Invest Investor Know Canada

Economy of Canada

Canada enjoys the 10th largest economy in the world. It is a wealthy country and one of the G8 members. Canada is among the first five best countries in the world to live in. The economy of Canada is very diversified with the following important sectors:


Service

The service sector of Canada’s economy accounts for 67.9 % of GDP. This sector includes financial services, retail sector, education, real estate, high-tech, health, tourism, and entertainment. The services sector employs 75% of the workforce of the country.

Manufacturing

Manufacturing accounts for 13% of GDP in Canada. Canada is a major manufacturer of automobiles. Canada ranks third after the United States and Japan in exporting automotive products. Canada also manufactures, machinery, telecommunication devices, and parts as well as airplanes.

Energy

Canada is a great producer and exporter of energy in the world. Oil and gas and hydroelectric energy are the major sources of energy for Canada. Considering the vast Athabasca Oil Sands, Canada has the world's second largest reserves of oil after Saudi Arabia. Canada also enjoys huge deposits of natural gas and most parts of the country use gas as an inexpensive type of energy for heating, cooking and industrial purposes.

Agriculture

Canada is also the world's fourth-largest supplier of agricultural products, such as wheat, grains, vegetables, fruits, tobacco, forest products, fish, and dairies. Fishing and logging in Canada are among the most important industries.

Natural Resources

Canada ranks second in the world in terms of landmass and has abundant natural resources spread across its varied regions. Lumber and oil are two of the major industries of Canada. Canada also produces gold, lead, nickel, uranium, and diamonds in large amounts.

Some of Canada’s leading companies:

Agnico-Eagle Mines Ltd., Alcan Aluminum Ltd., Bell Canada Enterprise Inc., Bombardier Inc., Scotiabank, CIBC, George Weston Ltd., Imperial Oil Ltd., Loblaw Companies Ltd., Magna International, Manulife Financial Corp., Nicor, Royal Bank of Canada, Sun Life Financial Inc., Trans-Canada Corporation, Trans-Canada Pipelines, TD Bank, etc.

Money and Measurements

Canada uses the metric system of measurement. The unit of currency is the Canadian dollar, which equals 100 cents. The most common paper currency in Canada comes in $5, $10, $20, $50 and $100 denominations. Coins appear in 1 cent (pennies), 5 cents (nickels), 10 cents (dimes), 25 cents (quarters), $1 (loonies) and $2 (toonies) denominations. The $1 and $2 coins have been introduced over the last 10 years, and there are still Canadian $1 and $2 bills in circulation that are considered legal tender (they have also become collector's items). Canadian bills are clearly marked and each denomination has a distinctive color.

Banks & Currency Exchange

Although banks often offer the best currency exchange rate, some do charge a small fee to change money or traveller's cheques, and prices listed often do not include taxes. It is best to change a small amount of currency into Canadian money before coming to Canada, as banks are usually open only Monday to Friday, daytime hours (9 a.m. to 5 p.m.). Other means of exchanging your currency can be somewhat more costly. Exchange services offered by hotels, shops, and exchange booths almost always offer the highest rates or charge large commission fees. Wherever you go, always ask about hidden charges before changing money.

All shops and businesses will accept Canadian currency, and some will accept United States currency in tourist areas. All other currency must be converted.

Some of Canada's major banks are:

  • Royal Bank of Canada
  • TD Canada Trust
  • CIBC (Canadian Imperial Bank of Commerce)
  • Bank of Nova Scotia
  • Bank of Montreal (BMO)
  • Desjardins

You can also find branches of some foreign banks such as HSBC, Bank of China, etc. in Canada as well.

Banks offer a variety of services to their customers including currency exchange, safety deposit boxes for storage of passports, and savings accounts. Many Canadians use personal cheques issued by banks as an efficient means to pay for services.

Traveller's Cheques and Credit Cards

Traveller's cheques are a recommended form of currency when travelling (for safety reasons) and can be purchased at major Canadian banks. They are easily replaced if stolen or lost. Most shops, hotels, restaurants and attractions accept traveller's cheques as well as major credit cards.

The rate of exchange in effect on the day of a credit card transaction will be automatically updated on your credit card bill. Students can also apply for credit cards when they arrive in Canada; however, the expenses are due at the end of every month with interest charged on unpaid expenses.