A wildlife sanctuary, Canada is home to a variety of species, including the stately Canada Goose, originally described in the 18^th century.

Mispronouncing "kanata", the native Huron-Iroquois word for village, French navigator Jacques Cartier christened Canada with its name in 1535. Initially, this huge parcel of land became a treasure trove due to the abundance of fur, a commodity valuable to European traders in the 15th and the 16th centuries. In the early days of the nineteenth-century, regional economies based on fishing, farming, lumbering, mining, and manufacturing were Canada’s mainstay. Increasingly, the country has moved into national and international markets through the force of technological change and commercial policies. Canada, from the days of fur trade to the current day, has witnessed a profound transformation.

“A Mari usque ad Mare” (From sea to sea):

Canada’s motto aptly describes the country. It possesses distinctive geographical features ranging from old rocks, mountains, seas, lakes, rivers and heaps of natural resources. The second largest country in the world by area, Canada’s huge land mass equals ten million square kilometers, and could hold 58 million countries the size of the Vatican City. Canada contains a submerged part called the continental shelf, extending out to the sea forming a low platform. According to experts, this platform is said to hold vast amounts of reserves of crude petroleum and natural gas. Adding to this, Canada also holds huge resources of iron ore, nickel, zinc, copper, gold, lead, molybdenum, potash, diamonds, silver, fish, timber, wildlife and coal.

History

The true north strong and free

Canada was originally inhabited by its indigenous people and some Asian immigrants moved in later. But the advent of European traders changed the structure of the society. France sent in a large group of settlers to colonize the land due to an abundance of natural resources, but the British later prevailed, dominating the French and establishing their rule.

Canada became an independent nation in 1867 when the three provinces of British North America united to form the new nation. The country is both a constitutional monarchy and an independent democratic system led by Elizabeth II, Queen of Canada, as head of state. The Prime Minister is the head of the government and is appointed by the Governor General. Canada enjoys a stable political environment. With this, and sound policymaking, the economic development of the country is poised to advance on track.

A colorful reminder of Canada´s indigenous past, some totem poles date back to the 13^th century. Created out of wood, their carvings represent familiar legends, clan lineages, cultural beliefs or notable events.

The U.S. and Canada cooperate on various military exercises and campaigns, but Canada maintains an independent foreign policy. It continues to have normal relations with Cuba and has kept away from the Iraq war. Due to enormous stretches of inhospitable wilderness towards the north, 90% of Canadians live within 200kms of the U.S. border. In fact, the U.S. and Canada share the longest undefended border in the world, running up to 5,525 miles.

Culture

Drooping fertility rates

The country has a population of 31.2 million with a population density of three inhabitants per square kilometer, one of the lowest in the world. Posing a great challenge to the future development of the country, Canada is besieged with a problem of declining birth rate, with only one-fifth of the population under the age of 15. Fertility rates have now dropped down to 1.54 children per woman. The official replacement fertility rate (fertility rate required to keep up the current level of population) stands at 2.1. Encouragingly, the life expectancy of a Canadian citizen is high at 80.22 due to the nation’s pristine environment and universal health care provided by the government. Canada has a literacy rate of 99%, and its people are more environmentally conscious. On the human development front, Canada is ranked 4th among 177 countries.

Home to immigrants

A symbol of Canada’s immigrant roots, the “Jeanie Johnston” is a remarkable replica of the original ship built in Quebec in 1847, which carried Irish emigrants to the U.S. and Canada during the years of the Irish potato famine.

Canada’s population is a multi-ethnic one, with Canada holding the highest per capita immigration rate due to liberal immigration policies. With high rates of immigration, Canada is a vibrant mixture of the cultures of its immigrants as well as the aboriginals of the country. According to the recently concluded census on immigration and citizenship, spanning the period from 2001 to 2006, Canada had 6.18 million foreign-born people, which is 19.8% of the total population. In this timeframe, the number of people of Canadian origin grew by 3.3%, whereas the foreign-born population swelled by 13.6%. The census also enumerated that 1.1 million immigrants moved into Canada in this five-year period.

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Economy

A strong resource rich country

An abundance of natural resources gives Canada a unique advantage. Mining, forestry and oil have formed the bastion of Canadian exports and trade for quite some time. In 2006, energy resources accounted for 57% of Canada’s total resource wealth, followed by timber (24%) and mineral resources (19%).

Canada’s vast forestland not only supports its burgeoning lumber trade, but also the pulp and paper business, one of the country’s largest manufacturing sectors.

The country produces more than 60 minerals and metals, which account for 15.2 % of the total domestic exports. In 2007, Canadian mineral production reached $40.4 billion, a 19.0% increase from 2006. This jump was due to significant growth in the value of both metallic and nonmetallic mineral production. Production of metallic minerals, such as gold, nickel, uranium, bismuth, zinc, cobalt and cadmiuim, reached $26.3 billion in 2007, an increase of 25.1%. Nonmetallic mineral production of potash, diamonds and cement rose by 13.0% to $11.3 billion.

Equally important to Canada’s economy is forestry, which provides 1 out of every 44 jobs. Canada possesses 10% of the world’s forests measuring 402.1 million hectares (ha). It is one of the largest forest product exporters, contributing a significant amount to its surplus balance of trade. Huge expanses of forests give Canada a natural edge in the production of forest-based products like wood pulp, paper, sawn wood and wood based panels, and contributes 14.6% of total exports from the country.

Energy exports form a major chunk of Canadian trade, with the United States accounting for 99% of all Canadian energy exports. Furthermore, the presence of huge amounts of both conventional oil and non-conventional oil sands puts Canada in the second position after Saudi Arabia, as a holder of oil reserves.

