GDP (gross domestic product) is usually considered an indicator of a country’s standard of living. Let’s see how the GDP is developing in Canada.
What Is The GDP?
It is the total market value of all final goods and services produced within a country in a given period. It can be determined in three ways, but is usually calculated as a sum of private consumption (food, rent, jewelry, gasoline, medical expenses, etc. — but not the purchase of new housing), investments (including business investment in equipments), government spending (salaries of public servants, purchase of weapons for the military), and net exports (the difference between export and import).
Export as the biggest component of Canadian GDP
Canada is one of the few developed nations that is a net exporter of energy. In 2009, net exports of energy products amounted to 2.9% of the GDP. Canada’s economy is diversified and highly developed, and its foundation is foreign trade, which is responsible for about 45% of the nation’s GDP. The U.S. is Canada’s largest agricultural export market, taking well over half of all Canadian food exports.
Overview Of GDP Growth
In recent years, the Canadian GDP was increasing, but the economic crisis caused the GDP to fall by 2.5%. Last year, the GDP grew by 3.07%, and the trend of increasing is expected to continue. According to a list published by the International Monetary Fund in 2010, Canada has the fourteenth highest real GDP per capita in the world at $1,330,106 million, and Canada’s nominal GDP of $1.60 trillion ranks ninth worldwide. The U.S. ranks first, with a real GDP of $15,150,667 million, and China ranks second, with a real GDP of $14,624,184 million. The forecast calculated by the International Monetary Fund shows that Canada is likely to remain in fourteenth place.
Canadian provinces and territories by GDP
Ontario, Quebec, and Alberta take over 70% of the national GDP. In the list of GDP per capita, Alberta took first place with $81,188 in 2008. There is wide variation among provinces. If the GDP of Ontario, the most populous province, were considered a national GDP, it would rank 25th largest in the world. The territories’ GDPs are comparable to those of smaller island nations, but smaller than many larger Canadian cities.
During The Recession
The economic contraction in Canada was less severe than that of some of its peers, says the Conference Board of Canada in its report published in March 2011. In 2008, Canada’s GDP actually grew, while six peer countries experienced negative growth. In 2009, all peer countries except Australia saw their GDPs fall, but Canada’s contraction was much milder than many of the other countries. Ireland’s and Finland’s GDPs fell by about 8 per cent, and the GDPs of six other European countries — Denmark, Germany, Italy, Japan, Sweden, and the U.K. — fell by 5 per cent. Canada’s progress is a result of its better policies and regulations. According to the report, a well-defined system of financial regulation, more prudent management practices, and more effective regulatory oversight prevented Canadian financial institutions from becoming over-leveraged against their capital base. As sub-prime mortgages were rare in Canada, the housing market was protected from a sustained decline.
Canada’s GDP rose 0.8% in the fourth quarter of 2010, following a 0.4% gain in the previous quarter. All major industrial sectors, with the exception of manufacturing, increased their output. The largest contributing sector was mining, oil, and gas extraction. Final domestic demand advanced 1.25, but higher demand for exports contributed the most to the growth. Expressed at an annualized rate, the real GDP in the fourth quarter grew by 3.3%, after expanding 1.8% in the third quarter. In comparison, the real GDP in the U.S. grew by 2.8% in the fourth quarter. For the year 2010 as a whole, the real Canadian GDP grew by 3.1%, following a 2.5% decline in 2009. Canada took 11th place among OECD countries in the list of GDP rate — very close to the OECD’s average.