Canada - Economic sectors

Since the 1970s the Canadian economy has been transformed from one based on industry and mining to one dominated by the service sector. Concurrently, the nation's agricultural sector has declined significantly. All sectors of the economy have incorporated increasing levels of technology. As a result, the economy has become less labor-intensive and more high-tech. In the past, as much as 60 percent of the nation's exports were based on minerals or other resources. However, by 2000, resource-based exports only accounted for 35 percent of

Canada's exports. The world oil shortage continues to fuel Canada's energy exports and Canada remains the world's fifth-largest energy producer when oil, natural gas, hydropower, and atomic power are combined. Major energy companies include Shell Canada, Petro-Canada, BP-Amoco, and Burlington Resources.

The majority of exports are now based on sophisticated technologies. These types of exports include telecommunications equipment, computer software, various environmental technologies, and aerospace products. Canada's Nortel Networks is one of the largest and most respected telecommunications and networking companies

in the world. But like many companies, Nortel was hit hard by the downturn in this market niche in 2001, when it announced it was laying off thousands of employees and would take a loss of over US$19 billion in the second quarter of that year. Automobiles and car parts remain the leading cash export, followed by machinery and equipment. Exports of service-based items increased by 11.3 percent in 1999. Since 1992, the Canadian economy has experienced continued growth. Much of this is the result of trade with the United States, which enjoyed a sustained period of economic progress through the end of the 20th century. The strength of the nation's economy has led to increased levels of foreign investment. In 1999, foreign investment in Canada increased by 10 percent to reach a total of $240 billion. This accounted for 25 percent of the nation's GDP. Financial services, including insurance, accounted for the largest percentage of foreign investment.

The agricultural sector in Canada is undergoing increasing consolidation. Smaller family farms are being consolidated by large agricultural businesses. Since 1991, the number of farms whose output exceeded US$100,000 per year has increased by 10 percent. These large farms were concentrated in Quebec and Ontario, but there was substantial growth in the west. For instance, the province of Saskatchewan has experienced a 30 percent growth in large farms since 1991. There is also an overall decline in the total area of land being used for agriculture. Nonetheless, agriculture remains highly diverse. Crops range from wheat and barley to tobacco and vegetables. There is also significant timber production. Livestock production includes beef and veal, swine, poultry, duck, turkey, and goose. Furthermore, the nation is one of the world's largest fish harvesters. Agriculture accounts for 3 percent of the nation's GDP and 3 percent of its work-force. In 1999, 12 percent of the rural population lived on farms.

Canadian industry has become more efficient and productive by adopting ever-increasing levels of technology in manufacturing. Industrial productivity has increased by an average of 3 percent per year over the past decade. The principal industrial growth sectors include the automotive industry, electronics, computers and computer equipment, aircraft parts and equipment, and building supplies. The automotive sector is Canada's largest industrial employer and is dominated by companies such as Ford and General Motors. The implementation of the North American Free Trade Agreement (NAFTA), a trade agreement between the United States, Mexico, and Canada which eliminates taxes on goods traded between the 3 nations, has expanded industrial opportunities by opening new markets for Canadian exports in the United States and Mexico. However, NAFTA is a double-edged sword in that inefficient industries face increased competition from companies in Canada's NAFTA partners.As a percentage of the overall economy, industry continues to decline although there is sustained growth in specific areas. In 1999, industry accounted for 31 percent of the nation's GDP and 16 percent of employment.

The service sector is the fastest growing segment of the Canadian economy. The nation's highly developed infrastructure has helped support the expansion of services by providing state-of-the-art telecommunications, transportation, and utilities. Services account for 66 percent of the nation's economy and employ 74 percent of the country's workforce. Of Canada's skilled workers, 80 percent are employed by the service sector. The strength of the service sector varies from region to region. Tourism and retail dominate areas of the southeast and west, while financial services are key components of the economy of central Canada. The banking sector is strong and composed of both domestic and foreign banking firms. In an effort to protect domestic businesses, Canada has a number of restrictions in place that limit foreign ownership of companies in the service sector that do business in the country.

Also read article about Canada from Wikipedia

User Contributions:

Comment about this article, ask questions, or add new information about this topic: