Canada's Economy
A Trading Nation
Canada has always been a trading nation, and commerce remains the engine of economic growth. Canada has one of the ten largest economies in the world and is a member of the G7 — the group of leading industrialized democracies, together with the United States, the United Kingdom, France, Germany, Italy and Japan.
In 1988, Canada enacted free trade with the United States. Mexico later joined, creating the North American Free Trade Agreement (NAFTA), since replaced by a new agreement (CUSMA/USMCA). Together the three countries form one of the world's largest free trade zones, with a combined population of over 400 million people.
The United States is Canada's largest trading partner, and the Canada–U.S. trading relationship is the biggest in the world. Millions of Canadian jobs depend on exports — especially exports to the United States — which is why international trade matters so much to Canada's standard of living.
Key points
- Canada has always been a trading nation.
- Canada is a member of the G7, the leading industrialized democracies.
- Free trade with the United States began in 1988; Mexico later joined under NAFTA (now CUSMA/USMCA).
- The United States is Canada's largest trading partner.
- Canada and the U.S. share the biggest two-way trading relationship in the world.
- Millions of Canadian jobs depend on exports, mostly to the United States.
Exam vocabulary
Three Main Types of Industry
Canada's economy includes three main types of industries: service industries, manufacturing and natural resources. Service industries are by far the largest — more than 75% of working Canadians have jobs in services such as transportation, education, health care, construction, banking, communications, retail, tourism and government.
Manufacturing companies make products to sell in Canada and around the world — paper, high-technology equipment, aerospace technology, automobiles, machinery, food and clothing. Most manufactured exports go to the United States.
Natural resources industries — forestry, fishing, agriculture, mining and energy — have been part of Canada's history since the earliest days. Today they provide a significant share of exports and remain vital to the prosperity of many parts of the country.
Key points
- Canada has three main types of industries: service, manufacturing and natural resources.
- Service industries are the largest — they employ more than 75% of working Canadians.
- Service jobs include transportation, education, health care, banking, tourism and government.
- Manufacturing makes products like cars, aerospace technology, paper and food; most exports go to the U.S.
- Natural resources include forestry, fishing, agriculture, mining and energy.
- Natural resources have been important since Canada's earliest days and still make up a big share of exports.