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The Economy in Canada: What You Need To Know And How It Affects You

Canada is a highly developed economy with a dynamic market that entices many entrepreneurs to start a new business.

The country’s annual gross domestic product (GDP) saw a decrease of 7.26 percent in 2019 where it achieved an annual GDP of 1.742 trillion dollars compared to its annual GDP in 2020 of only 1.64 trillion dollars. The Covid 19 Pandemic would be the explanation behind such a decrease. With its turbulent circumstances and Canada’s 16-month lockdown, it is no wonder why there was such a decrease.

However, despite the unfortunate circumstances, Canada was ranked 9th in the Largest Economies In The World by the World Bank.

This nation depends on international trade with exports and imports contributing to about two-thirds of the countries GDP. Like any advanced country, it specialises in services mainly in these three industries; Real estate, rental and leasing; Manufacturing; Mining, quarrying, oil and gas extraction. It has good trading ties with the US, the Uk and China.

Now let’s take a deeper look at Canada’s economy and what’s in it for you.

Canada’s economy from past to present

The Indigenous peoples’ hunting, farming, and trade cultures form the foundation of what is now Canada’s economic history. The economy has undergone a series of transformations since the arrival of Europeans in the 16th century. Which saw changes mainly by the early Atlantic fishery, the transcontinental fur trade, urbanization, industrialization, and technological revolution.

Despite the fact that different industries have come and gone, Canada’s reliance on natural resources and export markets for these goods, primarily the United States, has maintained much of the economy over the centuries and continues to do so in many locations today.

Pre 2000s

In the 1980s, the majority of Canadians lived in cities, and the majority worked in white-collar jobs, generally in the service industry. Income disparities, living standards, and ways of life had declined significantly since 1945. While the regional economies were still very different, manufacturing remained largely a concern of Ontario and Quebec, while the four western provinces continued to generate enormous surpluses of natural products.

After 1945, living standards remained low in the Atlantic Provinces, and prospects were dim. As a result, interregional support has become deeply engrained in Canadian life.


In 2007, the global financial crisis began and caused the economies of many nations to go into recession. Canada suffered milder effects than its other countries like The United States and the European countries.

Despite the milder effects on Canada, the recession they faced between 2008-2009 caused a decline in the economy’s output as well and a decrease in employment.

The country entered a recession mainly due to the housing market in the United States. Cheap financing and financial deregulation caused an increase in buying houses. This led to a sharp decline when interest rates started to rise, leading financial institutions in the US to fail. This had an impact on the confidence in the global financial sector, which led to Canadas’ consumer spending and business investment declining.

When the recession happened, Canadas’ GDP declined by 3.3 percent and its exports were also decreased by 16 percent. The government, however, turned this around by creating policies to restore the confidence of the global financial sector

2010s- Present

Many countries are now facing major economic issues due to the Covid 19. Canada has had its fair share of the impact on its economy.

The Covid 19 pandemic caused Canada’s economy to decline in the first half of 2020. However, there was an increase of 9.1 percent in the third quarter, followed by a 2.2 percent increase in the fourth quarter. In 2021 the country saw an increase of 0.3 percent in its real GDP.

Canada’s economy continues to adjust and adapt to the unpredictable waves of the Covid 19. With its unprecedented contraction in global economic activity, the government has come up with many plans and policies like Candas’s COVID-19 Economic Response Plan to assist Canadians who are struggling during the years.

What appeals to the different buyer-personas

Monetary policy

With the Covid-19 pandemics harsh effects, The Bank Of Canada has lowered its interest rates to 25 percent to support economic activity in Canada. this is to support consumers and businesses by lowering payments they may have on new or existing loans.

The Bank Of Canada has also launched a range of liquidity facilities and purchase programmes to help with market functions, credit flowing and to assist the interest rates cuts work its way in the economy.

To further support the recovery, The Bank has stated that it will continue large-scale asset acquisitions of longer-term debt. The combination of the low policy rate and asset purchases is delivering significant monetary stimulus.

Support to key financial markets

Other than the Monetary policy, the bank is also supporting key financial markets to ensure the continuity of proper functions and growth to the economy. 

The Bank of Canada made adjustments to the market liquidity operations to maintain market activity and credit availability during these uncertain times in which conditions are changing. They will also expand its term repo facility qualified collateral to include the full range of qualifying collateral under the perpetual liquidity facility, except for the unsecured loan portfolio. This expansion of qualified guarantees will support the financial conditions of financial institutions by providing regular private financing support.

Why Canadas’ economy is the ideal place for you to live, work or start a new business

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1. Cost of living in Canada

Canada is by no doubt an expensive city to live in. Since it is a developed country, the cost of living would be higher should you intend to live on the luxurious side. Canada was ranked 26th in Numbeo’s “Costs of Living” list.

Housing will be one of your highest priorities when you move to Canada. Thus, it should be good knowledge to know that it is the most costly expense when relocating to Canada. We recommend you to do extensive research before settling on one place as the cost of living varies from province to province.

2. Starting a business in Canada

Starting a business in Canada beholds many opportunities for you! In fact, they were in the top position n in Forbes’ Best Countries For Business list in 2011

Canada is well-known for its trade freedom, investor protection, low corruption, minimal red tape and low corporate tax rates.  has one of the lowest tax rates of just 15 percent! The government constantly lowers corporate taxes to aid companies with this expense.

3. Job Oppurtunities in Canada

Many foreigners see Canada as a country filled with opportunities. In accordance with that statement, the Canadian economy created nearly one million jobs in June as companies closed due to COVID19-related regulations reopening.

Many immigrants choose to work in Canada as fair salaries and well-balanced life is expected. Many Canadians are hard-working people who are devoted to their work. So if you are qualified and ready to relocate, the good news is that Canada is looking for people like you.

Feeling ready to make the big move?

Head over here to begin your journey
Or start ticking off your relocation checklist here

Still unsure?

Learn more about Canada here
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