Canada: Executive Summary

Canada Executive Summary

Canada is the world’s second largest country, with an area of 9,984,670 sq km, of which 891,163 sq km is inland water. Canada shares unfortified borders with the United States to the south and US state of Alaska to the north-west.

As at November 16, 2009, the population of Canada was 33.8 million. English (the predominant language) and French are the official languages.

The head of state is the British monarch, Queen Elizabeth II, who is represented in her absence by the Governor General. The country’s parliament consists of the Senate (with members appointed by the Governor General under the advice of the serving Prime Minister) and the House of Commons, members of which are elected by popular vote to serve a maximum of five years. The leader of the majority party in the House of Commons is automatically designated as the country’s Prime Minister. The current Prime Minister is Stephen Harper.

Canada’s economic and technological development has been spurred by its close trade ties with the United States, which purchases around 80% of Canada’s exports. In 2006, services accounted for 76% of the economy, with manufacturing accounting for 13%, construction 6%, and agriculture just 2% of gross domestic product (GDP). The currency is the Canadian dollar (CAD).

Telecommunications services are described as excellent and modern. There are 26 major airports, and the country lays claim to one of the world’s largest railtrack networks. Ports and terminals operating in Canada include Fraser River Port, Halifax, Hamilton, Montreal, Port-Cartier, Quebec City, Saint John (New Brunswick), Sept-Isles and Vancouver.

The housing market, which grew steadily in recent boom years, has been hit, albeit to a lesser degree than elsewhere, by the economic crisis. The market grew by just 0.1% in April 2009 on April 2008. Rental prices for apartments in Canada’s 35 major centres increased by 2.9% over the same period. A significant rise in the housing market and subsequent fears of a significant downturn to follow led the government to introduce measures to protect the market. The measures include a cap in re-financing to 90% from 95%.

Corporation tax rates vary depending on the territories and provinces in which the business operates. The effective federal rate is 28%. Personal income tax rates range from 15% to 29%, depending on the various tax rate thresholds; there are also provincial/territorial personal income taxes. Capital gains are generally subject to income tax on 50% of the gain.

Tax privileged business sectors include, at provincial/territorial level, farming, mining, forestry, oil and gas exploration, and venture capital funds. At the federal level, tax credits are available for film and video production, and for research and development carried out in Canada. Some provinces/territories have enterprise zones that offer incentives to certain businesses, mainly in the form of property tax abatement.

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