Among industries industry of Canada The mining industry stands out, which is distinguished by its exceptional diversity of production. Almost all the main types necessary for modern industry are mined here on a significant scale (with the exception of bauxite, manganese, chromium, diamonds, phosphorites, and some rare metals). In general, 26 types of metals, 24 types of non-metallic raw materials, and all major types of mineral fuels are mined.
Extraction of non-ferrous, precious and radioactive metals concentrated in the southern part of the Canadian Shield, where the world's largest copper-nickel deposit, Sudbury and the Blind River deposit (both in Ontario) stand out; British and Yukon enterprises located in the zone also play a significant role in the extraction of non-ferrous metals. The bulk is mined in central Labrador. In the southern, most populated part of the sedimentary zone, the extraction of oil, sulfur (Alberta province) and potassium salts (Saskatchewan province) is clearly localized. Almost all asbestos mining is concentrated in the southern part of the province of Quebec, within. The Eastern Canadian (New) that served as the basis has now been significantly depleted, and this industry is developing in the provinces of Alberta and Columbia.
Perspective further development mining industry is associated with the resources of the Canadian North. According to incomplete data, proven oil reserves here amount to 205 million tons, potential 4680 million tons, proven gas reserves 684 billion cubic meters, potential - 10610 billion cubic meters. The North's share of Canadian mining output is:
- 90% - for iron ore mining,
- 50% - lead, zinc, copper, uranium,
- 10% - gold, silver, asbestos, tungsten.
Canada's energy resources are exceptionally large and diverse. The country ranks 3rd in the world in electricity production. A number of large hydroelectric power plants: Churchill Falls Churchill (5.2 million kW), Boarnois on the river (1.6 million kW), Gordon Scar on the Peace River (2.4 million kW), a whole cascade of large hydroelectric power plants on the Manicouagan rivers and Utard (total capacity 6.6 million kW).
Approximately 69% of the energy produced in Canada comes from hydroelectric power plants, 25% from thermal power plants, and 6% from nuclear power plants.
The Canadian fund is of great importance for the world market. The forested area of the country is 447 million hectares, industrial forests occupy 245 million hectares. The total timber reserves of industrial forests are 20 billion m kg, and the average is 337 million m kg. Currently, more than 100 million cubic meters are harvested annually. wood
Canada's manufacturing industry is the most important industry, accounting for more than half the value of marketable products. It employs over 2 million people.
In the process of development of the manufacturing industry, two patterns are observed: a general one, inherent in the manufacturing industry of all developed countries (accelerated development of mechanical engineering, especially electrical engineering) and a specific, Canadian one (development of the woodworking and pulp and paper industries). It should be noted that the growing role of heavy industry (metallurgy, chemistry), whose share in the manufacturing industry (by value) is approaching 50%.
Canadian mechanical engineering, which mainly works to satisfy the domestic market, accounts for about 25% of the value of manufacturing products. Only the automotive and aviation industries work for export. Manufacturing plays a leading role in Canadian vehicles: cars, airplanes, diesel locomotives, ships and snowmobiles. Canada produces about 2 million cars and 400 thousand snowmobiles per year. The most important center of Canadian mechanical engineering is the city of Windsor. General mechanical engineering in Canada is poorly developed, and machine tool manufacturing is practically absent.
Well developed, and in particular production. sulfuric acid, mineral fertilizers, synthetic rubber, rubber products, plastics. The main centers are Montreal, Toronto, Niagara Falls.
Canada ranks 8th in steel production. The main centers are Hamilton and Sydney.
In terms of logging, sawmilling and woodworking, Canada ranks 3rd in the world after Russia and, in the production of pulp and paper pulp - 2nd, newsprint - 1st. Canada supplies the world market with about 35% of all lumber, cellulose and paper pulp, about 75% newsprint. The pulp and paper industry produces about 9% million tons of newsprint per year. Its main regions are Quebec and Ontario, where up to 60% of its capacity is concentrated.
Increased American control over Canada's economy is meeting growing resistance. In Canada, special customs regulation has been introduced for the import of goods supplied by American companies, and an attempt to penetrate US capital into uranium mining, oil field development, etc. has been suspended.
