Gross National Product (GNP): US$682bn

Exchange rates against the US$ over the last year: 1.359 Canadian dollars (1.521)

SCORE CARD

World GNP ranking: 8th GNP per capita: US$21,930 Balance of payments: US$14.9bn Inflation: 2.2% Unemployment: 7%

Strengths

A broad and rich resource base. Provides exports, raw materials for manufacturing sector, and massive cheap energy, notably HEP; also large oil and gas reserves. Agriculture and forestry contribute 2% of GDP, mining 4%. Successful manufacturing sector, contributes 16% of GDP, especially forestry products, transportation equipment, and chemicals. Record budget surplus since 1997. Access to huge US and Mexican markets through NAFTA. Low inflation.

Weaknesses

Problems of competitiveness: higher taxes, more regulations, low productivity relative to NAFTA; other threats from globalization. Vulnerable to price fluctuations for raw material exports. Brain drain of professionals heading south.

Profile

Canada has an enormous resource base, and it has one of the highest standards of living in the world. Since the mid-1980s, however, manufactured exports have faced increasing competition, while prices for its primary exports fluctuate. Real growth averaged 3.5% a year for most of the 1980s, but then stagnated for five years, while budget deficits rose, forcing restructuring at both federal and provincial levels. Many welfare programs were cut back; the defense budget was sharply reduced. Growth resumed after 1993 and an unwieldy budget deficit was turned into a record surplus by 1997. Within NAFTA, Canadian firms have had to become more competitive to maintain exports. Most have been successful, with better productivity and a high-tech shift. Unemployment, at almost 10% in the mid-1990s, was reduced to just under 7% by 2001. Canada's close ties to the US left it hard hit by the 2001 slowdown.

EXPORTS

IMPORTS

ECONOMIC PERFORMANCE INDICATOR

From "The Financial Times World Desk Reference" © Dorling Kindersley 2004