The Remarkable Economy of Canada

this is candor a highly advanced first world country blessed with an abundance of natural resources and polite people this nation is often a side thought when compared to its far more influential and much louder brother to the south but Canada is an extremely important economy in its own right with a few key contributors that make it truly unique in the Western Hemisphere for starters it is a Commonwealth country meaning that while it is a free and independent state it still takes a lot of its lessons from its mother back across the Atlantic Ocean the nation is also blessed and cursed by its own geography and another issue worth exploring is the love-hate relationship that Canada has with skilled immigration immigration is an incredibly divisive issue amongst pretty much everyone the same has been true in Canada for a country that is literally known for its politeness this is still an issue that many Canadians are speaking up about now this is an issue I have avoided like the plague on this channel up until now because I know that it can bring out some very not nice behavior in the youtube comment sections but here we go I'm gonna be brave for it while of course as always we will not be getting into the social or political issues involving immigration we are just going to be looking at the economics of how it impacts the nation and its citizens both positively and negatively Canada has one of the highest foreign-born populations in the world as of 2015 the United Nations Department of Economic and Social Affairs estimated that almost 22% of the Canadian population was represented by people not born in Canada it should be noted that this 22% was not entirely made up of non Canadian born citizens but also a mix of foreign citizens living in the country permanently on a range of visas that the country offers from student visas to spousal visas and even full working visas which gives the people full rights of a Canadian citizen - the ability to vote and a few other fringe benefits Canada has also been very prosperous in many senses because of this inviting skilled migrants into an economy has a very strong correlation with economic growth this is statistically almost certainty in data confidence levels and has been shown to be the case in almost every other country where it has been studied by bringing in students and skilled workers you are also bringing in their money if an engineer from China moves to Canada they are not going to come over empty-handed they are going to bring cash and will often move into a role where they are contributing significantly more to the economy than what they are taking in a wage I also want to get over the argument that these individuals will be taking jobs that could have otherwise gone to born and raised Canadian citizens because for the most part skilled workers visas are given to people in professions that are severely undermanned in the workforce the equation gets even more favorable when you consider the Canadian student visa program as of 2017 the Canadian Bureau for International Education estimates that there are around two hundred and forty five thousand international students in secondary and tertiary education in Canada that number is on the rise and as of 2019 it is reasonable to believe it would be much higher these students are technically an incredibly valuable export commodity for Canada it sounds silly to say but in the same way that tourists coming to a country is considered an export so to our students the average international student in Canada is getting a significant portion of their income from their home countries typically from wealthy parents sure Canadian student visas do allow students limited access to employment but it is incredibly rare that a student on a student visa in Canada will be self-sufficient on what they can earn from their employment in the country itself so what this normally means is that the average student is paying a lot of money into Canadian schools and universities they are also paying a lot of money to fund their lifestyle while they are in the country and in return Canada is educating them and sending the smarter students back home Canada gets money and the country that the student is from gets a smarter student and looking at it from the most basic level you can see how education is a major export just the same as anything that can be loaded into shipping containers students on student visas are the closest thing an economy can get to a shot of pure cash injected straight into the system school migration is not without its flaws though the most apparent of which is the severe cost of living increases these wealthy migrants can with them most notably in the real estate market Vancouver Canada is a popular city for wealthy migrants into Canada its natural beauty legendary safety and proximity to the American West Coast makes it a popular destination for wealthy migrants and it's world-famous universities make it an equally popular destination for international students the influx of these wealthy foreign residents has caused huge appreciation in the property prices in the city we have explored this issue briefly before when we were looking at the economy of Australia who has had similar phenomenon impact its major cities but in Vancouver Canada the effects are much more apparent for many born and raised Canadians this has made home ownership unattainable because average properties in the suburbs of Vancouver are easily selling for over ten times the national average wage what is potentially worse is that land taxes levied on the residents of Vancouver are based on the values of the properties that they occupy meaning that retired residents are facing the possibility have been pushed out of a fully paid off home simply because they are having to pay taxes based on a market price 20 or 30 times higher than the property's original purchase price this does very quickly turn into a social argument of whether people have the right to own a very valuable home simply because they are the citizens of that country but again we were avoiding this if we can what can be noted though is that economies with high instances of home ownership tend to be more prosperous long term and this trend may start starving Canada of that typical economic milestone we have explored resource-rich economies on the channel before most notably Norway Australia and the Democratic Republic of the Congo which are all wildly different economies at their core basically Norway