Economic Analysis of Canada
As the world’s 10th largest economy, Canada has proven itself to be very competitive and successful with its highly developed and diversified economy. It is closely related to the United States, due to the economic integration with the US-Canada Free Trade Agreement (1989) and North American Free Trade Agreement (1994) (economy watch). The trade agreements allowed trade barriers to be removed, which allowed the economy to grow. Other factors of growth include; it’s market-oriented economic system, process of production, and their high status of living (heritage.). On the economic freedom scale, Canada is reported as a the 9th freest economy, at 77.7(heritage). The economy has been sustainable due to its strong rule of law and the foundation of their open-market system (Heritage). Their strong rule of law provides foreign investors with complete and equal access to their legal systems.
As of 2017, the countries current GDP is $1.65 trillion with a growth rate of 3.0%. The per capita of the country is reported as $42,870 (world bank). Main sectors of GDP include: Agriculture (1.6%), Industry (27.7%), and the Service Industry (70.7%). The services industry generates approximately 3/4 of Canada’s annual GDP. The government reports their overall tax burden as 31.9% of total domestic income (heritage). Government spending is reported as 39.9% of total GPD, which is a result of an increase in revenue (heritage). Its public debt is 28.9% of the GPD, with revenues of $623.7 billion in expenses of $657.3 billion. The trade balance in Canada is reported as -24.0 (CAD Billion). Its main industries include transportation equipment, chemicals, minerals, and food products. It exports are reported as approximately $390.1 billion in areas such as motor vehicles and parts, industrial machinery, and aircraft(___). Main trading partners include the United States (76.2%), the European Union (7.7%), and China (4.1%). The country imports $416.6 billion. Main imports include; machinery and equipment motor vehicles in parts and crude oil. The major import partners are; United States at 52.2% China 12.1% and the European union 11.4%.
In terms of land area, Canada is reported as the second largest nation in the world. The country contains a surplus of mineral and energy resources, which have been a huge factor in their income (economy watch). The country is recorded as having the second largest oil reserves as well as the 21st natural gas reserves in comparison to the world. Its major trading partners are the United States, China, and the European Union with natural minerals being one of its major exports and imports. Approximately 45% its GDP is influenced by foreign trade.
In Canada the unemployment rate is at an all time low of 5.6%. It has been reported that the country has experienced a 2.3% increase in full-time employment (Ontario). The sectors of services (1.7%) and goods (1.3%) have also experienced a substantial amount of growth (Ontario). The country has also experienced an increase in hourly wages. From 1997 to 2017 the hourly wage increased from $24.00 to $26.43 (Ontario).
Cultural Analysis of Canada
Canada’s main goal as a society is to create a vibrant and diverse culture. Its culture is heavily influenced by the French and European members of their society. Canada’s culture is based upon their values of fairness, equality, completeness and social justice (Kwintessential).. The government heavily influences their culture by providing public health care, high taxes to promote equality, and promotion of equal rights in their fair legal system (Kwintessential). In order to further evaluate the culture of Canada, our team used the Hofstede Insight to analyze the culture of Canada.
Canada scored a 39 on the scale of Power Distance, which defines the countries view on equality and status in society. Describing the culture in Canada as more interdependent. Canada views each member of society as equal and believes that each member of society should be treated equally and given equal rights. This dimension is expressed through Canadas society by its lack of class distinctions in their community. In business, managers of an organization focus heavily on providing employees with openness to create and perform.
Individualism defines the degree of how dependent members of society are among each other. With a score of 80, Canada can be defined as a society that looks after their family and themselves. Meaning that Canada is driven by independence. In business, Canadians are expected to rely on themselves and prove a strong work ethic.
Masculinity is based upon whether the society is driven by Success and competition. In Canada, they are reported as being moderately masculine with a score of 52. The country prides itself on attaining high standards of performance in all areas of life. However, they are more laid-back and avoid advertising their success. They are known for living a balanced lifestyle between their personal lives and work lives while still attaining higher standards and performance.
Uncertainty Avoidance defines how a society views their control on the future and where the future may lead. Canada scored a 48 on this dimension, meaning that they are more accepting towards the unknown. The country is open to excepting new ideas and innovation. In their business life, they promote the importance of new ideas and innovation to further their development and success, globally.
Long Term Orientation defines how a society reverts back to their history to manage their current challenges. Canada scored a 36 on their long-term orientation which defines it as a Normative society. Canada is an example of a country that focuses their concerns on establishing quick responses to any conflict while also incorporating their traditions to assist them with the conflict resolution.
Indulgence is a way to define how a country controls one’s desires and impulsive decisions. Canada’s score of 68 defines its culture as more indulgent. Canada is more open to accepting to one’s impulsive decisions and their desires. Canadas society believes it is important to enjoy life and have fun. They are known for having a more free-spirited outlook on life and their finances.
In comparison to The United States The countries are very similar in many of aspects of the Hofstede Index such as; Indulgence, Uncertainty Avoidance, and Power Distance. The slight differences are found in the areas such as; Individualism Masculinity, and Long-Term Orientation.
The largest distance between the two countries is seen through the Individualism index. The Hofstede index states that America’s Power Distance (40), along with its Individualism (91) reflects the countries values of equality. In America’s culture, organizations will have levels of hierarchy to maintain operations and convenience for all members in the organization. The United States and Canada have similar values in regard to business. They believe that communication is important and that each individual should have the opportunity to freely create and innovate in order to achieve successful development. In regard to independence in society, the United States and Canada are similar in the sense that they tend to be more independent; focusing more on oneself and their immediate family.
The US score 10 points higher than Canada on the Masculinity index, with a score of 62. United States culture portrays this dimension through the patterns of behavior in their society regarding success, competition, and achievements. The United States society is more flamboyant in promoting their high levels of achievement and success.
The third difference, along the dimension of the Hofstede index, between the United States and Canada is shown in its the Long-Term Orientation. In the United States, it is more likely that the country will question new information and research, in order to discover the truth. The United States focuses more on short term performance. Many businesses will report quarterly results, which motivates employees to achieve rapid results in a shorter period of time.