Discover Canada VideoBook
Chapter 9: Canada’s Economy

Chapter Summary

Canada has always been a trading nation, and commerce remains a major driver of economic growth. Canada’s standard of living depends on trade with other countries. In 1988, Canada enacted free trade with the United States. In 1994, Mexico joined through the broader North American Free Trade Agreement (NAFTA). Canada is one of the world’s larger economies and has been part of the G8 group of leading industrialized countries.

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Canada’s economy includes three main types of industries. Service industries employ most Canadians and include jobs in areas such as transportation, education, health care, construction, banking, communications, retail, tourism, government, and many other services. Manufacturing industries produce goods sold in Canada and internationally, including paper, high technology, aerospace, automobiles, machinery, food, and clothing. Natural resource industries include forestry, fishing, agriculture, mining, and energy - industries that shaped Canada’s history and still form a large share of exports.

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Canada’s closest economic relationship is with the United States. Canada and the U.S. are each other’s largest trading partners, and most Canadian exports go to the U.S. The two countries share major supply chains and trade a wide range of products, including energy, industrial goods, machinery, vehicles and parts, agricultural products, fish and forestry products, and consumer goods. Large numbers of Canadians and Americans cross the border every year, supported by a long tradition of cooperation and security.