Introduction
For my course work, I chose a country like Canada. Canada is one of the richest countries in the world, a member of the Organization for Economic Cooperation and Development and the G8. Canada is one of the world's leading trading countries. In terms of foreign trade turnover, it ranks sixth in the world, and in terms of per capita turnover it is ahead of all other large countries in the world. 25% of Canada's marketable output is exported, and in industries such as the pulp and paper industry, sawmilling and the aluminum industry, export volume exceeds half of production. Peculiarities geographical location Canada has determined the orientation of its foreign trade towards two countries: the USA, as a market for raw materials and semi-finished products, and the UK, as the main consumer of agricultural products and some types of industrial raw materials. In terms of the scale of foreign economic relations with the United States, Canada has no equal; it ranks first in US imports. Many Canadian goods are imported into the United States under special bilateral duty-free trade agreements, and some raw materials and fuels are exported from Canada to the United States under limited quotas. In addition to the United States, Canada is developing trade with other partners, especially the Common Market countries and Japan.
In his course work I consider: features of Canada’s foreign economy, foreign economic relations, trade relations and Russian-Canadian relations.
1. Canadian Economy
1.1 General information
The Canadian Federation was established in 1867 by a decision of the English Parliament - the British Act North America, which, together with subsequent amendments and additions, is still integral part Constitution of Canada.
In April 1982, Canada adopted the Constitutional Act, which adjusted and significantly supplemented the country's fundamental law, excluding any participation of the British Parliament in the Canadian constitutional process.
The head of state formally remains queen of england, represented in the country by the Governor General (since September 2005 - Mikael Jean), who is appointed from among Canadian citizens on the recommendation of the Prime Minister. Legislative power belongs to a bicameral parliament. Executive power is exercised by the government headed by the Prime Minister, which is usually formed by the leader political party, which received the largest number of seats in parliament in the elections. Canada is a member of the British Commonwealth of Nations and the Community of Francophonie.
Official languages are English and French.
Area – 9.97 million square meters. km.
Administrative division: ten provinces (Alberta, British Columbia, Quebec, Manitoba, Nova Scotia, Newfoundland and Labrador, New Brunswick, Ontario, Prince Edward Island, Saskatchewan) and three territories (Nunavut, Northwest Territories, Yukon).
Population - according to Statistics Canada, in 2007 the country's population was 33 million people, of which about 61% were English-Canadians, about 24% were French-Canadians, and 15% were other ethnic groups. Indigenous people– Indians (about 800 thousand) and Eskimos (56 thousand). Immigrants from Russia – about 350 thousand.
Capital – Ottawa (1.3 million people); the largest cities are Toronto (5.6 million people), Montreal (3.5 million people), Vancouver (about 2 million people).
1.2 Features of the Canadian economy
Canada is one of the richest countries in the world, a member of the Organization for Economic Co-operation and Development (OECD) and the Group of Eight (G8). Canada is a market economy with slightly more government intervention than the United States, but much less than most European countries. Canada has always had a lower level of gross domestic product (GDP) per capita than its southern neighbor (though wealth is more evenly distributed) but higher than that of industrialized Western European countries. Since the 1990s, thanks to the government reform and government management based on the principle of economic liberalism, public debt changes from 68.4% of GDP in 1994 to 38.7% in 2004 due to a “series” of budget surpluses. For the past ten years, following a period of economic excitement, the Canadian economy has been growing rapidly with low unemployment and large federal budget surpluses. At the same time as the deficit fell, the share of federal government spending in GDP changed from 19 to 12%, and total government spending fell by about 10% from 1992 to 2004. Today, Canada is very similar to the United States in terms of its market orientation in economic system, its productive forces and its high standard of living. While in January 2008 the state unemployment rate was the lowest since 1974, at 5.8%, provincial unemployment rates ranged from 3.2% to 12.2%.
The impressive growth of the manufacturing, mining, and service sectors transformed an almost entirely agricultural state into a predominantly industrial one with a predominantly urban population. Like other modern industrialized countries, the Canadian economy is dominated by the service sector, employing three-quarters of Canadians. However, Canada differs from other industrialized countries in the importance of extractive industries to its economy, particularly its oil and forestry industries.
Canada is an active energy supplier. Canada has gas fields on the east coast and large gas and oil reserves located primarily in Alberta, British Columbia and Saskatchewan. Thanks to the large expanses of tar sands in the Athabasca region, Canada ranks eighth among oil producing countries (2006). British Columbia, Manitoba, Ontario, Quebec and Newfoundland and Labrador have abundant sources of cheap, renewable hydropower. Canada is the world leader in uranium mining.
Canada is one of the world's most important suppliers of agricultural products, mainly through the western provinces - the largest suppliers of wheat and cereals, coordinated by the Canadian Wheat Board. Canada ranks second in the world in diamond production, is the largest producer of zinc and a leader in the production of many others. natural resources: gold, nickel, aluminum and lead. Many towns, not to mention all the towns in the northern regions of the country where farming is difficult, exist because of a nearby mine or source of timber. Canada also has a significant industrial sector, concentrated mainly in southern Ontario, where there are a number of auto assembly plants that fulfill orders from American automobile giants, and in Quebec with its aerospace complex. Canada is one of the world leaders in telecommunications, biotechnology and the pharmaceutical industry.
