Canada's Global Economy

In analysing Canada’s economy on the global scale it is evident that they are one of the most economically advanced countries in the world having the eighth largest economy. In recent times Canada has moved away from being an economy based exclusively on natural resources, Canada is quickly moving toward a knowledge-based economy built on innovation and technology. Canada is also becoming a smarter economy: Canada’s knowledge-intensive industries are generating advances in their capability to manufacture high-tech machinery and equipment, and encouraging industrial modernization as an end result (Canadian economic observer, 2007). On the argumentative side it is evident that Canada has developed a strong economy due to having vast natural
resources to export like energy resources, agricultural products, gold, nickel, uranium and lead but in recent times Canada has become a multi-skilled economy no longer just relying on the export of natural resources. Canada has also became an economic powerhouse due to having a skilled labour force and having modern capital plant.
Canada’s service sector has had a major influence on their economy as the service sector accounts for two thirds of their GDP. The major reason why the service sector is so influential to Canada’s economy is that 12% of the Canadian population are employed through the service industry (Canada Economic Observer (2007) . In discussing security matters it is evident that Canada is a low risk country to conduct business with. The reason why Canada is a low risk country to conduct business with is that they have tight government controls and also have tight import/export regulations. Canada are an extremely developed country which is very safe to do business in, so international investors can be confident in doing business within Canada without the risk of downfalls. The obvious risks of doing business within any country are bribery, corrpution and various culture issues but international investors can overcome these risks by showing professionalism and conducting business in a concise
fashion.

In talking about Canada’s overall economic growth it is evident that in recent times they have experienced vast amounts of growth. Now the Canadian economy are looking to see increased consumer spending, increased job creation and exports will also increase considerably which will see sustained growth over a ten year period which will see strong economic development (Prokopy, 2003).

One of the heaviest influences on Canada’s economy is the United States of America.
Canada and America have an extremely close trading relationship with Canada being the US’s largest trading partner (Redlinger, 2007). The US and Canada have a strong energy trading relationship with 66.7 billion being exports from Canada. The primary components of U.S. energy trade with Canada are petroleum, natural gas, and electricity. Canada is the United States' largest oil supplier and the fifth-largest energy producing country in the world which makes way for a strong economy (beaureau of western hesmisphere affairs, 2005). As the United States and Canada have a strong trading relationship they formed the North American free trade agreement. The members of the North American free trade agreement are Canada, America and Mexico and as of 2008 remains the largest trading block in the world. Since the formation of the North America free trade agreement there has been a dramatic increase in economic integration between the US, Canada and Mexico(Canada country review, 2008). It could be said that the North American free trade agreement is the major reason why Canada has experienced quick economic growth in recent times. Since the establishment of the North American free trade agreement trade barriers have been eliminated on resources like motor vehicles, textiles, agricultural products and lead which has been extremely beneficial to Canada’s export
market.

Exports account for a third of Canada’s GDP so it is evident that Canada are utilizing their natural resources very well which draws back to Adam Smith’s economic philosophy. Adam Smith expressed the economic view that in order for a country to be successfully economically they have to best utilize the resources they have advocating self-interest (Stein, 1993). Canada are aware that they have very important resources like energy sources and agricultural products that countries will need so therefore they are constantly implementing globalization strategies and forming important free trade agreements that will essentially bring economic growth and integration to all parties.

Not only have Canada formed strong trading relationships with the United States and Mexico but now they are fully embracing globalization being one of the top globalized countries in the world and are forming trade agreements with other countries like Chile, Costa Rica and Israel.