Canadian Economy


The Canadian economy is the tenth biggest economy in the world (as of 2016 data), according to the World Bank (and the IMF, and the UN).

Such standing is based on its Gross Domestic Product (GDP) in comparison to other economies in the world.

But what makes Canada special?

And how does it compare to other nations?

Discover the answers below.

Traits of The Canadian Economy

First, let’s see how Canada fares in terms of GDP per capita.

If we hit our trusted CIA World Factbook, we get $46,200.

That puts Canada in spot 34 worldwide. Not bad at all. Especially when you think of its population:

36.3 million people (just the state of California, USA, has more people. Though Cali has proportionally more GDP as well).

“We are the people”

How about GDP breakdown?

The Canadian economy is well-diversified with no single industry taking more than 15% of GDP.

Among the top ones we get real estate, health care, oil and gas extraction, and manufacturing, among others.

Wait, but don’t we talk a lot about oil being super-important to Canada?

We do.

That’s because its line item (which includes mining) is about 8% of Canada’s Gross Domestic Product.

And a big chunk of that is exported.

Hence, price moves and demand/supply shocks in the (volatile) international crude oil markets affect the Canadian economy. And they can’t really do much about it (other than diversify further).

Oil, a true Canadian Export.

Tell me about international trade.

Unlike the United States, where exports and imports are about 13% and 15% of GDP respectively, Canada’s economy hinges on international trade.

What are we talking about here?

Canadian exports make up more than 31% of GDP (2015 data).

While imports add up to 34% of GDP (2015 data).

This means total trade (exports + imports) for Canada constitutes more than 60% of GDP (wow).

Say what?

This means the Canadian economy is highly open.

Note: total trade only gives you an idea of an economy’s openness, do not confuse total trade as a part of GDP. This is because imports are subtracted from GDP, while exports are added.

To top things off?

Its major trade partner is the United States.

Geographically, it makes sense, especially when you take into account the sheer size of the US.

Ok, but how can the US trade only around 15% of GDP (in single flows) while Canada trades 30%, and they’re top partners?


According to the World Bank, Canada’s GDP is about 1.5 trillion, while the US’s is 18 trillion.

Huge difference in size (felt like doing an offhand joke here, but I’m not one to talk).

My Reese’s is bigger than yours…

Canada's Debt Profile

Canada’s debt is nothing to write home about.

Its net debt to GDP ratio is around 30-32%, depending on the year you pick.

This can be seen as a good, conservative number, since the government isn’t up to its eyeballs in debt.

But on the other hand, it could be seen as too conservative.

After all, it has a lot of space to indebt itself. And such debt could lead to faster economic growth.

But that’s just speculation on my (and other’s) part.

Besides, that’s public debt.

When it comes to the private sector, Canadians are swinging at the fences to borrow money.

A balance where one sector is more indebted.

Apparently, as of 2017, Canada has the fastest-growing Private debt (Huffington Post).

Thus, it seems as though the private sector took the lead in terms of borrowing in order to expand.

Such a strategy looked great, but the BoC is currently considering another rate hike (making debts more expensive to repay) and some are worried about this.

We will see how things play out.

Hope you enjoyed this tour of the Canadian economy.

See you soon,

Emil Christopher,

The Forex Economist

  1. Home
  2. >
  3. Forex Economics
  4. >
  5. Canadian Economy

Fill out my online form.
Online contact and registration forms from Wufoo.

Recent Articles

  1. Forex Audio Squawk

    Sep 12, 17 09:09 AM

    Learn what you need to know about Forex audio squawk here.

    Read More

  2. GBP and Bank of England, September 2017

    Sep 11, 17 09:48 AM

    GBP (pound) traders what can you expect from the Bank of England's MPC vote this Thursday, Sep 2017? Click to find out.

    Read More

  3. Commodity Currency

    Aug 21, 17 04:41 PM

    Three of the eight major currencies are commodity currency. But what is that? Which are those currencies, and how can we trade them? Click to find out.

    Read More