Manufacturing, real estate, and mining are major factors that drive Canada’s economy
Canada’s economy is well-developed and among the most affluent of its kind in the entire world. In 2020, the nation’s GDP (GDP) stood at $1.64 trillion in the current USD, according to the most recent available World Bank data. This made Canada the ninth largest economy in the world.
The economy of Canada is heavily dependent on trade internationally, as imports and exports of goods and services make up about one-third of GDP.
The top three trading partners include China, the U.S., China, and the U.K. Its three largest industries, as measured by their contribution to GDP include rentals, real estate as well as leasing, manufacturing mining, and quarrying industries, as well as extraction of oil and gas.
Canada is the home of the online retailer Shopify Inc. (SHOP.TO, SHOP) Major banks, like The Royal Bank of Canada (RY.TO, RY), and the energy distribution and transportation company Enbridge Inc. (ENB.TO, ENB).
The COVID-19 virus led to Canada’s economy pulling back dramatically in the first quarter of 2020, and then rebounded in the latter portion of the course of 2019. The second quarter of 2020 saw the real GDP decline 11.3 percent quarter-over-quarter (Q/Q) however it increased 9.1 percent Q/Q during the third quarter and 2.2 percent Q/Q in the 4th quarter of 2020. This offset the sharp decline in the year.
Real GDP increased by 0.3 percent in the first quarter of 2021 as compared prior to 2020’s first quarter. The growth in GDP for the first quarter was due in part to the low rates on mortgages, increasing housing demand, and federal transfers to businesses and households.
The exchange rate for CAD/USD used in this article is 0.787149 at the time of September. 9, 2021.
Certain of the information below might differ between sources since each source employs its own methodology to define and calculate statistics.
The Canadian Economy by the Numbers
Canadian GDP in 2020: $1.64 trillion (World Ranking #9).
Canadian 2020 GDP per Capita: $43,241.62 (World Ranking: #29).
Canadian 2020 GDP Growth: -6.428%.
Canadian 2020 Consumer Price Index (CPI) Inflation: 0.7%.
Canada’s Balance of Trade in Goods and Services: an imbalance of CAD$36.2 billion ($28.6 billion) due to the fact that imports were higher than exports.
Canada’s largest export destination in May 2021: is the U.S. (63.5% of merchandise exported).
Canada’s largest Import Source in the month of May 2021 is the U.S. (50.6% of merchandise imported).
The largest Goods Export in Canada in terms of value, 2021 the crude petroleum market is CAD$7.31 billion ($5.77 billion).
Canada’s largest import of goods by the value of dollars in 2021 is the number of cars CAD$3.13 billion ($2.47).
Canada’s Top Industries: Real Estate, Manufacturing, and Mining
Real Estate, Rental, and Leasing
Canada’s rental, real estate, and leasing industry is made up of businesses that engage in the following actions: managing real estate leasing, selling or purchasing real estate on behalf of others appraisal of real estate; lease and rental of tangible assets like automobiles and lease of non-financial intangible assets like copies of works.
The industry’s GDP which employs approximately 250,000 people, increased by 3.7 percent in the twelve months that ended June 2021, as per the Government of Canada.
One of the largest companies that operate in this field comprises REITs or real property investment trusts (REITs) which include Canadian Apartment Properties REIT (CAR.UN), RioCan REIT (REI.UN), and Allied Properties REIT (AP.UN).
The manufacturing industry in Canada is involved in the chemical or physical transformation of substances and materials into new items. These are either consumed as finished goods or semi-finished items for use for manufacturing purposes.
Industries in Canada produce chemical products, food items, and petroleum products, as well as fabricated products made of metal and transportation equipment, as well as machinery and other products.
The GDP of the industry that employs around 1.5 million workers, increased 8.1 percent in the 12 months to June 2021, as per the Government of Canada.
A few major Canadian producers are ATS Automation Tooling Systems (ATA.TO) which is a custom engineer and maker of industrial automation manufacturing systems; Ballard Power Systems Inc. (BLDP.TO, BLDP) which is a maker of hydrogen-powered fuel cells, as well as NFI Group Inc. (NFI.TO), is a manufacturer of high-performance transit buses.
Mining, Quarrying, and Oil and Gas Extraction
Canada’s quarrying, mining, as well as extraction of oil and gas, is mostly involved with the mining of minerals that naturally occur.
The main focus of the industry is gas and oil extraction however other forms of mining activities include coal mining and different metals such as silver, gold, nickel, copper, and many others. Sand, stone, and gravel, as well as clay and quarrying of ceramics, are all in the field and mines for potash.
GDP for the sector which employs 199,000 people, increased by 15.1 percent over the twelve months that ended in 2021 according to the Government of Canada.
