Economy – BC and CanadaEconomy – BC and Canada

Everyone has an interest in this topic because everyone is directly involved in BC’s economy.

How many have jobs?

What have you purchased in the last month?

What do you spend your money on?

Have you purchased these before?Have you purchased these before?

How old is Mr. Fast? These were cool when he was in grade 10 80's Music Videos

                                                                                                                     

               

                                    

History of Canadian EconomyHistory of Canadian Economy

“Drawers of water and hewers of wood.”

Our economy has been based around the exploitation of natural resources

Colonialism - During this period, (after Britain defeated France at Battle of the Plains of Abraham 1759) the colonies served to provide cheap raw materials to Britain, which were then turned into manufactured goods and sold back to the colonies for profit. 

The development of manufacturing - Britain’s entry into the First World War (1914-1918) brought a high demand for Canadian manufactured goods, particularly armaments.

History of Canadian EconomyHistory of Canadian Economy

The automobile industry also started around this time.  Canadian auto manufacturers partnered up with U.S. automakers, then in the 1970s with Japanese automakers.

The turn of the 20th century also saw the emergence of a significant garment industry (Montreal, Toronto, Winnipeg, and Vancouver).

Canada/USA Free TradeCanada/USA Free Trade

The Canada-U.S. Free Trade Agreement (1989) and the North American Free Trade Agreement (NAFTA) (1994)  

North American Free Trade Agreement explained Pros and Cons of NAFTA

Eliminated protective tariffs (taxes) on imported goods

Led to a dramatic increase in U.S.-Canada trade.  By the end of the 1990s, the U.S. accounted for 87% of all Canadian trade.  For better or for worse, Canada was tied closer than ever to the U.S. economy

Canada/USA Free TradeCanada/USA Free Trade

Benefits: (write 2-3 for each)

Negatives:

Canadian Economy TodayCanadian Economy Today

Canada currently has the tenth largest economy

One of the richest in the world in terms of its Gross National Product (GNP)

Canada has the lowest corporate tax rates among all G8 nations

Low income Canadians, by contrast, have generally seen their incomes and purchasing power decline since the 1970s

Canadian Economy TodayCanadian Economy Today

AGRICULTURE Canada remains one of the world’s largest exporters of agricultural products,

particularly wheat and grains. The prairies, particularly Saskatchewan, are the center of the wheat industry. For the most part, small family

farms have been replaced with large agribusinesses.

Canadian Economy TodayCanadian Economy Today

The Energy Sector: Oil and gas

Canada possesses some of the world’s largest oil and natural gas industries. 

Alberta’s Athabasca Oil Sands are the world’s second largest oil reserves outside of Saudi Arabia, though their development has been highly controversial due to the destructive environmental impact of extracting oil from them.

British Columbia has developed a profitable off-shore oil industry, as has Newfoundland, which has helped rebound their economy after the collapse of the fisheries in the 1990s.

Canadian Economy TodayCanadian Economy Today

Mining

Canada is the world’s mining giant. ¾ of all mining companies in the world are Canadian.  The top mining companies are Suncor, Teck Cominco, Barrick Gold, Goldcorp, PotashCorp, Agrium, Cameco, and Lundin Mining.  Many of these companies have come under attack by human rights groups such as Mining Watch for their impact on communites and the environment both in Canada and in foreign countries

Canadian Economy TodayCanadian Economy Today

MANUFACTURING

As a result of Canada’s Free Trade and NAFTA agreements, as well as a rising Canadian dollar, Cartoon showing Earth in space with a tag that says "Made in China"manufacturing has been in decline in Canada, hitting Ontario particularly hard. Many manufacturers have been bought out by American firms or transferred job overseas, where the labour is cheaper.

Garment manufacturing now takes place almost entirely overseas, and the auto sector has shrunk.

Canadian Economy TodayCanadian Economy TodayThe Big 5

Royal Bank of Canada (RBC) Toronto Dominion Bank (TD-Canada Trust) Bank of Nova Scotia (Scotiabank) Bank of Montreal (BMO) Canadian Imperial Bank of Canada (CIBC). 

