Canada’s total exports.[47] Machinery, equipment, automotive products and other manufactures accounted for a further 38% of exports in 2009.[47] In 2009, exports accounted for about 30% of Canada’s GDP. The United States is by far its largest trading partner, accounting for about 73% of exports and 63% of imports as of 2009.[48] Canada’s combined exports and imports ranked 8th among all nations in 2006.[49]

About 4% of Canadians are directly employed in primary resource fields, and they account for 6.2% of GDP.[50] They are still paramount in many parts of the country. Many, if not most, towns in northern Canada, where agriculture is difficult, exist because of a nearby mine or source of timber. Canada is a world leader in the production of many natural resources such as gold, nickel, uranium, diamonds, lead, and in recent years, crude petroleum, which, with the world’s second-largest oil reserves, is taking an increasingly prominent position in natural resources extraction. Several of Canada’s largest companies are based in natural resource industries, such as Encana, Cameco, Goldcorp, and Barrick Gold. The vast majority of these products are exported, mainly to the United States. There are also many secondary and service industries that are directly linked to primary ones. For instance one of Canada’s largest manufacturing industries is the pulp and paper sector, which is directly linked to the logging business.

The reliance on natural resources has several effects on the Canadian economy and Canadian society. While manufacturing and service industries are easy to standardize, natural resources vary greatly by region. This ensures that differing economic structures developed in each region of Canada, contributing to Canada’s strong regionalism. At the same time the vast majority of these resources are exported, integrating Canada closely into the international economy. Howlett and Ramesh argue that the inherent instability of such industries also contributes to greater government intervention in the economy, to reduce the social impact of market changes.[51]

The economy of Canada is a highly developed mixed economy.[26][27] It is the 9th largest GDP by nominal

Contents

Overview[edit]

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