The+Economy+of+Canada

__Urbanization:__
 * The Changing Economy**
 * Cities became very attractive for people towards the end of the twentieth century
 * Better chances for employment
 * Better business prospects
 * Access to recreational, educational, entertainment, cultural, and healthcare facilities
 * As cities became more popular, services were cut in rural areas, encouraging people to leave them
 * Urban sprawl occurred as people moved to the cities, where they grew uncontrollably, and small towns were absorbed into larger ones to create metropolitan areas such as Vancouver and Toronto

__Technological Innovation:__
 * In the late 1900's, Canada's economy began to change from one that relied more heavily on processing materials and manufacturing goods to a more diversified economy
 * Technology decreased the need for human labour, which resulted in higher unemployment rates
 * Companies began to change, finding ways to reduce overhead costs and increase income by hiring people who didn't require benefits or job security, and firing managers to redistribute their workload among cheaper employees
 * Competition between companies rose, which resulted in smaller companies becoming absorbed into larger ones, or going bankrupt
 * In the 1990's, consumption and production of goods rose, which caused Canada's economy to grow

__The New Face of Employment:__
 * Technology caused people to need more skills to get good jobs, which employed the younger generation, but many older people had to go back to school or take jobs that require less skills


 * Economics Essentials**

Economics concerns money, but also having to make decisions around it, such as where and how much to spend on different goods and services

__The Laws of Supply and Demand:__ Demand:
 * Applies to the consumer side of the market
 * When price goes up, demand goes down, and vise versa
 * This happens because not everyone can afford a product or service
 * On the other hand, demand affects price, changing with it
 * When demand is low, the price drops so that the product or service can still be sold, and vise versa

Supply:
 * Applies to the producer side of the market
 * When prices are high, production increases, as well as the opposite
 * Controlling supply controls prices
 * Ex. - When prices are low, producers cut back on production. This means that although the supply has decreased, demand may have stayed the same. Therefore, prices go up because the demand vs. supply ratio is not in balance

__Defining Resources:__
 * Land Resources - natural resources, for example: land, air, water, fish, forest, and minerals
 * Human Resources - labour provided by the people, for example: factory workers, store owners, educators
 * Capital Resources - money and human made goods

__Economic Sectors:__
 * Economic activities are classified according to sector
 * Primary activities - involving natural resources
 * Secondary activities - processing or manufacturing of goods
 * Tertiary activities - services
 * Quaternary activities - creation and transfer of ideas and information

__Using Statistics:__
 * Macroeconomics - the study of economic activity on a national or global scale
 * Look at unemployment rates, consumer price indexes, and productivity measurements
 * GDP - Gross Domestic Product, value of all goods and services produced in a country in a set amount of time, even by foreign-owned companies
 * GNP - Gross National Product, value of all goods and services produced by a country's companies, even those located in other countries
 * Trends can show how the economy can be expected to change in the future, and to indicate and inform of how the economy is doing at a particular period


 * Canada's Economic Regions**

__Five regions:__ Location: New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland, Gaspe region of Quebec. Industries: Fishing, forestry, agriculture, mining, oil and natural gas extraction. Location: Southern strip of Quebec along the St. Lawrence river, southern tip of Ontario (surrounded by Lake Erie, Lake Ontario, Lake Huron). Industries: Fishing, forestry, agriculture, hydroelectricity maniuplation, manufacturing. Canada's "Industrial Heartland" and financial centre. Location: Greater portion of Canadian Shield. From Great Bear Lake (NWT), through prairie provinces, Ontario, Quebec, Labrador, and eastern tips of Baffin Island (Nunavut). Industries: Fishing, forestry, mining, hydroelectricity manipulation. Location: Through northern corner of Yukon, Northwest Territories, Nunavat, northern areas of Manitoba + Ontario along Hudson Bay, northwestern tip of Quebec. Industries: Fishing, mining, oil and natural gas extraction Location: Northern portion of Interior Plains, from Western Mountains to edge of Canadian Shield, southern portions of Manitoba + Saskatchewan, Alberta, southern portion of Northwest Territories, eastern corner of Yukon Industries: Agriculture, oil and natural gas extraction, financial and corporate management.
 * Atlantic
 * Great Lakes - St. Lawrence
 * Shield
 * North
 * Prairie


 * Canada and the US: an Overview**

US influences Canada greatly.

