Nick Duffy

International Trade

Country Profile

10/31/17

Canada

The goal of this research paper is to obtain value information about the economy of

Canada, specifically in regard to the trading that the country does. First, I will provide general

information and statistics about Canada and its economy, which will be important and helpful

when trying to understand the country’s role in international trade. Then I will discuss the role

Canada plays in international trade, and break down the information into imports and exports.

There will be additional information regarding Canada’s most valuable trading partners.

The Government of Canada is formally known as Her Majesty’s Government. It is a

federal parliamentary democracy under a constitutional monarchy. The head of state is

represented by the Governor-General, and the head of the government is the Prime Minister.

The monarch is Queen Elizabeth II. Canada gained independence from the United Kingdom on

July 1, 1867.

Canada’s economy is very similar to the US market-oriented system. There are also

similarities in the patterns of production and the high living standards that both countries display

(cia.gov). Before World War II, Canada had a very rural economy. After the war it became

much more industrial and urban, thanks to the growth of its manufacturing, mining, and service

sectors. Canada is known for its abundance of natural resources, especially oil and natural gas.

Canada is behind only Venezuela and Saudi Arabia for the most oil reserves, and is the world’s

sixth-largest oil producer (cia.gov).

 The population of Canada in 2016 was 36.29 million. Its 2016 GDP was $1.529 trillion

USD, which was the tenth largest in the world. The GDP per capita was $46,400. The real GDP

growth rate was 1.4%. The growth rate in 2015 was only 0.9% due to the large decline in oil

prices. In 2016 1.7% of the GDP came from agriculture, 27.5% came from industry, and 70.8%

came from services. The currency used in Canada is the Canadian dollar. Today, one Canadian

dollar is equal to 0.78 US dollars. The 2016 unemployment rate was 7% and the labor force was

19.44 million Canadians (cia.gov).

According to the Economic Complexity Index, Canada is the 12th largest export economy

in the world, and the 34th most complex economy (OEC). In 2016 Canada exported $393.5

billion. 76.4% of these exports went to the United States, and 4.1% went to China (cia.gov). The

country’s top exports include motor vehicles and parts, industrial machinery, aircraft, crude oil,

and wood. In recent years, Canada has been exporting more and more services, such as

financial, computer, and management services. This is due to the rise of the Internet and the

digital economy. This has made it easy and beneficial for Canada’s banks and insurance

companies to sell its services to international customers (conferenceboard.ca).

Canada’s total imports in 2016 was $413.4 billion. This resulted in a trade deficit of

$19.9 billion. Its largest export partners, US and China, are also Canada’s largest import

partners. 52.2% of Canada’s imports come from the United States while 12.1% come from

China. Mexico is responsible for 6.2% of Canada’s imports. Canada’s top imports include

machinery and equipment, motor vehicles and parts, crude oil, chemicals, and electricity.

Canada’s largest trading partner by far is the United States. This is due in large part to

the Canada-US Free Trade Agreement (1989) and the North American Free Trade Agreement

(1994). Together, these countries have the most comprehensive bilateral trade relationship.
Over 75% of Canada’s exports go to the United States. In 2016, Canada was the third largest

goods supplier of the United States (ustr.gov). Canada is also the largest foreign supplier of

energy to the US (cia.gov). This energy comes in the form of oil, natural gas, and electric power.

Canada also receives a lot of imports from the United States, such as vehicles, machinery, and

mineral fuels. In 2016, the United States’ largest goods export market was Canada. In the same

year, Canada had a trade surplus with the United States of $12.1 billion.

Although Canada and the U.S. have been important trading partners to each other for

over 25 years now, their relationship has been up in the air since President Trump took office in

January. This is because President Trump has been threatening to end NAFTA if he can’t

renegotiate a better deal for the US. According to an article from CBC News, an international

trade lawyer is warning Canadian businesses to start contingency planning as the possibility of

Trump walking away from a deal becomes more real. The article also mentions that the U.S.

business and agriculture community is trying to convince Congress that they are not on board

with ripping up NAFTA.

Canada is one of the world’s top trading nations. It is the twelfth largest exporter in the

world. Some of its top exports include cars, crude oil, natural gas, and electricity. In the past

few years, Canada has increased its exports of services, such as financial and computer services.

It is a mixed, highly globalized economy, who’s GDP was tenth largest in the world in 2016.

Canada’s largest trading partner by far is the United States. The two countries have enjoyed a

strong trading relationship for the last 23 years. However, recent news from Washington, D.C. is

telling us that President Trump may not sign on to new NAFTA agreement if he does not work

out a deal that he believes is favorable to the U.S. This worries many businesses in both Canada

and the U.S. alike.

 Bibliography

“Canada.” OEC - Canada (CAN) Exports, Imports, and Trade Partners,

atlas.media.mit.edu/en/profile/country/can/.

Hodgson, Glen, and Danielle Goldfarb. “Services Exports: Canada’s Quiet Growth

Engine.”Services Exports: Canada's Quiet Growth Engine, The Conference Board of

Canada, 6 May 2015, www.conferenceboard.ca/press/speech_oped/15-05-

08/services_exports_canada_s_quiet_growth_engine.aspx.

The Canadian Press. “Be Ready for Anything, Trade Expert Tells Canadian Businesses as

NAFTA Talks Plod.” CBCnews, CBC/Radio Canada, 30 Oct. 2017,

www.cbc.ca/news/business/nafta-trade-talks-1.4378071.

“The World Factbook: CANADA.” Central Intelligence Agency, Central Intelligence Agency,

26 Oct. 2017, www.cia.gov/library/publications/the-world-factbook/geos/ca.html.

“U.S.-Canada Trade Facts.” Canada | United States Trade Representative, 17 Oct. 2017,

ustr.gov/countries-regions/americas/canada.