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Economy of Canada



Main article: Canada – United States relations

Canada and the United States share a deep and common trading relationship. Canada's job market continues to perform well along with the US, reaching a 30 year low in the unemployment rate in December 2006, following 14 consecutive years of employment growth. [4] Disputes over trade tariffs, multi-lateral military action and controversial Canadian legislation such as same-sex marriage, immigration law, and legal medical marijuana have raised tensions and cooled relations between these two countries.

Despite these differences, the United States is by far Canada's largest trading partner, with more than $1.7 billion CAD in trade per day in 2005. 81% of Canada's exports go to the United States, and 67% of Canada's imports are from the United States, [5] but this only makes up for 23% of exports and 17% of imports for the United States [6]. By comparison, in 2005 this was more than U.S. trade with all countries in the European Union combined, [7] and well over twice U.S. trade with all the countries of Latin America combined. [8] Just the two-way trade that crosses the Ambassador Bridge between Michigan and Ontario equals all U.S. exports to Japan. Canada's importance to the United States is not just a border-state phenomenon: Canada is the leading export market for 35 of 50 U.S. states, and is the United States' largest foreign supplier of energy.

Bilateral trade increased by 52% between 1989, when the U.S.-Canada Free Trade Agreement (FTA) went into effect, and 1994, when the North American Free Trade Agreement (NAFTA) superseded it.[citation needed] Trade has since increased by 40%. NAFTA continues the FTA's moves toward reducing trade barriers and establishing agreed upon trade rules. It also resolves some long-standing bilateral irritants and liberalizes rules in several areas, including agriculture, services, energy, financial services, investment, and government procurement. NAFTA forms the largest trading area in the world, embracing the 406 million people of the three North American countries.

The largest component of U.S.-Canada trade is in the commodity sector.

The U.S. is Canada's largest agricultural export market, taking well over half of all Canadian food exports. [9] Similarly, Canada is the largest market for U.S. agricultural goods with nearly 20% of American food exports going to its Northern neighbor[citation needed]. Nearly two-thirds of Canada's forest products, including pulp and paper, are exported to the United States; 72% of Canada's total newsprint production also is exported to the U.S.

At $73.6 billion in 2004, U.S.-Canada trade in energy is the largest U.S. energy trading relationship, with the overwhelming majority ($66.7 billion) being exports from Canada. The primary components of U.S. energy trade with Canada are petroleum, natural gas, and electricity. Canada is the United States' largest oil supplier and the fifth-largest energy producing country in the world. Canada provides about 16% of U.S. oil imports and 14% of total U.S. consumption of natural gas. The United States and Canada's national electricity grids are linked and both countries share hydro power facilities on the Western borders.

While 95% of U.S.-Canada trade flows smoothly, there are occasionally bilateral trade disputes over the remaining 5%, particularly in the agricultural and cultural fields.[citation needed] Usually, however, these issues are resolved through bilateral consultative forums or referral to World Trade Organization (WTO) or NAFTA dispute resolution.[citation needed] In May 1999, the U.S. and Canadian Governments negotiated an agreement on magazines that provides increased access for the U.S. publishing industry to the Canadian market. The United States and Canada also have resolved several major issues involving fisheries. By common agreement, the two countries submitted a Gulf of Maine boundary dispute to the International Court of Justice in 1981; both accepted the Court's 12 October 1984 ruling which demarcated the territorial sea boundary. A current issue between the United States and Canada is the ongoing softwood lumber dispute, as the U.S. alleges that Canada unfairly subsidizes its forestry industry.[citations needed]

In 1990, the United States and Canada signed a bilateral Fisheries Enforcement Agreement, which has served to deter illegal fishing activity and reduce the risk of injury during fisheries enforcement incidents. The U.S. and Canada signed a Pacific Salmon Agreement in June 1999 that settled differences over implementation of the 1985 Pacific Salmon Treaty for the next decade.[citations needed]

Canada and the United States signed an aviation agreement during Bill Clinton's visit to Canada in February 1995, and air traffic between the two countries has increased dramatically as a result. The two countries also share in operation of the St. Lawrence Seaway, connecting the Great Lakes to the Atlantic Ocean.[citations needed]

The U.S. is Canada's largest foreign investor; at the end of 1999, the stock of U.S. direct investment was estimated at $116.7 billion, or about 72% of total foreign direct investment in Canada. U.S. investment is primarily in Canada's mining and smelting industries, petroleum, chemicals, the manufacture of machinery and transportation equipment, and finance.[citations needed]