was super responsible with its natural resource well effectively nationalizing majority of the revenue and putting it towards an investment fund Australia did benefit from its resources through jobs and industries in the nation but it was actually pretty limited and a lot of critics note that much of the wealth here was pilfered by mining companies and the average Australian didn't see much tangible benefit from the resource boom on the bottom of this scale are countries like the Democratic Republic of the Congo which as we have discussed is an incredibly resource rich country with incredibly poor citizens because of severe political and structural issues facing the country itself Canada lies somewhere in the middle of this resource wealth responsibility spectrum it does have mining taxes aimed at returning the natural wealth of the nation back to its citizens this comes in the form of a federal mining tax as well as a mine tax for all of the provinces and territories of the country apart from Prince Edward Island because it doesn't have any mines there so you know this is actually pretty responsible once materials are dug out of the ground and exported they are not coming back again so it is crucial that some of that revenue from these resources goes into the future of the nation for a time when it cannot rely on exporting these resources I don't want to get too bogged down in - industry for the most part we have already explored what resources can mean for an economy if handled correctly or if handled poorly what I do want to explore though is how the Canadian mining industry and its economy as a whole is impacted by its geography so you came for economics and you are going to get a geography lesson I'm sorry but in Canada's case this is actually something truly important Canada is blessed in many ways with its position in the world it has a very strong stable military political and industrial a lighter that South with the United States the United States is home through the largest and most valuable consumer market in the world and Canada is one of two countries with a direct land connection to this nation the other been Mexico which is you know on slightly less awesome terms this of course means that a vast majority of foreign trade is conducted with the United States which is a very lucrative arrangement to have beyond this it has also meant that the Canadian government has not had to contribute as much money towards defense spending because nobody in their right mind is going to invade North America in the 21st century I would hope this can be seen directly with comparable Commonwealth nations like Australia with a slightly smaller landmass and a slightly smaller population contributing 50% more of their GDP towards their annual military spend this location also means that Canada has direct access to both the Atlantic and Pacific Oceans to directly trade with Europe and Asia which again is hugely beneficial to an economy like Canada it's not all roses though Canada's geography has in many ways impacted its economy negatively a majority of Canada's landmass is sparsely populated Arctic tundra this is also coincidentally where a lot of its resources are this makes resource extraction far more expensive than it would be in a regular economy if you have ever watched Ice Road Truckers you will know that the conditions that these mines operate in is extreme and it costs a lot of money to run these facilities when compared to mines in Australia or the United States or stable middle-eastern countries the average Canadian mine has a lower profit margin because of these environmental expenses perhaps the most topical example of this holding back the Canadian industry is its shale oil reserves shale oil production is done through a very intense industrial process that makes it more costly than simply pumping liquid crude oil out of the ground but it is still an industry that has seen much success in many countries around the world including the United States Canada has all of the right conditions to capitalize on this type of oil productions for starters it has shale oil great it would also have people willing to invest the hundreds of millions of dollars it takes to set up these facilities because Canada is a safe stable democracy that protects the interests of free enterprise it also has the abundance of water needed for these operations and it also has locations desolate enough to conduct these operations without impacting nearby populations because fracking is pretty terrible for the in local environment it has to be said the only real reason shale oil production hasn't really taken off yet is because there are just better investments to be made in the mining industry shale oil extraction is already more costly than liquid oil extraction and then when you couple that with the additional expense from operations in harsh environments like Canada it just makes more economic sense to invest in more lucrative oilfield in other countries Canada is a huge developed market power that attracts a lot of confidence from people all over the world looking for a country to trade with or invest in or even to call home it is not a country without fault no country is it's not even a country that is free from debate over very important issues but if Canada can continue the efforts it is made to running a stable safe and efficient country it is likely that the prosperity of its citizens will continue for decades into the future thanks guys I hope you enjoyed the latest video if you did please consider liking and subscribing otherwise as always I will be hanging out on a new discord server which now has over 1,500 members and it is full of really great discussions amongst people of all economic persuasions I will be chatting live on the server for an hour after this video goes live but otherwise I do my very best to reply to all serious comments in the comment section below thanks guys bye

Channel: Economics Explained

Views: 1,325,666

Keywords: the economy of canada, the economics of canada, the economy of canada explained, the economics of canada explained, canada economics explained, economics explained canada, canada economy explained, canada economy, canada economy economics explained, economics, canada economics, how canada economy works, how the canadian economy works, canadian economics, canadian economy, canadian economy explained, canadian economics explained, economics explained

Id: uRnIHyI02EU

Length: 11min 51sec (711 seconds)

Published: Sun Nov 10 2019