During the world financial crisis of 2008, Canadian banks fared best among G8 nations. More rigorously regulated

Canadian Economy TodayCanadian Economy TodayThe Service Sector

The service sector now provides ¾ of all jobs in Canada, the largest portion of which are low wage jobs in the retail sector. 

The second largest portion of service jobs in Canada are in the business service sector in things like financial services, real estate, and communications.  

Public sector education and health care workers are the next largest segment of social service workers, followed by high-tech workers.

Canadian Economy TodayCanadian Economy TodayThe Loonie

Because of NAFTA and the withdrawal of governments from managing the economy, the Canadian economy has become much more dependent on foreign investment (i.e. U.S. corporations) to create jobs.

For this reason, it has been in the interest of Canadian fiscal policy to keep the value of the Canadian dollar low in order to attract businesses looking for cheaper labour costs.

Sectors of EconomySectors of Economy

1. Production

2. Exchange of products

3. Consumption of products

Reasons for worldwide economic Reasons for worldwide economic downturndownturn

1. Bursting of United States housing bubble.Too many people borrowing money at low interest with no down payment.

2. Americans have too many mortgages, too many credit cards and too much national debt. YouTube - The Economic Crash and Depression of 2009 - How much is?

3. They rely on foreign imports from China and other nations

Reasons for Worldwide Economic Reasons for Worldwide Economic DownturnDownturn

4. America’s own economy has become too service oriented and lacks manufacturing. Also manufacturing jobs have left the US for cheaper costs (auto, Flint Michigan YouTube - Roger & Me (1989 trailer) a film by Michael Moore)

5. China's trade exports out-matches the United States (ie. they can build cars/trucks/SUVs for half the price).

1. Production – 1. Production – most of production falls into 4 levels of economic most of production falls into 4 levels of economic activityactivity

Primary IndustriesPrimary Industries

Definition: extraction of raw materials Examples?

Forestry IndustryForestry Industry It’s decreasing, due to the lesser need for lumber in the USA

and the rising Canadian dollar. People are more reluctant to purchase lumber from Canadian businesses because it is no longer cheap.

Most of what it exports goes to the U.S. With the housing industry in the U.S. slumping, there is less demand for B.C. lumber. (Much fewer houses being built in the U.S., so much less demand for B.C. lumber).

ForestryForestry IndustryIndustry

Prices for lumber have plummeted, along with the decreased demand. So we're earning less from what we actually do sell.

Canadian dollar has rocketed up in value. So, internationally, our lumber is more expensive. Our forest industry faces dire times

Fishing IndustryFishing Industry

Sectors1. Commercial – harvesting of aquatic plants and animals

from oceans and rivers.

                                                   

2. Aquaculture –2. Aquaculture – the farming of fish in fresh water and the farming of fish in fresh water and

saltwater environmentssaltwater environments YouTube - "Farmed Salmon Exposed" - Intro/ExcerptYouTube - "Farmed Salmon Exposed" - Intro/Excerpt Farmed Salmon Farmed Salmon

Exposed -- Global Week of ActionExposed -- Global Week of Action

YouTube - 2004 PCB Farmed Salmon TV news storiesYouTube - 2004 PCB Farmed Salmon TV news stories

3. Seafood Processing – Involves the smoking, 3. Seafood Processing – Involves the smoking, canning, freezing of fish.canning, freezing of fish.

4. Sport Fishing – 4. Sport Fishing – Fishing that occurs in all types of Fishing that occurs in all types of waters and is a major tourist attraction for domestic and waters and is a major tourist attraction for domestic and

foreign tourism marketsforeign tourism markets

Secondary Economic ActivitiesSecondary Economic Activities

“Production or refining of raw materials”

Takes the raw materials and does something to it (eg. Fish plant, logging mill, auto manufacturing)

Employs more people than Primary

Why have Primary #’s dropped?

Secondary ActivitiesSecondary Activities

Tertiary Activities Tertiary Activities

Service sector employs ¾ of Canadians Retail sector the largest (12%) Service sector accounts for 78% of GDP

(value of all final goods and services)2nd largest portion of service sector is the

business services (financial services, real estate, communications)

Health Care 3rd largest

Gaming Gaming

Canada has the 3rd largest gaming industry in the world, behind only USA and Japan

Canadian gaming industry