Canada’s Economy

Unit 5 Notes

3 Economic Questions…

What to Produce?– Businesses decide and government approves/denies it

How to produce it?– Businesses decide & government regulates

procedures

For whom to produce?– Businesses decide based on supply & demand (price)

Which economic system does Canada have?…

Canada’s Economic System

Canada has a Mixed economic system– It’s actually pretty close to a Market economy;

however, there is some government regulation among industries

– It does have Free Enterprise…

Canada is economically strong!

Canada’s Foreign Exchange Rate

The price of 1 country’s currency compared to another…– 1 US dollar = 1.25 Canadian dollars– 1 US dollar = .77 EU euros– 1 Canadian dollar = .61 EU euros

What does this mean?– The US economy is stronger than Canada’s;

however, the economy of the European Union is stronger than both!

Canada’s Natural Resources

What’s available?– Iron ore, nickel, zinc, copper, gold, lead,

molybdenum, potash, diamonds, silver, fish, timber, wildlife, coal, petroleum, natural gas, hydroelectric power

Canada’s Land Use

What percentage of the land is arable (capable of being farmed)?– 5% (only in Southern Canada; Northern Canada’s

terrain is permafrost!)

What are the major agricultural products?– Wheat, barley, oilseed, tobacco, fruits, vegetables,

dairy products, forest products, fish

Canada’s Industries

What’s being produced in the factories?

– Transportation equipment, chemicals, processed and unprocessed minerals, food products, wood and paper products, fish products, petroleum, natural gas

Canada’s ExportsChief exports:– Motor vehicles & parts, industrial

machinery, aircrafts, telecommunications equipment, chemicals, plastics, fertilizers, wood pulp, timber, crude petroleum, natural gas, electricity, aluminum

Exports total (2007): $431.1 billionTop exporting partners: US (79.3%), UK (2.8%), China (2.1%)

Canada’s ImportsChief imports:– Machinery & equipment, motor vehicles &

parts, crude oil, chemicals, electricity consumer goods

Imports total (2007): $386.4 billion

Top importing partners: US (54.4%), China (9.4%), Mexico (4.2%)

Which country is Canada’s biggest trading partner?

Canada’s Literacy Rate

What percentage of people over the age of 15 can read and write?– 99%

How long are students required to stay in school?– 17 years

Canada’s Unemployment Rate

What percentage of people do not have jobs?– 6%

What percentage of people live in poverty?– 10.8%

Canada’s GDP

$1.271 trillion (2007)

GDP Per Capita--What is the value of goods and services produced per person?– $38,600 (2007)

4 Factors That Effect Canada’s GDP

Human Capital: Canada is investing in education & training (check out literacy rate!)Capital Goods: Canada is investing in new technology & building new factoriesAbundant Natural ResourcesEntrepreneurship

North American Free Trade Agreement

Signed by the US, Canada, & Mexico in the mid-1990sEliminated trade barriers between the 3 countriesFree Trade between the 3 countriesHow has it affected Canada’s economy?– It eliminated trade barriers with US & Mexico, and

allows them to trade more freely at a better cost

Canada’s Economic ProblemsUnemployment & poverty

Over depletion of natural resources

Acid rain from factories near Great Lakes region

Improving public services (which forces the country to raise taxes)