Indeed, Canada today possesses proven oil reserves of 177.9 billion barrels, with 173.7 billion barrels in the non-conventional form of oil sands. These reserves are mainly found in the areas of Athabasca, Peace River and Cold Lake in Alberta. However, the total recoverable oil reserves (non-conventional) are estimated at over 334 billion barrels. According to the U.S. Energy Information Administration, Canada produced 3,014.31 thousand barrels of crude oil per day in the year 2005, enough reserves to last about 150 years at the current rate of production. This treasure trove catapults Canada into an important position on the global energy stage. Notably, Canada has always considered the Arctic region as a part of its sovereign territory, an area rich in oil and minerals. However, in August 2007, Russia challenged Canada’s authority over this polar region when it dropped a titanium capsule with a Russian flag on the North Pole’s ocean floor. Although the UN rejected Russia’s claim, a fight for this oil cache continues.

Canada’s oil sand reserves are primarily located in three major deposits in northern Alberta. With skyrocketing oil prices, oil sand production is currently profitable, and interest has increased in harvesting this resource.

As the majority of Canada’s oil exports find their way into the United States, a slowdown in the U.S. economy may have a bearing on the nation’s energy exports. Due to its geographical positioning and inhospitable terrain in the northern parts of the country, Canada may find itself in a difficult position to export its oil production anywhere else, as this will require extensive sub-sea pipelines to be laid to transport oil to any other part of the world.

Production of oil from the non-conventional reserves of oil sands is much more expensive than the production of conventional oil. Production of oil from conventional sources costs less than a $1 per single barrel in Iraq and Saudi Arabia, whereas the production cost per barrel of non-conventional oil amounts anywhere from $9 -$14 for an existing oil operation and $18 and above for a new operation. If the oil prices were to fall significantly from the current day levels, the operations of these oil sands may prove unprofitable.

The U.S. and Canada share one of the friendliest bi-lateral relationships. Each day, not only do 300,000 people cross the border between the countries, but trade volume amounts to a staggering $1.5 billion.

On a growth trajectory

With a real GDP growth rate averaging nearly 3%, Canada’s economy has been leading the G7 industrialized countries in GDP growth. With a low unemployment rate of 5.9% and an inflation rate of 2.4%, the country remains on a steady growth path. Growth projections by the Bank of Canada for the year 2008 are at 1.8% and 2.8% for 2009. Inflation is also forecasted to come down from the current levels to below 1.5% by mid 2008 and return to 2% by end of 2009. There have been rate cuts recently to stoke up trade.

Canada’s powerful southern neighbor remains its largest trading partner, followed by Japan and the European Union. As such, a slowdown in the U.S. could impact Canada’s economy. With around 80% of the trade being carried out with the U.S., prospects for Canadian exporters and businesses have been undermined. Though Canada faces a risk in terms of a downturn in its foreign trade and its GDP growth due to a decline in economic activity of its trading partners, the country also has some offsets. The domestic fundamentals remain strong. The housing sector in the country is better placed than its counterpart in the U.S. There has been a slight decrease in the number of building permits, but the figure for total value of building permits from Jan-Nov 2007 exceeded the previous year’s totals. Non-residential construction and infrastructure spending is also expected to be buoyant.

With its bounty of resources, Canada holds an important position on the global economic stage. Leveraging these assets, the country should be able to decouple its prosperity from its powerful southern neighbor.

Canada enjoyed a CAD$30 billion budget surplus in the year 2006. The Canadian government is indulging in education, infrastructure, transportation and health care, which is resulting in increased employment rates. In fact, Canada has been exhibiting a better rate of job creation than the United States.

The country also has a very strong services sector contributing 66% of its GDP, with tourism, financial services, internet, telecommunications and aeronautics topping the list. Financial and insurance services garnered a majority (21.4%) of the Foreign Direct Investment coming into Canada in 2005. For ease of starting a business, Canada has been ranked first by the World Bank. It has also been featured among the top five countries in UNCTAD’s Inward FDI Potential Index since 1990. The manufacturing sector contributes 31% to the GDP and continues to be dominated by automobile production and other large equipment and farm equipment.

Another important issue is the rising Canadian dollar, which has strengthened from 20-year average levels of 0.75CAD/USD to parity and is projected to get stronger in the days to come. A rising Canadian dollar has not only hit the exports from the automobile and forest sector, but also has affected hospitality and the tourism. Citizens from the U.S. formed the bulk of tourists traveling to Canada. The strengthening of the CAD has tapered the flow of tourists from the south, but is attracting some amount of tourist flow from thriving developing nations like Russia, India and China.

The maple leaf forever

A country with varied geographical and demographic features holds much promise for the future. Canada possesses the ingredients needed for all around development of the country: political stability, amicable relations with its neighbors, an educated population, a strong economy, and a pristine environment. But on the other hand, Canada faces challenges in the form of declining levels of population, and a threat to its sovereignty in the Arctic region. Closely tethered to its neighbor, a prolonged downturn in the U.S. economy could significantly affect the economic health of Canada.

Despite the challenges faced by the country, positives do stack up for its development. Being a resource rich country, Canada holds a clear advantage. Asian and emerging markets growth powerhouses like China and India will continue to fuel demand for resources like metals and oil, which Canada is well equipped to supply. Furthermore, the country’s producers of various grains like wheat, corn, barley and other oilseeds stand to benefit from the global grain shortages. Canada, with a basket of natural wealth, is poised to benefit from it all.

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