29/11/2022
*Case Study*
Welcome to Canada!
The land of ice hockey, politeness, and the 9th largest economy in the world.
The Canadian economy has got strategic pros and cons. Firstly it is direct neighbours to and the largest trading partner of the United States of America (more to come on them soon) so naturally has more opportunities than say Egypt all the way over in Africa. Secondly it is a commonwealth country so takes a lot of its governance from it's parent country the United Kingdom across the Atlantic. On the flip side the geography of Canada can be described as questionable… with a majority of its land mass being cold, desolate and underdeveloped. The majority of it's densely populated cities are based on the U.S border and spread horizontally from the Atlantic coast to the Pacific. To make up for its disproportionate population Canada has become one of the best places for migrants and students to come and learn new skills or get experience in their field that they may not have the chance to in their home country.
Immigration and Skilled Migration:
No country is immune from immigration and i will be discussing the economic impacts -only- of migration for Canada (so calm down keyboard warriors) with that in mind lets jump in. Canada has one of the highest percentages of foreign born residents at 21.9%, the Canadian government offers a diverse range of visas for internationals, from student visas to migrant visas, this is very prosperous for an economy as it almost guarantees growth as no student is going to turn up in a country with no money or a place to live. They're going to have money to rent a home, a food budget, and funds to make a social life after work hours (maybe except grad students! ;) ). The majority of wealth from international stuents comes from wealthy parents or a well off family meaning Canada is getting a direct line of cash from another country free of charge in the form of a student or migrant. It can't help as well if the country to emigrate to has one of the most relaxed attitudes towards migrants, a very enticing student visa programme, outstanding natural beauty, established industries, and world class education systems. In the same way as tourists, students are a valuable export using it's built up industries and education centres Canada gets direct investment to the local economy from the funds that didn't originate there and the home nation the migrant/student is from (lets say Egypt for this example) gets a better educated or skilled citizen in return for the rest of their career upon completing their time in Canada, it's a win win and Canada has become the hot spot for work experience and education. In a nutshell what I have just described is skilled migration played out on a very successful scale. Skilled migration however does have some drawbacks, specifically the cost of living increase in the nation all students flock to. Supply and Demand will tell you that when demand outpaces supply the cost of goods and services will go up now apply that to students and you'll see one of Canada's main probelms. With the amount of tourists, students and migrants coming to Canada, the nation's real estate market has seen huge appreciation making it very difficult for a Canadian citizen to own a home as the renting market is so big in Canada. Vancover is a major Canadian city, with its location to the west coast, proximity to the U.S. and reputation of safety and prosperity Vancover is one of the most expensive cities to live in one the planet... similar to London owning a property here can be very profitable to landlords and international students from Japan, South Korea, Vietnam and others in the Pacific see Vancover as an enticing destination to explore opportunties and get a taste of 'western life' (for lack of a better phrase). This is where it turns into a social argument as many Canadian born citizens are being locked out of their own cities with the property prices increasing by 10x the average so I will leave it up to you dear reader to decide on whether or not this is a good thing.
Mining and Oil:
Out in the wilderness of the Canadian forests hold an abudance of mining and oil deposits which have been an integral factor to Canada's success. The government has introduced taxes on the mining facitities to ensure some of that resource wealth can be seen by the average Canadian which is very responsible as with every resource that can be mined that deposit is non renewable once extracted and therefore becomes worthless once used. These taxes are placed into a pot that Canada can use to better itself when the oil and mining season eventually dries up. Like with most resource rich nations, the good times only last so as long as there is the resource available in this case oil, the Canadian government is all too aware of this and are currently investing into new greener methods to use their equipment in order to save money in the long run which links back to why they're turing to inrernational students to help them achieve that cause you know, strength in numbers and all that. Canada is also very chummy with a very influential trading partner to the south which is a great segway to Canada's geography and its significance.
Georgraphy and Positioning:
Canada has in many ways got the best body guard to ever exst in the form of the United States. The pair have a very strong trading relationship and are each other's most popular trading partner. The economic, industrial and military power of the U.S. means Canada is always going be safe when sh*t hits the fan, the two economies have developed in synonomous ways and what happens in the U.S. can usually bee seen in Canada all be it on a much smaller scale. What's more is that the U.S. the most consumer driven market in the world shares a land border with Canada making access to foreign trade very easy for the Canadian economy. Americans often associate Canada as their little brother due how similar the two nations are. Being a member of NATO means that Canada does not need to focus its economy on defense spending as the U.S. will beat up any bully that tries to invade, real high school level stuff i'm sure. However as with the American association, international players have come to see Canada as solely reliant on the U.S. to exist which isn't neccessarily true, as previously mentioned, the friendly Canadians have access to the Pacific and Atlantic giving it expanded trading networks with other foreign nations, it is the second largest nation in terms of land mass so plenty of space to work with and a reputation of being welcoming thus encouraging development through foreigners whats not to love?
Well as it happens a couple of things, geographically it can be argued that the economy has been hindered by its location. Although I mentioned earlier that with resources being away from tourists hot spots allows for the cities to thrive without the knowing the impact the mining industry is having on the environment will by contrast being away from major cities means that mining and oil extraction is more expensive. To get extracted oil to the consumers involves a lot of legwork over treacherous conditions of ice, snow, wolves, bears and other conditions that just want to make life difficult for you, (aint mother nature lovely eh.). The geographical differences don't stop there however, with its shared culture and open borders the seperation in salaries between the U.S. and Canada is growing, now arguably this is down to Americans working harder (according to each nation's department for labor i might add) with U.S. workers clocking in 1,791 hours annually compared to the Canada's 1,685 hours. The gap in output has been argued by the difference in the quaility of its sectors Canada doesn't have a version of silicon valley for example but the main reason is that the U.S. just has more money to play with and invest into sectors than Canada so therefore can more easiy see the return on investment than Canada. It is incredibly difficult to talk about the Canadian economy without talking about the U.S. as the similarities are so big but Canada has got some clear USP's that make it stand out on the world stage even if it is sometimes overshadowed by its neighbour to the south.
Ranking:
Okay we now go onto the ranking, the most savvy aamongst you will be seeing that I'm covering the G7 economies first and that the economy of the U.S. is all thats left for that catergory well due to sheer size and uniqueness of the U.S. economy I feel in order to do it justice I will have to include the case study in two parts. I will eventually come round to this but with my special relationship series just started I hope that will scratch your American economical itch for now.
Talking about Canada however the country has a GDP of $1.9 Trillion dollars making it the 9th largest economy and getting a 7/10
GDP per capita is actually quite high it's the second highest in G7 and comes in at $52,000 for its 38 million population, with a little bit of work it could rub shoulders with true per capita elites, like Norway, Switzerland and Singapore but for now gets a 8/10.
As with most advanced economies over the past 10 years growth hasn't been too great, its still growing and is doing better than most of Europe at 1.71% annually and gets a 4/10.
Stability and Confidence is great, Canada is one of the safest and secure nations on the planet has a strong currency, stable democracy and is arguably better at diplomacy than the U.S. this means it gets a 9/10.
Industry is more mixed, with a booming real estate market, manufacturing industry and wholesale trade market The Canadian economy does a lot and what it does, it does extremely well but there just aren't a lot of internationally recognisable industries outside mining, agriculture, student exports and visa allocation. The country is building up a strong service industry but that is still on the rise as of this post so can only get 7/10.
All in all this gives the Canadian Economy a 7/10. Not bad Canada, keep up the great work!
Let me know any countries you would like me to analyse in the comments below!
C.
