Natural resources help Canada bounce back from recession

Richard Green

Canada has one of the largest and most developed economies in the world. What was until the early 20th century a predominantly agricultural economy has now given way to a highly industrialised economy with one of the world’s highest per capita income rates. The country has extensive natural resources and is among the world’s leading exporters of uranium, nickel and zinc and a major producer of aluminium, copper and gold. There are large oil and gas reserves, which were estimated in January 2013 to equal 174 billion barrels of oil and two trillion cubic metres of gas.

Canadian economic links with the USA were initially brought about by the Free Trade Agreement of 1989, which was subsequently enlarged to include Mexico under the North American Free Trade Agreement. High fiscal deficits in the 1980s led to the decision by federal and provincial governments to begin privatising state assets. This began with the privatisation of Air Canada in the late 1980s, with rail networks Canadian Pacific and Canadian National Railway following in the mid-1990s.

The 1990s further saw strong growth for the country, particularly in exports and the services sector. But in 2008, when the world economic downturn caused the collapse of investments and exports, Canada’s economy quickly fell into recession.

The country’s economic recovery began in 2010 with an overall growth of 3.2 per cent, and with steady growth experienced in the years that followed. Most recently, 2013 showed economic growth of a steady 1.7 per cent.

The unemployment rate, which had fallen below six per cent in 2007, averaged eight per cent in 2010, and has remained above seven per cent since 2011.


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