Canadian Economy

Canadian economy
Figure 1.--Canada has an important industrial sector, but agriculture and raw material extraction are both very important, especially petroleum. This snapshot was found in Englnd, but taken in Canada. It was sent to relatives in Englnd. The building in the background with plank siding is a good indication that it was North american and not English. Canadian agricuktural is centered on grain production from the prarie privinces, but there is also wool production. This snapshot was probably taken in the 1920s. An incription reads, "Cousin Nancy & Alan in Canada". Notice the great poochkeeping a close eye on on the sheep.

The Canadian and American economies have many similarities with adjacent gepgraphies, similar ethnic mix, and cultural similarities. The largely English legal and political foundation is important, although differences developed after the Revolution (18th century). And Canafa has an important French-speaking minority in Quebec. Canada has both important agricultural and industrial components and heart of the economy is the extraction of natural resources, both renewble and non-renewable. Canada in the early-20th century began to build an important industrial sector, largely linked to the United States. American automobile opened subsidiaries in Canada. This industrial development allowed Canada to build one of the largest navies (in terms of vessels) which played a key role in defeating the German U-boat menace in the North Atlantic during World War II. Admiral Dönitz planned to fight the British Royal Navy and eventually the U.S. Navy, but did not even think the Canadians had a navy or could build one. Canada after World War II followed the European welfare state model. A range of entitlements and social benefits were financed by massive defecit spending. The defecits reached such levels that they were adversely affecting the economy (1990s). The Canadian dollar fell way below parity into the 70s in exchange rates. Unintended consequences also caused priblems. Generous unemployment benefits were one of the problems. Designed to protect workers from unemployment, they actually raised unemployment rates. Many workers found that they could get by working only a few months out of the year. Conservative goverments implemented arange of reforms which lowered unemployment. lowered business tax rates, and sharply reduced deficit spending and debt. The Canadin dollarnot only recovered bu exceeded parity with the U.S. Navy. A major reason for this was the strength of raw material exports, especilly oil to the United States. The fall in oil prices has severely affected the Canadian economy, especilly because much of the Canadian oil is hight cost production. This has resulted in a precipitous fall of the Canadian dollar since 2014.







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Created: 10:38 PM 2/4/2016
Last updated: 10:38 PM 2/4/2016