__History and Politics:__
 * Before Confederation, US was always a potential military threat, which raised questions of loyalty in Upper and Lower Canada, provoking Rebellions of 1837 and Confederation.
 * After Confederation, US was seen as a territorial threat and competed with Canada for Western territory.
 * After Confederation, US was seen as an economic threat, so MacDonald created an east-west trade infrastructure by erecting tariffs and trade barriers that would defy the north-south pull of trading with the US

__Linked Economics:__ America had replaced Britain as Canada's leading trade partner by 1920s.
 * American investment gave Canada the capital it needed, through equity investment.
 * equity investment: bought out Canadian businesses by setting up branch plants in Canada (branch-plant economy).
 * Benefits of equity investment from America for Canada:
 * needed capital once Britain started diminishing their involvement in Canada
 * access to US market for exports
 * Canada's economy rose due to American investment
 * Benefits of equity investment in Canada for America:
 * human capital (large pool of well-educated laborers)
 * evasion of tariffs placed on US products.
 * However there were concerns:
 * Often US multinationals sent American employees to run their branch plants as opposed to hiring Canadians
 * Little money went toward quarternary projects in Canada
 * Profits tended to flow back to US headquarters
 * Many bright young Canadians migrated south to the head offices of the companies in order to further their careers and chances of advancement.

__Identity Anxiety:__ American culture started to take over that of Canada's, which caused the federal government to take action to preserve and promote Canadian culture. For example:
 * Canadian Radio Broadcasting Commission (replaced by Canadian Broadcasting Company in 1936)
 * National Film Board in 1939
 * National Library of Canada in 1953
 * Canada Council in 1957 (to promote Canadian culture through grants to cultural groups)

Freer Trade and Protectionism: In the 1970s, Liberal government of Prime Minister Pierre Elliot Trudeau (nationalist economic agenda) developed programs to control the growth of foreign investment to protect the Canadian economy from becoming entirely dominated by it. Threats to Canadian economy: By 1983, Trudeau resigned due to becoming increasingly unpopular. New prime minister, Conservative leader Brian Mulroney (continentalist economic agenda), favored less government interference in the economy and free markets. Still, Canadian access to the US was threatened, prompting the negotiation of the Canada-US Free Trade Agreement (1988). New Liberal government, under PM Jean Chretien, ratified the North American Free Trade Agreement (NAFTA) in 1994.
 * These were controversial due to the diminished international trade, and therefore decreased market, that resulted.
 * Especially the US government was also displeased, threatening to retaliate against Canadian firms operating in the US.
 * International trade blocs were forming in the 1980s
 * exported products + services might be shut out of foreign markets.
 * World prices for commodities started to tumble because of increased supply
 * US Congress became very protectionist, straining the trade relationship between Canada and US.
 * Countervails
 * Anti-dumping duties
 * dismantled/replaced several of Trudeau's programs
 * North America -> becoming a trading bloc


 * Freer Trade in North America**

Managed trade = restriction of goods across borders (tariffs and non-tariff borders) to protect the country's home industries. Free trade = complete removal of such restrictions Freer trade = compromise between managed trade and free trade.

__The 1989 Canada-US Free Trade Agreement:__ In 1985, PM Brian Mulroney and President Ronald Reagan started to plan a comprehensive free-trade agreement between Canada and the US.
 * opposition: fear that it would allow US business to exploit Canada's economy + overwhelm Canadian culture
 * support: argument that without it, Canada's economy would decline irretrievably and become uncompetitive
 * came into effect in 1989, to be phased out by 1998.
 * did not create totally free trade, but freer trade
 * Trade barriers were reduced but both nations could, and did, impose retaliatory measures if they felt trading practices were unfair.
 * Within five years, trade between the two nations increased tremendously.

__1994 North American Free Trade Agreement:__ In 1994, North American Free Trade Agreement (NAFTA) came into effect.
 * extended the FTA to Mexico
 * was not a trading bloc -> did not adopt a common trade policy (setting up common trade barriers against non-member nations)