Canada is the third-largest foreign investor in the United States. At the end of 1999, the stock of Canadian direct investment in the United States was estimated at $90.4 billion. Canadian investment in the United States is concentrated in manufacturing, wholesale trade, real estate, petroleum, finance, and insurance and other services.[citations needed]

[

Median household income comparison

Country Median household income national currency units Year PPP rate (OECD) Median household income (PPP)
Switzerland[14] 95,184 CHF 2005 1.74 $55,000
California, US[15] US State $54,000
United States $48,000 USD 2006 1.00 $48,000
Canada [16] $53,634 CAD 2005 1.21 $44,000
New Zealand [17] $62,556 NZD 2007 1.54 $41,000
United Kingdom [18] £24,700 GBP 2004 0.632 $39,000
Australia[19] $53,404 AUD 2006 1.41 $38,000
Israel[20] ₪107,820 ILS 2006 2.90 $37,000
Ireland €35,410 EUR 2005 1.02 $35,000
Scotland,
United Kingdom[21]		 £21,892 GBP 2005 0.649 $34,000
West Virginia, US[22] US state $33,000
Hong Kong[23] $186,000 HKD 2005 5.96 $31,000
Singapore[24] $45,960 SGD 2005 1.55 $30,000

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Free Trade Agreements

(source: DFAIT)

Canada is in the negotiating bilateral FTAs with the following countries and trade blocs:

Canada is also involved in the negotiations to create the following reigonal trade blocs:

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See also

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External links

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Notes

[25]

  1. ^ 2006/2007/2008 GDP. IMF.
  2. ^ 2006 GDP figures. world bank.
  3. ^ Actual hours worked per week by industry, seasonally adjusted (monthly). Statistics Canada.
  4. ^ Imports, exports and trade balance of goods on a balance-of-payments basis, by country or country grouping. Statistics Canada.
  5. ^ 2006 exports/imports.
  6. ^ PBS, commanding heigths, map of the world's economic systems. Retrieved on 2008-01-31.
  7. ^ 2008 Index of Economic Freedom. Heritage Foundation.
  8. ^ Howlett, Michael and M. Ramesh. Political Economy of Canada: An Introduction. Toronto: McClelland and Stewart, 1992.
  9. ^ Environmetn Canada - Energy Consumption
  10. ^ Canada vs. The OECD: An Environmental Comparison
  11. ^ The Relative Position of Canada in the World Grain Market
  12. ^ CIA World Factbook - Canada
  13. ^ Wallace, Iain, A Geography of the Canadian Economy. Don Mills: Oxford University Press, 2002.
  14. ^ Swiss Government, income quintiles, 2005. Retrieved on 2007-01-19.
  15. ^ California Median Household income, 2006. Retrieved on 2007-03-22.
  16. ^ Canada median household income. Retrieved on 2008-5-2.
  17. ^ New Zealand income survey showing median household income. Retrieved on 2007-10-04.
  18. ^ UK parliament discussion showing median household income. Retrieved on 2006-12-31.
  19. ^ Census QuickStats. Retrieved on 2007-10-07.
  20. ^ israeli median household income, 2006. Retrieved on 2008-01-15.
  21. ^ Scottish Economic Statistics 2007. Retrieved on 2007-10-09.
  22. ^ West Virginia, Median Household Income, 2005. Retrieved on 2007-03-22.
  23. ^ Hong Kong median household income, 2005. Retrieved on 2007-01-19.
  24. ^ Singapore median household income, 2005. Retrieved on 2007-01-19.
  25. ^ There is an apparent discrepancy between the factbook's 65.4% of GDP estimate for Canada's debt in 2006 [1], and the 30.2% trumpeted by the Canadian government at [2]. Both numbers are correct. The reason is that the Canadian government uses the OECD's net financial liabilities, while the CIA World Factbook uses a different measure of financial liabilities. The OECD itself reports the gross number as 68%, and the net number as 30.2% [3]. The net number places Canada as one of the least indebted G8 countries, while the gross number is less flattering.

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References

  • Howlett, Michael and M. Ramesh. Political Economy of Canada: An Introduction. Toronto: McClelland and Stewart, 1992.
  • Wallace, Iain, A Geography of the Canadian Economy. Don Mills: Oxford University Press, 2002.
  • This article contains material from the CIA World Factbook which, as a U.S. government publication, is in the public domain.
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