Economic Overview
Canada is one of the wealthiest nations in the world and remains an attractive investment destination, especially for U.S. product manufacturers. The once highly rural society has become a high-tech industrial society within the past century. Post World War II, there was an immense expansion in the Canadian economy. Canada’s new economic growth closely integrated Canadian and US economies, and Canadian economic trends even mimicked those seen in the US.
The 1989 US-Canada Free Trade Agreement (FTA) and the 1994 North American Free Trade Agreement (NAFTA) dramatically amplified trade and economic integration with the US, increasing bilateral trade between Canada and the US by 52%. Due to the low tariff and close vicinity between the two countries, trade has continued to thrive. According to the US Census Bureau, Canada is the top country with which America trades, and there is no sign of slowing down.
Consistently, Canada has remained one of the world’s most stable business climates with a $1.8 trillion US dollar GDP in 2014—11 in the world, according to World Bank statistics. International trade makes up a large part of Canadian economy, and export is primarily successful due to the country’s abundant supply of natural resources. According to Statistics Canada, in 2009, 58% of Canadian exports came from natural resource exports, and another 38% came form machinery, equipment, and automotive manufactured products. The US is Canada’s primary trading partner with total trade between the two countries amounting to $707 billion, according to the Office of the United States Trade Representative. Canada was the United State’s largest goods export market in 2013, totaling $300.2 billion. The United State’s goods export market to Canada continues to grow as US exports to Canada are up 2.6% from 2012, 77% form 2003, and a whopping 319% from 1993 (Pre NAFTA). Exporting to Canada will likely continue to be a fruitful venture.
Because Canada’s economy relies so heavily on natural resources, important questions must be raised about sustainability. Despite Canada being a leading producer for decades, there is little risk of depletion at this time. Large discoveries continue to be made; expansion continues (including offshore oil rigging), and many regions remain largely undeveloped. It appears that Canada will remain a primary natural resource producer, as the supply and demand appears to be consistently increasing.
Due to Canada’s stable business climates, it remains an appealing investment destination. As the wealth of the country progressively increases, consumer spending will do the same. Canada has been, and will remain, a highly attractive investment destination for US product manufacturers.
