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Canada: an economic profile

canadianmoney

Whether it's living in the shadow of the world's preeminent superpower or because the international media seems only ever to assign it a background role in international affairs, it's all too easy to underestimate Canada's economic clout.

The 10th largest economy in the world and the United States' biggest trading partner, Canada is a serious economic player. Don't let the fact that Britain's Queen is the nominal head of state fool you; the long-term economic prospects for Canada are arguably brighter than for Europe's erstwhile imperialists.

Admittedly, it shares the same demographic problems as other developed nations. However, it's staggeringly low population density - Canada is 228th out of 239 countries - means it can accommodate the young immigrants needed to support an ageing population much more easily than Western Europe or Japan. 

And Canada has little problem attracting skilled workers and innovative entrepreneurs from around the globe given its consistently lofty position in measures of economic dynamism, ease of starting a business and, in particular, standards of living. No surprise then that many a business for sale in Canada is bought by foreign nationals.

Black gold

It also has oil - and lots of it.  Only Saudi Arabia has greater reserves. 

Canada arguably enjoys the best of two worlds: the skilled workforce, top-class infrastructure and reliable political and legal frameworks characteristic of developed economies and vast resources of emerging 'BRIC' countries

The world economy's continuing reliance on 'black gold' seems to assure that revenues from this precious commodity will carry on rising inexorably. The breakneck growth of China and India, which has generated insecurity among a US with a hegemony under threat and European powers with memories of empire to measure their decline against, serves to inflate the price of oil and other resources which Canada has in abundance.

Revenues from zinc, uranium, gold, nickel, aluminum, lead and timber put the country in a better position to absorb the growing demands on its welfare state and maintain and improve its already impressive infrastructure than other advanced nations. 

And while its counterparts in the G8 wrestle with the political dilemmas attendant with a reliance on other states for their energy, Canada is actually a net exporter of energy. The country has vast offshore deposits of natural gas and oil. 

Unsurprising then that as of 2008 Canada had the smallest government debt of any G8 country.

Canada arguably enjoys the best of two worlds: the highly skilled workforce, top-class infrastructure and reliable political and legal frameworks characteristic of developed economies and the vast resources and landmass of the emerging 'BRIC' countries - Brazil, Russia, India and China. 

Although its primary sector is significant, the Canadian economy as a whole is dominated by the service sector, employing about three quarters of its citizens. 

As of 2010, manufacturing accounted for 13% of GDP, a 2% shrinkage since 2005, so the sector was particularly badly hit by the financial crash during that period. That said, the industry's long-term decline has been less precipitous than its counterparts' in other First World nations. 

Canada is one the world's largest agricultural exporters, particularly of wheat and grains.

Business friendly

In the World Bank's 2011 Doing Business Report, it is ranked as the seventh easiest place to do business in the world, up two places on 2010. Entrepreneurs thinking of setting up an enterprise in the country will be interested to learn that in terms of starting a business, it was adjudged the third best place globally, beaten only by Hong Kong and Singapore. 

And it was deemed the fifth best for protecting investors and third best for closing a business. On paying taxes the government has apparently made impressive progress in simplifying and easing the burden, as the country leapt 17 places to 10th in the rankings. 

Canada was not among the best performers, however, when it comes to enforcing contracts (58th) and registering property (37th).

In seventh place, Canada ranks above even the US on the Heritage Foundation's 2010 index of economic freedom, with factors including corruption, trade barriers, tax levels, quality of the legal system and regulatory constraints. The country scored particularly well for business freedom, trade freedom, freedom from corruption and property rights.

Three Canadian cities are featured in the top 50 for doing business, as well as in BusinessesForSale.com's lowdown of the Canada's top business destinations. Toronto was highest in 12th, followed by Montreal in 27th and Vancouver immediately behind on 28th in the Mastercard Worldwide Centers of Commerce Index.

If Canada is a great place to do business then it is - according to the Economist Intelligence Unit at any rate - absolutely peerless as a place to live. In Vancouver it boasts the world's most 'liveable' city, meaning it offers widespread availability of goods and services, low personal risk and an effective infrastructure. Toronto was also ranked highly in fourth, likewise Calgary in fifth place.

In Mercer's Quality of Living Survey, which compares safety, education, hygiene, health care, culture, environment, recreation, political-economic stability and public transportation, Canada fares less spectacularly, but still impressively. Vancouver is the best performer in fourth, followed by Ottawa in 14th, Montreal in 21st and Calgary in 28th.


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