Canada’s Economy and GDP

Statistics Canada switched to Gross Domestic Product in 1986 to compute their national productions to encourage comparison with other countries as most different nations utilized Gross domestic product. According to Statistics Canada reports, there was a growth of three percent in GDP for 2017, the highest increase since 2011. As indicated in the Scotia Bank reports, the Canadian economy remains excessively reliant on domestic households, Real-estate investments, and customer purchases contribute a share of 66 percent to Canada’s GDP (Yoon, 2017).

According to the Canadian Encyclopedia reports on GDP, Canada’s economy had turned out to be considerably more broadened, with servicing in accounting and finance, social needs and health care, education, cultural recreation, arts, management and investments in real estate, technology, public organizations, wholesale and retail market trade representing nearly 65 percent of Gross domestic product. Farming, Manufacturing, and agriculture represent a little more than 10 percent of yield in GDP (Matteo, 2018).

International trade policies and agreements have been a vital tool of Canada’s financial growth all through the nation’s history.  Imports and exports are valuable to economic development, to a great extent by boosting efficiency. Canadian firms that are involved in exporting exhibit higher efficiency than firms that try not to export. Imports of moderate inputs contributed up to half portion of Canada’s ongoing productivity advancement.

Canada’s lack of trade with Asia has improved with an increase in exports related to natural resources. External trade with foreign nations, the Free Trade Agreement has boosted the Canadian economy. According to Fraser Institute’s report on international trade and the Canadian economy, “Canadian exports related to agriculture, oil and natural gas, manufacturing contributed to 74.1 percent of exports in 2015, which share a significant income to the country’s economy” (Cross, 2016). Consumer goods, machinery, services account for major import shares in Canada.

The Conference Board of Canada reports that there would be half percentage of the downfall of the economic growth, and employment in Canada will lose about 85000 jobs for the first year and 91000 jobs in the second year if NAFTA is terminated. Going forward, it also impacts on attracting new investors in terms of securing access to the U.S market.

According to the given report, Ontario and New Brunswick will have a high impact on termination of NAFTA. As Ontario is the 2nd largest exporter and trade flow to the U.S among all provinces in Canada, here the province is occupied with many manufacturing industries especially in the automobile industry where it has a 26% of GDP share in the total economy. New Brunswick is the leading largest exporter to the U.S which accounts for 28.5% in its total GDP; here the major exports such as food products from the agricultural sector and forestry products will get affected with high tariffs and the province will lose the business from U.S market.

When considering legalizing marijuana, there are numerous health, monetary, and social issues to study, but a study shows that there are financial advantages to the legalization of cannabis weed. According to Toronto-Dominion Bank, “the proportion of GDP generated by Canada will get an escalation following the legalization of marijuana weed on October 17, 2018, and it can contribute up to 8 billion dollars to the Canadian economy”. Cannabis and its associated trade exchange will give a single time boost to the about 2 trillion-dollar local economies, provoking the bank to increase its development estimate for the years 2018 and 2019 up to 2.2 percent (Fournier, 2018).

According to Statistics Canada, both unauthorized and authorized cannabis movement will be included in their official economic statistical reports. The organization is expecting a knock in GDP after the legalization but has not released any authorized information about the estimation of the cannabis trade effect for the years to come.

References

1. Cross, P. (2016, October). The Importance of International Trade to the Canadian Economy: An Overview (Publication). Retrieved June 12, 2019, from Fraser Institute website: https://www.fraserinstitute.org/sites/default/files/the-importance-of-international-trade-to-the-canadan-economy-an-overview-post.pdf

2. Fournier, C. (2018, September 19). GDP to get lift from cannabis, says TD. Retrieved June 13, 2019, from https://www.thestar.com/news/cannabis/2018/09/19/marijuana-to-boost-canadas-2019-gdp-at-least-on-paper-td-says.html

3. Matteo, L, D., “Gross Domestic Product (GDP)”.  The Canadian Encyclopedia, 25 April 2018, Historical Canada. https://www.thecanadianencyclopedia.ca/en/article/gross-domestic-product. Accessed 15 June 2019.

4. Mehltretter, S., Mukherjee, R., & Gott, J. (2017). Https://www.retailcouncil.org/wp-content/uploads/2018/08/The_End_of_NAFTA_Research_Report.pdf(Rep.). Retrieved June 12, 2019, from A.T. Kearney website: https://www.retailcouncil.org/wp-content/uploads/2018/08/The_End_of_NAFTA_Research_Report.pdf

5. Yoon, S. (2017, July 7). Canada’s projected GDP growth for 2017 is highest since 2011: Scotiabank. Retrieved June 12, 2019, from https://biv.com/article/2017/07/canadas-projected-gdp-growth-2017-highest-2011-sco