Partly because of its more developed mining industry, Canada is heavily dependent on international trade, especially trade with the United States. The conclusion of the Free Trade Agreement in 1989 and the North American Free Trade Agreement (NAFTA) in 1994, which Mexico joined, led to impressive growth in Canada's trade and economic integration with the United States. Having experienced an economic slowdown in 2001 that was not technically considered a recession because it lasted less than six months, Canada has not had a recession since 1991 and has the overall best economic performance in the G8.
The currency of Canada is the Canadian dollar (CAD). Common bills are in denominations of 5, 10, 20, 50 and 100 dollars. Canadian coins are issued in denominations of 1, 5, 10, 25 cents, as well as 1 dollar (“loonie”) and 2 dollars (“tooney”).
Canada is one of the leading industrialized countries of the West. As of the third quarter of 2008, Canada's GDP was CAD 1,639.5 billion. dollars (in 2007 - 1537.6 billion Canadian dollars), 1304 billion dollars, GDP growth - 0.3% (in 2007 - 2.7%), state budget surplus - 0.8 billion can. dollars (in 2007 – 9.6 billion Canadian dollars).
Unemployment rate (as of December 2008) – 6.6% (in 2007 – 5.9%), inflation (as of November 2008) – 2.0% (in 2007 – 2 .2%).
The automotive industry, as well as the developed production of machinery and equipment (construction, mining, agricultural) make a major contribution to the economy. The Canadian economy has a pronounced export orientation, the share of exports in GDP in 2008 was 34.6%. The trade balance is positive – CAD 37.5 billion. dollars Balance of payments – 25.1 billion kan. Doll.
In 2008, 78.3% of merchandise exports came from the United States. Exports to the UK, Japan, China and Mexico were 2.6%, 2.2%, 2.2% and 1.2% respectively. Canada imports goods from the US (52.7%), China (9.4%), Mexico (3.8%), Japan (3.5%) and the UK (2.8%). Russia's share in Canada's foreign trade is insignificant.
The volume of accumulated foreign direct investment in the Canadian economy in 2008 amounted to 516.3 billion Canadian dollars. dollars, and Canadian direct investment abroad - 555.0 billion can. dollars (in 2007 – 500.9 and 514.5 billion Canadian dollars, respectively).
In the foreign economic sphere, the priority remains the line of comprehensive trade liberalization and active participation in international and regional integration associations.
One of the impetuses to achieve the current state were the reforms of the mid-1980s. The result of reforms in the Canadian economy was its overall recovery and significant improvement in public finances. The main achievements of neoconservative and liberal reformers are as follows:
· denationalization of the economy, large-scale privatization and liberalization of the most important sectors of the mining industry and infrastructure (the role of the state in the Canadian economy was large before, almost all key sectors were under state control (mining industry, infrastructure;
· deregulation, elimination of direct subsidies in agriculture and in transport;
Canada's trade relations with the United States
Canada is the largest trading partner of the United States. Daily trade between the two countries exceeds C$1.4 billion. By comparison, US trade with all Latin American countries combined exceeded this value in 1999. The value of US exports to Canada exceeds the value of US exports to the European Union. The trade that takes place on the Ambassador Bridge between Windsor, Ontario, and Detroit, Michigan, alone is worth all of America's exports to Japan. Canada's importance to the United States lies not only in Canada's proximity to American borders, but it is also the main international consumer of products from 35 of the 50 American states.
Bilateral trade increased by about 50% from 1989, when the FTA came into effect, to 1994, when NAFTA, which replaced the 1989 treaty, came into effect. Since then, international trade has increased by about 40%. NAFTA gradually reduced existing barriers between member countries (Canada, the United States and Mexico) and loosened rules in various industries such as agriculture, services, electricity, financial services and investment. NAFTA is the world's largest free trade area, inhabited by 440 million people.
The most important component of American trade with Canada is the automotive sector. Since 1965, during the validity of the Canada-United States Automotive Agreement, which removed all customs barriers to trade in cars, trucks and their components between the two countries, bilateral trade in automobile industry goods has grown from $715 million in 1964 to $104.1 billion dollars in 1999. The provisions of this agreement were included in the agreements of 1989 and 1994. However, since 2007, a decline in automobile production caused by global competition and rising oil prices has led to a decrease in the volume of this trade.
