Introduction
Canada’s economy is among the most sophisticated and most prominent globally. The country’s overall gross domestic product (GDP) in real USD was $1.64 trillion in 2020. As a result, Canada is now the world’s tenth-biggest economy. Exports and imports of goods and services account for around one-third of the GDP in Canada.
Economic Health
Consumer Price Index
The consumer price index (CPI) is a regular report published by Statistics Canada that tracks retail inflation. The index is calculated by comparing changes in a set basket of products and services. The Canadian CPI grew to 148.90 units in March 2022, up from 146.80 points in February (Kim, 2020). The relative significance of products and services in total consumer spending is weighted by price fluctuations of the items and services reflected in the CPI. Every commodity or service is regarded as a component of a hypothetical basket, and price changes are given a basket allocation or weight proportional to their part of total consumer expenditure. CPI is critical in determining Canada’s economic status.
Gross Domestic Product
Gross Domestic Product (GDP), which quantifies the entire cost of the goods and services generated in an economy, has been policymakers’ most widely utilized statistic to gauge national performance. Hartwick (2021) depicts Canada’s GDP from 1986 to 2020, with predictions through 2026. Canada’s gross domestic product will be about 1.64 trillion dollars in 2020. GDP is a consistent, timely, and consistent measure of economic activity. It is incredibly significant to public finances and aids in formulating fiscal policy.
Quality of Life
Based on economic factors such as GDP, purchasing power index (PPI), and cost of living, Canada’s economy and quality of life are comparable. The PPI is currently 106.94, while the cost of living is 70.26. Similarly, changes in GDP are closely linked to changes in income and employment Doyar (2019). It is critical to raise Canada’s living standards and preserve budgetary health by improving GDP through increased productivity, labor force involvement, and investments.
Trading Partners, Exports, and Imports
The United States, China, and the United Kingdom are the country’s leading commercial partners. Property investment, rental, lease, production, mining, quarries, and petroleum & energy exploitation are the three most important businesses in terms of GDP contribution (Ciuriak et al., 2020). Canada’s top exports are motor vehicles and components, small cars and commercial vehicles, consumer items, metallic and non-metallic industrial minerals, crude oil, and bitumen. Automobile products, electronics equipment, plastic, and gasoline are among its top imports.
Canada’s Future Economy
Economic experts predict that Canada’s economy may grow in the future. When keeping other economic determinants constant, economic theory predicts that firms will find it more difficult to attract employees when unemployment drops, causing wages to rise, and leading to more significant inflation and rising interest rates. Economists in Canada believe that the present economic cycle is unique in that high unemployment drops have not resulted in considerable wage challenges, resulting in controlled inflation Doyar (2019). Such a scenario projects future improvement in the Canadian economy.
Conclusion
Conclusively, In Canada, the economy has a complicated history. The government has often taken the lead in promoting the development and institutionalization of the Canadian community. GDP, CPI, and unemployment rates are important economic development markers, but Canada has maintained them well-balanced. China and U.S. are among their main trading partners. Insofar, as the quality of life in Canada reflects economic growth and development.
References
Ciuriak, D., Ciuriak, L., Dadkhah, A., Lyu, Y., & Wen, Y. (2022). Assessing export opportunities for Canada in India. Available at SSRN 4021609.
Doyar, B. V. (2019). R&D expenditures by field of science and GDP: Which causes which in Canada? Economics and Business Letters, 8(1), 31-40.
Hartwick, J. M. (2021). Quantity indices in the construction of the GDP series. Theoretical Economics Letters, 11(4), 680-685.
Kim, M. (2020). The price effect of trade: Evidence of the China shock and Canadian consumer prices (No. 2020-02). Centre for the Study of Living Standards.