The economy of Canada varies greatly by provinces and territories because each region has unique assets. The western provinces, for example, produce more natural resources like oil, lumber, and metals, while the prairie provinces generate energy, commercial, and farm products, and the eastern provinces produce energy, automotive, and consumer goods.
In recent years, however, employment in public firms has expanded faster than employment in private enterprises. Work in the public sector includes positions in transportation, schools, hospitals, museums, and utilities among other places.
Private Sector Versus Public Sector
The Canadian economy is made up of both private and public businesses. Individuals run private enterprises that are not regulated by the government. Public organizations, also known as Crown corporations, are businesses that are directly or indirectly controlled by the Canadian government through directors appointed by government leaders. Federal, provincial/territorial, and municipal public enterprises exist. The private sector employs the vast majority of Canadians.
Rate of Unemployment
Unemployment Rate Compared to the other G20 countries, Canada’s unemployment rate was 5.9% in 2017. However, according to Statistics Canada, this is the lowest rate of employment in Canada since February 2008, indicating that unemployment in Canada is decreasing.
Major Economic Sectors in Canada
The service sector accounts for two-thirds of the Canadian economy. Real estate, manufacturing, and environmental assets are all important economic sectors.
Resources of Natural Origin
According to the Natural Resources Department of Canada, Canada is one of the world’s largest energy suppliers and consumers. Mineral wealth includes natural gas, of which Canada is the world’s fourth-largest producer and exporter, crude oil, of which Canada is the world’s third-largest exporter, and uranium, of which Canada is the earth’s second-largest producer and exporter. Natural resources in Canada are majorly found in Alberta, which has large deposits of oil, coal, and gas, and Saskatchewan, which has the most agricultural land in Canada.
Information and Communications Technology (ICT)
Information and Communications Technology (ICT) Canada, particularly Toronto and Vancouver, seems to have become increasingly technologically competitive. Residents of the Silicon Valley tech hub are even making their way to Canada via Canada’s Start-Up Visa program. Software and computer services account for more than two-thirds of Canada’s information and communications technology (ICT), and more than two-thirds of ICT products are exported. Because of the high demand for computer and software services, wages and employment in this industry have increased rapidly.
Agriculture and Food Production
Canada is the fifth-largest exporter of agricultural and agri-food goods in the world. In reality, the agricultural industry employs approximately one in every eight Canadians. Each region and territory is noted for its distinct agricultural product and service production. Saskatchewan has the most agricultural growth area, specifically wheat, whereas Quebec generates more than 75% of the world’s supply of maple syrup!
Canada’s taxation system
To pay for the various publicly-funded social and health services that Canadians enjoy across the country, Canada has a comprehensive taxation structure. While you may hear about Canadians paying higher taxes than Americans, Canada actually ranks below average in an OECD tax assessment. As a result, Canadians pay less tax than their peers in France, Germany, New Zealand, the United Kingdom, and other countries.
In Canada, there are several forms of taxes, including income, sales, property, and corporation tax. In Canada, income tax accounts for the lion’s share of federal government revenue. In fact, it funds about half of the federal government’s budget. Corporate and sales taxes each make for around 15% of the federal government’s revenue.
The taxes system in Canada is based on residence and spans from January 1st to December 31st. If you live in Canada, you must file a tax return by the deadline of April 30th. You must include revenue made both within and outside of Canada. If you live outside of Quebec, you must file a single tax return that includes both provincial and federal taxes. If you live in Quebec, you must submit separate federal and provincial tax returns. Income taxes in Canada are incremental, like in other nations. This implies that the more money you make, the more taxes you will have to pay.
Property tax is an asset tax. If you own a house in Canada, you must pay property taxes on it. The amount you pay will vary by area, like with other tax systems in Canada. Local governments collect property taxes. Although no one likes paying taxes, property taxes pay for a variety of services such as water, snow removal, waste collection, policing, and fire protection.
In Canada, corporations, including non-profits and dormant businesses, pay taxes both on profits and capital. Corporate taxes are collected both at the federal and provincial levels. As a result, the corporate tax rate varies not only based on the nature and size of the business, but also by the province in which it operates.
Corporations based in Canada are generally liable to Canadian corporate income tax (CIT) on international income. Non-resident corporations are liable to CIT on income received from doing business in Canada as well as capital gains resulting from the sale of taxable Canadian property.
System of Sales Taxes
The majority of consumer products and services are also taxed in Canada. The federal government’s Products and Services Tax (GST) and provincial governments’ Provincial Sales Tax (PST) apply to the vast majority of goods and services purchased in Canada. The GST and PST are merged in certain provinces to establish a Harmonized Sales Tax (HST). There is no PST in other provinces. Because sales taxes are levied by both the provincial and federal governments, the tax rate on any consumer commodity or service may differ by province.
The price of an item at checkout is something that many individuals find unexpected or puzzling when they come to Canada for the first time. This is because, unlike in many other countries, sales tax is not frequently included in stated prices in Canada. Consumers may wind up paying five to fifteen percent more in taxes than the quoted price, based on the province and the type of commodity or service.