Known for merciless winters, Moraine lake,
Maple Syrup, polite people, and not so polite hockey players… Canada is a G7 member and the 9th biggest
economy in the world by GDP. If you are a Canadian watching this video,
don’t forget to say sorry in the comment section, eh? Canada is a commonwealth country based on
the principle of “Peace, Order, and Good Government”. Some say it's slightly inclined towards the
need for the common good while accepting moderate limits on individual freedom. But, Canada is not a socialist country. It is a capitalistic economy based on the
accumulation of capital, production of wealth based on the wage-labor relationship between
the owners and workers, and the means of production through mostly privately-owned companies generating
profits for their owners. Yes, the country does have a developed social
security net. But many people fail to understand that having
welfare programs does not make a country socialist. You can call it a mixed market economy, but
that mixture consists of capitalism and minimum state regulation, instead of a mixture of
capitalism and socialism.
Canada, just like many developed nations,
followed a sequence of transitioning from a raw-material-based economy to a manufacturing-based
economy, and finally transitioning again to a service-based economy. In an earlier video, we discussed that most
service-based economies happen to somehow have their service sector around 70% percent
of the total GDP. This pattern is true for the Canadian economy
as well. Ranked among the top ten countries on Economic
Freedom Index, the Canadian economy has some resemblance with the Australian economy. Australia has Magpie attacks and Canada has
Geese. Sorry, let us get back to the economic-only
similarities. Both economies are wealthy and industrialized,
both have housing bubbles, both are highly exposed to international trade and commodity
prices. Both are disproportionately reliant on one
trading partner… in Australia's case, it's China, and in Canada’s case, it's the United
States. Both countries are making an effort to diversify
their economy. And both have been keen for more immigrants
to boost the economy. Canada’s fertility rate or should we say
the breeding rate is among the lowest. This rate is below the replacement levels. On the other hand, it has a growing aging
population. When it comes to the aging population, Canada
is no Japan and not even like Germany or Italy, but with a 17% population over 65 years old
it's not far behind. Further complicating the situation is the
combined median age of nearly 42 years.
Let’s put this all together. A growing number of older people utilizing
social and other services without contributing to the economy… a small working-age population
paying for all this… a low birth rate of children that are supposed to grow up to join
the workforce… all this makes the country incline towards more open immigration policies
so a bigger working-age population could be achieved. After all, there are only enough taxes you
could put on the high earners under the slogans of “tax the rich”, and you can’t cut
back on the social service benefits either as the existing population is used to of them. The population problem is the crux of the
whole matter. Bringing more immigrants into the country
is more of an economic decision than a moral one and has nothing to do with the catchwords
like diversity, inclusivity, and multiculturalism. The country is managing its immigration system
for the economic benefits of Canada and not for the immigrants. The country wants you to contribute to the
economy but it also wants you to breed. Canada has a high foreign-born population
that accounts for nearly 8 million people which is over %21 of its total population. Immigrants work hard, they are usually in
their working age, they become part of the taxpaying population, they utilize fewer social
services, many of them could accept jobs that locals are less inclined to carry out. And most of them are also grateful for letting
them enter the country due to the lack of opportunities back home and other reasons. And they have better fertility rates relatively. And they also bring foreign money to increase
cash flow. Rich immigrants bring foreign money to the
land although it has a downside that it could be one of the contributing factors of property
prices surge. Then there are skilled workers who bring their
skills, obviously. However, the government does not have a partnership
with private companies so if you don’t get the job then it's your loss. Then there are temporary form workers to fill
in the jobs that Canadians are less likely to opt-in. And last but not the least, student immigrants
get to study in some of the highest-ranked universities in the world. But for Canadian universities, foreign students
are a vital source of income bringing billions of dollars into the country. Foreign students have to pay much higher tuition
fees than the locals. It's economically viable for Canada to let
the import of money pouring in. Education is surely a lucrative business. Canada is an energy superpower with the third-highest
natural resources valued at US$33 trillion. The country has the third-largest proven petroleum
reserves, and it is the fourth-largest oil exporter in the world with Alberta and Saskatchewan
taking the lead. But, despite sitting on gigantic oil reserves,
it also imports oil for domestic consumption due to various reasons. Canada’s oil is supposedly “extra-heavy”
and it's more expensive to extract, refine and transport. The oil economy can grow and shrink based
on the global market prices. When the price is high, it’s profitable. When the price is down, It is unprofitable
for Canada to sell it. This is true for any business. If your competitor offers the same or better
product at a lower price, you are out of business. It makes Canada incline towards oil imports
from the US and Saudi Arabia. Another debate-able reason for importing oil
is the lack of new pipelines within the country that could increase the availability of domestically
produced oil. All these factors make Canada look for alternative
energy sources for future energy demand instead of relying on other countries. It has comparatively little to do with caring
for the environment and more to do with economics. Canada is a collection of smaller regional
economies. Some regions want to keep the dependence on
oil while others wish the economy to go all green. Some opinions advocate for a gradual and properly
phased shift before it is replaced by alternative energy sources that are cost-effective as
well as reliable. But no one has a clear answer. Another reason to move away from oil dependence
is the need to diversify the economy. Almost all Canadian oil exports go to the
US. Staple Thesis is a theory that suggests the
export of natural resources from Canada to other advanced economies has a pervasive impact
on the economy as well as on the social and political systems. Different stapes like oil, minerals, forestry,
