Canada’s Economic Development is Growing up

The Economy growing in Canada has followed a steady trajectory. Beginning in 2009 and continuing in the past five years, key economic indicators have begun to point upward. New construction and housing starts, manufacture, and infrastructure investment are on the rise throughout Canada, providing increased projections in employment and overall GNP.

Private-public sector initiatives have spurred economic growth in smaller communities. The Building Canada Plan, for example, targets monies to municipalities of fewer than 100,000 people. These funds can be used for infrastructure development including roads, sewers and waste management facilities, and are also available for capital construction projects. The idea is to stimulate the economy to provide more jobs and resources for residents of these smaller communities.

Because trade with Canada is intrinsically linked to global markets outside of Canada, economic development in Canada has endured hits and stalls similar to economies throughout the world. While free trade agreements with the US and Mexico have been implemented, those economies have suffered their own setbacks. In the US, the economic downturn was blamed initially on a crippled housing market. Housing prices peaked in 2005 then took a precipitous spiral downward. With declining housing values, homeowners lost equity and stopped purchasing big-ticket items. A decline in purchasing power in the U.S. hurt economies that export to the U.S., including Canada, Mexico and parts of Asia.

Canadian oil development has also suffered from recent declines. This is attributed in large part to the relatively lower cost of natural gas and a plentiful supplier market. However, as the oil and gas industry in Canada has experienced a temporary stall, investment in wind, solar and alternative energy sources has increased throughout the country.

Currency problems in Asian markets have also affected economic development in Canada. The declining value of the Chinese Yuan has resulted in lowered buying power for the Chinese consumer, effectively dampening Canadian exports to the region.
Canadian exports to the U.S. remain relatively strong. Intra-national investments are on the rise. Given uncertainties in the U.S. dollar, many Canadian companies have begun to negotiate for payment in Canadian dollars, which will also have a strengthening effect on the Canadian currency.

Article written by Natalie

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