Canadian Business Cycles

Topics: Inflation, Monetary policy, Unemployment Pages: 7 (2355 words) Published: April 23, 2013
Canada became a self-governing dominion in 1867 while retaining ties to the British crown. Economically and technologically, the nation has developed in parallel with the US, its neighbor to the south across the World's longest unfortified border. Canada faces the political challenges of meeting public demands for quality improvements in health care, and education, social services, and economic competitiveness, as well as responding to the particular concerns of predominantly francophone Quebec. In addition, Canada also aims to develop its diverse energy resources while maintaining its commitment to the environment. Canada is a well-developed country that resembles the United States in its market oriented economic system. This system is characterized by the private ownership of resources and the use of markets and prices to coordinate and direct economic activity. It is an industrial society in the trillion-dollar class, and is currently The United States most important trading partner. Since World War II, the impressive growth of the manufacturing, mining, and service sectors has transformed the nation from a largely rural economy into one primarily industrial and urban. The 1989 US-Canada Free Trade Agreement (FTA) and the 1994 North American Free Trade Agreement (NAFTA) (which includes Mexico) touched off a dramatic increase in trade and economic integration with the US. Canada enjoys a substantial trade surplus with the US, which absorbs about three-fourths of Canadian exports each year. Canada is the US's largest foreign supplier of energy, including oil, gas, uranium, and electric power. Given its great natural resources, skilled labor force, and modern capital plant, Canada enjoyed solid economic growth from 1993 through 2007. The proceeds from the global economic crisis, dropped into a sharp recession in the final months of 2008 and Ottawa posted its first fiscal deficit in 2009 after 12 years of surplus. Canada's major banks, however, emerged from the financial crisis of 2008-09 among the strongest in the world, owing to the financial sector's tradition of conservative lending practices and strong capitalization. During 2010, Canada's economy grew only 3%, due to decreased global demand and a highly valued. The chart below shows a clear understanding of how the GDP rates were affected: •GDP (Purchasing Power Parity)

$1.335 trillion (2010 est.)
$1.297 trillion (2009 est.)
GDP (Official Exchange Rate)
$1.564 trillion (2010 est.)
GDP (Real Growth Rate)
3% (2010 est.)
-2.5% (2009 est.)
GDP Per Capita (PPP)
$39,600 (2010 est.)
GDP Composition by Sector
Agriculture: 2%
Industry: 20%
Services: 78% (2010 est.)
Labor force
18.59 million (2010 est.)

Inflation rates are the rate at which prices for goods and services increase and measures against the standard level of purchasing power of the dollar. The main source of measured data is through Consumer Price Index. The inflation rate in Canada was last reported at 3.3 percent in March of 2011. Between 1915 and 2010, Canada’s Inflation Rate averaged 3.26 percent. The highest rate of Inflation was reported in June of 1920 at 21.60 percent, and the lowest was reported in June of 1921 at -17.80 percent. The Public service is a term used to describe services that are provided by the Government to its citizens. They are generally provided through a public sector. These services are provided free of charge. In addition, public services are offered to protect the welfare of citizens and are available to everyone regardless of income. It is often associated with human rights. Also, through public service are public goods which are non-rival and non-excludable. This means that everyone may benefit simultaneously and no one may be denied access. Canada has public police forces that enforce laws, maintain safety and fight crime. The military branches in Canada consist of Land Forces Command, Maritime Command, Air Command, and Canada Command which...

Cited: Statistics Canada. “Economy inputs and outputs” March 2009. 5 May 2011
Canadian Business. “Outlook 2007: Canada, by Province. January 2007”. 5 May 2011<>
Index Mundi. “Canada Public Debt” June 2010. 5 May 2011<>
IBTIMES. “Canada employment picks up steam in April”. April 2011. 5 May 2011<>
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