Canada’s economy is both mature and diverse, benefiting from an advanced services sector, an abundance of natural resources, sound management and free trade agreements.
The Canadian economy is the eighth largest in the world according to the IMF. As of 2007, its nominal GDP was $1.274 trillion, with growth of 2.7%. It is part of the G8 and other ‘rich clubs’ such as the OECD.
Unlike most developed economies, Canada has moved from agriculture straight to services, which now account for nearly 67.9% of GDP. This industry is very diverse and includes the retail sector, financial services, real estate, education, health, high-tech, entertainment and tourism. All these sectors are developing at a rapid rate with retail and health leading growth. The service industry employs 75% of the 17.9 million working Canadians.
Another important factor in the country’s development was the free trade agreement with the US that was signed in 1989, as well as the NAFTA treaty of 1994. These agreements linked several other key countries such as Mexico, Israel, Chile and Costa Rica to Canada and its economy. In January 2008, the country has also agreed to a Canadian-European free trade association that has further developed its robust economy.
Canada is the second-largest country in the world by land mass (after Russia), and is blessed with natural resources. Oil and lumber – and pulp & paper – are two vital industries and exports. According to the USGS, Canada has the second-largest oil reserves in the world, with its large oil
and gas reserves in Alberta, British Columbia and Saskatchewan and the Athabasca Tar Sands. Canadian mines are leading producers of nickel, gold, diamonds, uranium, and lead. Canada is also one of the largest exporters of soft commodities including grains and wheat in particular.
Although manufacturing has never been a dominant sector of the economy, it has been an important secondary industry and does manufacture a significant number of cars and light aircraft, mainly in central Canada.
Canada’s sound fiscal management has been another major factor contributing to the country’s economic superiority. Prudent management has given Canada a balanced budget throughout the entire last decade.