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Canada Economy


Canada is one of the world's wealthiest nations, with a high per capita income, and is a member of the Organisation for Economic Co-operation and Development (OECD) and the G8. It is one of the world's top 10 trading nations. Canada is a mixed market, ranking lower than the US but higher than most western European nations on the Heritage Foundation's index of economic freedom. Since the early 1990s, the Canadian economy has been growing rapidly, with low unemployment and large government surpluses on the federal level. Today, Canada resembles the US in its market-oriented economic system, pattern of production, and high living standards.

As of February 2009, Canada's national unemployment rate was 7.77%. Provincial unemployment rates vary from a low of 3.6% in Alberta to a high of 14.6% in Newfoundland and Labrador. According to the Forbes Global 2000 list of the world's largest companies in 2008, Canada had 69 companies in the list, ranking 5th next to France.

As of 2008, Canada’s total government debt burden is the lowest in the G8. The OECD projects that Canada's net debt-to-GDP ratio will decline to 19.5% in 2009, less than half of the projected average of 51.9% for all G8 countries. According to these projections, Canada's debt burden will have fallen over 50 percentage points from the peak in 1995, when it was the second highest in the G8.

In the past century, the growth of the manufacturing, mining, and service sectors has transformed the nation from a largely rural economy into one primarily industrial and urban. As with other first world nations, the Canadian economy is dominated by the service industry, which employs about three quarters of Canadians. Canada is unusual among developed countries in the importance of the primary sector, with the logging and oil industries being two of Canada's most important.

Canada is one of the few developed nations that are net exporters of energy. Atlantic Canada has vast offshore deposits of natural gas and large oil and gas resources are centred in Alberta. The immense Athabasca Oil Sands give Canada the world's second-largest oil reserves, behind Saudi Arabia. In Quebec, British Columbia, Newfoundland & Labrador, New Brunswick, Ontario, Manitoba, and Yukon, hydroelectricity is a cheap and clean source of renewable energy.

Canada is one of the world's most important suppliers of agricultural products, with the Canadian Prairies one of the most important suppliers of wheat, canola and other grains. Canada is the world's largest producer of zinc and uranium and a world leader in many other natural resources such as gold, nickel, aluminium, and lead; many towns in the northern part of the country, where agriculture is difficult, exist because of a nearby mine or source of timber. Canada also has a sizeable manufacturing sector centred in southern Ontario and Quebec, with automobiles and aeronautics representing particularly important industries.

Economic integration with the US has increased significantly since World War II. This has prompted Canadian nationalists to worry about cultural and economic autonomy in an age of globalisation as American television shows, movies and corporations have become ubiquitous. The Automotive Products Trade Agreement in 1965 opened the borders to trade in the auto manufacturing industry. In the 1970s, concerns over energy self-sufficiency and foreign ownership in the manufacturing sectors prompted Pierre Trudeau's Liberal government to set up the National Energy Program (NEP) and Foreign Investment Review Agency (FIRA).

In the 1980s, Brian Mulroney's Progressive Conservatives abolished the NEP and changed the name of FIRA to Investment Canada in order to encourage foreign investment. The Canada-United States Free Trade Agreement (FTA) of 1988 eliminated tariffs between the two countries, while North American Free Trade Agreement (NAFTA) expanded the free trade zone to include Mexico in the 1990s.

In the mid-1990s, the Liberal government under Jean Chrétien began posting annual budgetary surpluses and began steadily paying down the national debt. Since 2001, Canada has avoided economic recession and has maintained the best overall economic performance in the G8. The global financial crisis hit Canada with a recession and could boost the country's unemployment rate to 10%. Despite the global recession, Canada’s labour market is in need of hundreds of thousands of foreign workers, according to the Canadian Minister of Citizenship, Immigration and Multiculturalism.

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