When looking for ways to explain how Canada has become such a solid economy and how it has maintained a strong place among the world’s economic leaders, one needs to look no further than their ability to export more goods than they import. While many other economies are primarily consuming goods and only exporting services, the Canadian system is still set up so that they benefit from a favorable balance of trade. In 2009, for the first time in a long time, the Canadian economy saw a bit of a deficit, with people importing a bit more than the country was able to produce.
Looking to 2010
Still, it appears that the prospectus is strong for Canada to get back to exporting in 2010. The reason why the country is able to do this has everything to do with the products that it is exporting. It is a primary producer of energy, exporting lots of different oil products and other forms of energy to neighbors and around the world. The nice thing for Canada is that they sit so close to the United States and they enjoy a nice working relationship with the United States, whose inhabitants do not need visas for Canada. Since the US consumes so much energy – example for standby equipment, old refrigerators, electric heaters or other equipment -, it allows Canada to really handle their exports well, since they have a captive buying market right below.
The long term prospectus
The Canadian dollar is very powerful right now and the lack of growth in the United State is something that figures to hurt exports in the foreseeable future. Still, Canada places a high priority on production of goods and that seems to be valued over simply consuming goods. Nonetheless the Canadian economy is dominated by the service industry like any other developed nation as well. The service sector employs three quarters of Canadians and account for 78% of Canadas Gross Domestic Product. 12% of Canadian employees work in the retail sector such as shopping malls, WalMart or Target for example. In the remaining 88% of the population there can also be found a lot more specialised companies and services such as Ottawa Carpet Cleaning.
If the focus stays on energy and the Canadian companies remain as efficient as they are right now, there is no reason why Canada should not become a country with a positive balance of trade in 2010 and in the years that follow. America is not a country that looks like it is going to slow down its consumption of energy products anytime soon, so that provides a nice security blanket for the relatively strong Canadian economy to work with.