The largest mining companies are Nutrien Ltd. (NTR.TO, NTR) which is an exporter and distributor of nitrogen, potash, and phosphate-based products; Barrick Gold Corp. (ABX.TO, GOLD), a gold mining company and Teck Resources Ltd. (TECK.B.TO, TECK), a natural resource company that mines molybdenum, copper, zinc, gold and the metallurgical coal.
Here’s a review of Canada’s top 10 industries according to their impact on the economy. Together, they’re an important part of Canada’s economy since they account for about three-quarters of the country’s GDP.
Canada’s Top Trading Partners
In the month of May 2021, the balance of trade for services and goods was CAD$1.8 billion shortfall ($1.41). The total imports totaled CAD$50.9 billion ($40.13 billion).
Inventory and the gross capital formation and exports make up about one-third or a quarter of the GDP of Canada as per Canada’s Government of Canada.
The top three trading partners for 2020, in terms of the total volume of trade and exports of services and goods, included three countries: the U.S., China, and the U.K.
#1 Trading Partner: The U.S.
In July 2021 Canada enjoyed an average surplus of CAD$0.78 billion ($0.61) in its balance of trade (BOT). Exports of goods totaled CAD$53.7 billion ($42.32). The total exports of services were $56.3 billion, while imports of services totaled 53 billion CAD ($41.77).
As of the month May 20, Canada’s most valuable export of goods to the U.S. was crude petroleum and its biggest imports from America U.S. was cars, according to the Observatory of Economic Complexity.
The rate of unemployment in Canada in August 2021.
Canada’s relationship to Canada’s relationship with the U.S., as well as Mexico, is subject to the United States-Mexico-Canada Agreement (USMCA) which entered into force on July 1st January 2020. The agreement contains key aspects in the areas of agriculture and dairy, automobiles as well as intellectual property and labor. USMCA was a replacement for that the North American Free Trade Agreement (NAFTA) which was the trade treaty that controlled trade relations between three countries prior to 1994.
# 2 Trading Partner: China
Canada had a significant BOT gap with China in the year 2020. Exports of goods totaled up to CAD$31.6 billion ($23.6) and total imports of goods were CAD$51.9 billion ($38.7) which resulted in a deficit for Canada’s trade with China.
The total 2019 exports of services were $6.1 billion, while the total amount of imports of services amounted to $2.5 billion, which resulted in an increase in the trade of services with China according to Statistics Canada.
Canada’s top export of goods to China for 2020 was coal. The top export from China was computers.
#3 Trading Partner: The U.K.
Canada had a surplus in BOT against the U.K. in 2020. The total exports of goods were $14.9 billion, and the total value of imports of goods was $5.85 billion, which translated into an increase in the trading of products with the U.K.
The total exports of services came to $1.4 billion, while the total amount of imports of services was $1.8 billion, leading to a slight deficit in services trade between Canada and Canada and the U.K., according to Statistics Canada.
Canada’s top exports to UK U.K. in 2020 were pearls precious stones, precious metals, and coins. The top imports of goods in the U.K. U.K. were machinery, nuclear reactors, boilers, and other equipment.
The Canada-United Kingdom Trade and Continuity agreement (Canada-UK TCA) recently came into force on April 1st, 2021. After Brexit and the U.K.’s departure from European Union (EU), the Canada-UK TCA protects the major advantages of Canada’s trade agreements with the EU in accordance with the agreement between the European Union and Canada. Comprehensive Economic and Trade Agreement (CETA).
What Is Canada’s Rank in Economy Size?
In 2020, Canada ranked ninth in terms of size in economics. Countries that had economies bigger than Canada included the U.S., China, Japan, Germany, the U.K., India, France, and Italy.
Is Canada Richer Than the U.S.?
Canada isn’t any more prosperous than the U.S. Although Canada has one of the biggest economies in the world, its economy is smaller than its counterpart, the U.S., which has the biggest economy globally at the time of 2020. It is estimated that the U.S. had a GDP of $21 trillion whereas Canada was able to boast an economy in the range of $1.6 trillion.
Why Is Canada Wealthy?
Canada is a prosperous country due to its strong and diverse economy. The majority of the economy is based on the mining of natural resources including zinc, gold copper, nickel and which are widely used all over the globe. Canada has also been a major participant in the oil industry with a number of large oil companies. It is also home to a huge financial sector that includes numerous banks and financial institutions as well as a huge real estate market.
Canada is a well-developed country with one of the biggest economies in the world, affecting a large portion of the world’s trade. The most important industries it has include mining, and real estate manufacturing as well as home to the biggest mining firms in the world. A significant portion of its GDP is generated by international trade the top three trading partners being China, the U.S., China, and the U.K.