STRUCTURE OF THE ECONOMY
More than two-thirds of the country's output is contributed by the Services sector, which employs nearly three-quarters of the working population.
In contrast, primary sectors accounted for less than 3% of Canada's GDP in 2004 and provided employment for just over 3% of the country's workforce.
But the primary sector plays an important role in Canada's economic activity, as žth of Canada exports are primary articles and many areas depend on the primary sector as their source of income. The main agricultural products are wheat, barley, oilseed, tobacco, fruits, vegetables, dairy products, forest products and fish.
As regards the manufacturing sector, Canada enjoys a large industrial base, which produces 26% of the country's output. The manufacturing sector improved its competitiveness during the 1990s and has been one of the most buoyant sectors of the economy. Manufacturing together with construction generates employment to 1/5 of the population. Canada's close trading ties with the US has helped manufacturing sector to grow further. The main industries are transportation equipment, chemicals, processed and unprocessed minerals, food products; wood and paper products; fish products, petroleum and natural gas. Since late 2000, however, manufacturing sector has been feeling the impact of weaker US demand growth.
One of the remarkable features of Canadian economy is the growth made by it since the recession of the early 1990s. Canada is estimated to have grown more rapidly than its other developed counterparts, which was a combined effort of controlled inflation rate, low interest rates, and a low Canadian dollar (with respect to other major currencies), all of which helped exports to grow. The mining,communications, utilities, trade, and financial services. |
sectors grew the most in output, while employment growth was greatest in nongovernmental services.
ROLE OF GOVERNMENT vs MARKET
Canada closely resembles the US in its market-oriented economic system, pattern of production, and affluent living standards. The State's role is to control budget and to set the rules for and collects most of the personal and corporate income taxes. The federal government also provides services like, old age security (OAS) payments, employment insurance payments, student loans to Canada's people. Further, agricultural subsidies, the Royal Canadian Mounted Police (RCMP) and funding to crown corporations like the Canadian Broadcasting Corporation (CBC), Via Rail, and Canada Post are also done by the Government of Canada. The government also manages the Canada Pension Plan (CPP), which is funded by employer and employee contributions. Besides, the government is responsible for allocating money to the provinces to deliver other services such as health, education, and social services.
Thus, despite being a market economy, Canada does have a significant room for
government intervention and the government has indeed a significant impact on how public services are delivered.
In recent years, the proportion of GDP accounted for by federal government expenditure has remained between 23-25%, while the growth rate of govt. consumption expenditure has declined to 0.8% between 1993-03 as against 2.6% between 1983-93. This was because of the sale of several large government-owned corporations as well as reduced program spending by the state.
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