fishing, etc. impact the rates of settlement as well as federal-provincial conflicts. Some say that the economy could still evolve
and diversify while others suggest it could permanently get locked into dependency as
a resource hinterland. In simpler words, Canada is used by larger
countries for staple resources, and it is tied to larger markets leaving it less likely
to explore its own destiny. Canada ranks 36th on the Economic Complexity
Index, which means its economy is less diversified among different sectors relative to other
countries ranked top on the list. However, it's still diversified enough, at
least much more than Australia. So, it won’t be right to call it an Oil
country as it has other sectors including real estate, construction, finance & insurance,
logging, automobile, etc. Canada is the world’s biggest exporter of
maple syrup. It accounts for over 75% of global production. But, contrary to the assumptions, the sweet
stuff does not have the biggest impact on the economy. It accounts for around 0.02 to 0.03% of the
total GDP. But, it does have an impact on the economy
of specific regions like Quebec where thousands of jobs rely on the industry. The region also imports seasonal workers from
outside to keep the taps running. Canadians could confirm in the comment section
if the $100 Canadian bill smells like maple syrup. Canada has the longest coastline in the world. It’s among the top contenders that export
fish and fishing products. Lobsters are its top seafood export. While every election in the US, few people
insist they would move to Canada if candidate so-and-so wins, Canada’s trade and economic
propensity are disproportionately dependent on the United States. Canada takes full advantage of having the
biggest consumer market as its neighbor with over 75% of its total exports reaching the
United States. As the old saying goes, when the U.S economy
catches a cold, the Canadian economy sneezes. This is true in most cases except for the
financial sector. Canada also gets security benefits for having
a neighbor like the United States which has the highest military expenditure in the world. Most of the Canadian population is situated
roughly hugging the US border. Canada is smart when it comes to the minimum
wage. The country has no single minimum wage for
the entire country. Instead, the provinces and territories set
and impose their own separate minimum wage rates. Canada has one of the highest ‘Household
Disposable Income, which is a measure of money a household is left to spend or save after
income taxes have been deducted. While disposable income is shown off as a
shiny number, not many people talk about ‘Discretionary Income’, which is the amount of income left
after all necessities are covered. Disposable income does not calculate wealth
as it does not take into account the cost of living and average expenditures. This is how most of the advanced economies
are generating working poor with the illusion of wealth. On the other hand, discretionary income data
is poorly reported by most countries. Canada is no Switzerland or Norway when it
comes to the cost of living, but it’s still in the top 25 list. Consumer goods are expensive, although it
mostly depends on where you are living within the country. Canada is also among the countries with the
most expensive childcare when calculated by the percentage of the couple’s average earnings. Canada has one of the highest household debts
compared to income levels. These are mainly taken for mortgages and it
fuels the housing market. Canadian household debt as a percentage of
disposable income has risen above %170. Housing in some areas is an obvious bubble
with Vancouver and Toronto taking the lead.
Growing the manufacturing sector in Canada
is somewhat impractical. High wages do not allow it to compete against
the countries that have a low-wage workforce. Cheap imports beat out any hopes for a large-scale
manufacturing base. This is making the existing manufacturing
industry slowly die out or be dependent on government subsidies. Canada has an awesome single-payer health
system. Although it's falsely advertised as a “free
healthcare system” and should rather be called a Publicly Funded Healthcare. Healthcare spending represents nearly 12%
of the country’s GDP. While some Americans are quick to point out
flaws in Canadian healthcare and you can discuss the comparisons between the US and Canadian
healthcare in the comment section below, nonetheless, Canada’s healthcare system works great for
most of the population. Agriculture is not Canada’s plus point and
accounts for %1.6 of the total economy. You can partly blame the country’s harsh
climate. There is an abundance of imported food available
at a much cheaper price relative to domestically produced food products. However, the government does offer protection
to some agricultural sectors like dairy and poultry, against the competition induced by
the low price imports and to keep some food self-sufficiency. Although this results in higher consumer costs
for some products. Canada is not the best when it comes to traditional
food and cuisine, Poutine is an exception. Kraft Dinner is also very popular. Canada has the largest number of doughnut
shops per capita. They also consume the most doughnuts per capita
in the world, Tim Hortons is surely a contributing factor.
Canada is the second biggest country in the
world by area. From Niagara Falls to the Canadian Rockies
and having the highest number of lakes in the world, tourism accounts for 1% of the
economy. It is something that could be expanded to
its full potential in the future. With its early colonial history, Canada has
two official languages. French and English. Bilingualism throughout Canada results in
the duplication of government services like bilingual signage, forms, advertisements,
etc. using the public purse. A 2012 study revealed that bilingualism costs
about $2.4 billion. Higher education in the country is not a lifetime
mortgage that students take decades to repay like in the US. Canada has a well-educated population. The country ranks one of the highest on the
tertiary education attainment index. Although what is referred to as white-collar
jobs are in short supply. Canada needs more companies like Shopify. But it has a talent drain problem where tons
of skilled workers graduating from universities can go abroad to the South to enjoy better
earnings, a higher consumer base, and a warmer climate.
Forget about natural resources. Any country’s biggest asset is its people. Canada needs to invest in its people, not
by showering more social benefits over them, but by promoting a culture of entrepreneurial
mindsets and innovation. It has to facilitate its population away from
a risk-averse mentality. So they could make things happen instead of
waiting for things to happen to them. Other than that life is great in Canada! We are off to Timmies to get some Timbits
and a Double-Double. We hope you have enjoyed the video. We will try to reply to everyone in the comment
section below. Please like, subscribe, and share to support
the channel.
