Practise this chapter
Canada has always been a trading nation: buying from and selling to other countries is a major engine of its growth. This chapter is short and focused. Expect questions on the three types of industry, Canada’s trade with the United States and Canada’s place among the world’s leading economies. The most common way to lose marks is putting an industry in the wrong group.
Three types of industry
| Type | Examples | Why it matters |
|---|---|---|
| Service industries | Transportation, education, health care, construction, banking, communications, retail, tourism, government | Employ more than three-quarters of working Canadians |
| Manufacturing industries | Paper, high-technology equipment, aerospace, automobiles, machinery, food, clothing | Factories turn materials into goods sold in Canada and abroad |
| Natural resource industries | Forestry, fishing, agriculture, mining, energy | Shaped Canada’s history, still support many regions and make up a large share of exports |
A quick test for any job: does it provide a service, make a product, or take something directly from nature? Growing wheat, catching lobster or drilling for oil is natural resources. Turning crops into packaged food or trees into paper is manufacturing. Moving those goods by truck, train or ship is a service.
Resources and history
Natural resources are woven into Canada’s story. The fur trade drew Europeans deep into the continent, and fishing, forestry and mining built many communities. Many regions still depend on these industries today, which is why resources loom so large in Canada’s exports even though far more people work in offices, shops, schools and hospitals.
Trade with the United States
- The United States is Canada’s largest trading partner by far, and most Canadian exports go there.
- Canada and the United States began free trade in 1988. In 1994 Mexico joined, creating a wider North American free trade area.
- Natural resource commodities — energy, forest products, minerals and farm goods — are a major part of what Canada sells abroad, even though most Canadians work in services.
- The Canada–U.S. border is often called the world’s longest undefended border. The Peace Arch, at Blaine, Washington, on the British Columbia border near the Pacific, celebrates the friendship between the two neighbours.
Canada in the world economy
Canada is one of the world’s leading industrialized countries and a member of the G7: Canada, the United States, the United Kingdom, France, Germany, Italy and Japan. Older editions of Discover Canada say G8, because Russia once took part; Russia was suspended in 2014. Large economies such as China, India and Brazil are not G7 members.
Common mix-ups
- Construction is a service industry, although many people guess manufacturing. Tourism, transportation, banking and government are services too.
- Energy is a natural resource industry, not manufacturing.
- Raw vs processed. Farming and fishing are natural resources; turning the harvest into packaged food or canned fish is manufacturing.
- Jobs vs exports. Services employ the most people; natural resources are a big share of exports.
- 1988 vs 1994. 1988 is Canada–U.S. free trade; 1994 is when Mexico joined.
- G7 vs G8. Today it is the G7; the G8 of older textbooks included Russia.
- Largest trading partner is the United States — not the United Kingdom, China or Mexico.