Canada: Country and Foreign Investment
Economy and Currency
This page was last updated on 5 June 2019.
Canada’s economic and technological development has been spurred by its close trade ties with the USA, which purchases around 80% of Canada’s exports.
Benefiting from rich natural resources, Canada was able to develop on par with the United States, moving swiftly from a primary (agriculture-based) economy to an affluent services-based economy, with a strong industrial sector.
Most crucial to Canada’s development was the ratification of the 1989 US-Canada Free Trade Agreement, which removed tax barriers to bilateral trade, and aided in the two countries’ economic integration. A later agreement, the 1994 North American Free Trade Agreement (NAFTA), brought about trilateral co-operation on the continent, bringing Mexico into its scope. Canada continues to run a large export surplus with the United States as the latter’s largest supplier of energy, including oil, gas, electricity and uranium.
In 2006, services accounted for 76% of the Canadian economy, with manufacturing accounting for 13%, construction 6%, and agriculture just 2% of gross domestic product (GDP).
Canada’s banks – unlike those of its southern neighbour – did not move from the default position of conservative lending, meaning that the country was quick to bounce back after the great recession. Since 2011, annual GDP growth has risen and fallen but has averaged around 2%.
The currency is the Canadian dollar (C$), which is not pegged to any currency. In 2012, C$1 = US$1.0025.