The United States is Canada's largest agricultural commodity market. A third of all Canadian food products are exported to the United States. In turn, Canada is the second largest sales market for the United States. First of all, Canada imports American fruits and plant products. Approximately two-thirds of all products made from wood and its derivatives, such as cellulose, are exported to the United States.
In 2000, total energy trade between Canada and the United States was $21 billion. The main components of this trade were oil, natural gas and electricity. Canada is the world's largest oil supplier to the United States. About 16% of the oil and 14% of natural gas used in the United States comes from Canada.
While 95% of bilateral trade between Canada and the US poses no significant problem, both countries dispute over the remaining 5%, especially in the agricultural and cultural sectors. In general, these problems have been resolved either through bilateral deliberative forums or through complaints to the WTO or NAFTA's dispute resolution department. In May 1999, the American and Canadian governments entered into a performance agreement that would guarantee greater access to the Canadian market to a portion of US productions. By mutual agreement, both countries filed a complaint with the international court over the Gulf of Maine dispute and both agreed with the court decision on October 12, 1984. Today, one of the problems in trade relations between Canada and the United States concerns Canadian-American timber: Americans believe that Canada unreasonably subsidizes its forestry industry.
In 1990, the United States and Canada signed the Fisheries Enforcement Agreement, a treaty designed to discourage or at least minimize illegal fishing in American and Canadian waters.
During the American President's visit to Canada in February 1995, Canada and the United States signed an aviation agreement aimed at significantly increasing air travel between the two countries. The two countries also shared operations on the St. Lawrence River Sea Canal, which connects the Great Lakes to the Atlantic Ocean.
The US is Canada's largest trade investor. At the end of 1999, the value of US direct investment in Canada was valued at $116 billion, or 72% of foreign investment in Canada. American investments are directed primarily to the metallurgical and mining industries, the petrochemical industry, the production of machinery and transport equipment, as well as financial transactions. At the same time, Canada ranks third among US foreign investors. The value of Canadian direct investments in the United States at the end of 1999 was valued at $90.4 billion. Canadian investment in the United States is focused primarily on manufacturing, wholesale trade, real estate, oil, and financial and insurance activities.
In 2014, changes occurred in the Canadian economy that made possible the emergence of new trends in the real estate market:
- The depreciation of the Canadian dollar is attracting real estate buyers from abroad: real estate agents are already noticing an increase in interest in Canadian real estate in certain regions from foreigners.
- The main indicators - price growth and the number of transactions - in 2015 will become a record for the post-crisis period.
- The reduction in the Bank of Canada discount rate contributes to the growth of mortgage lending.
- The pace of construction of new housing does not yet correspond to existing demand, which means that the relative shortage of real estate will contribute to rising prices.
Price dynamics
At the end of the second quarter of 2015, the market inspired analysts from the largest Canadian real estate agency, Royal LePage, to make bold forecasts of record sales of apartments and houses in Canada.
In the first half of 2015, one-story single-family houses rose in price the most (7.5%) compared to the same period in 2014. A more modest price increase was shown by the segment of two-story residential buildings (6.8%). Apartments went up in price by only 3.9%.
The average cost of one housing unit (individual living space - room, apartment, house, townhouse - sufficient for one household/family) in June 2015 was 349 thousand US dollars (or 453,560 Canadian dollars) compared to 319.4 thousand . US dollars in 2014.
The largest contributions to the rise in prices across the country as a whole were made by Canada's largest cities - Toronto and Vancouver. In the second quarter of 2015 in Toronto, one-story single-family homes rose in price by 12.9%, and two-story cottages by 11.6%. Apartment prices increased by 5% compared to the first half of 2014.
In Vancouver, houses increased in price even more noticeably: one-story cottages rose in price by 12.6%, and two-story cottages by 13.6%. Apartments became more expensive by 6%.
According to Royal LePage analysts, the leaders in price increases in 2015 will be the aforementioned Toronto and Vancouver. Real estate in these cities will increase in price by 9.6% and 9.4%, respectively.
If the Royal LePage agency predicts a price increase in 2015 of 6.1%, then the Royal Bank of Canada gives a more restrained forecast - 3.8% in 2015, and 1.6% in 2016.
“The steady increase in home prices that we observed in the second quarter of 2015, especially in Toronto and Vancouver, is due to two factors - a strengthening labor market and, as a result, rising incomes, as well as a housing shortage,” says Phil Soper. Soper, executive director of Royal LePage.
This trend is especially characteristic of Toronto and Hamilton (located 70 km from Toronto in the province of Ontario near the US border), where full employment is growing and people are more confident about the future, while banks maintain fairly low lending rates. Phil Soper also noted that market participants expect further reductions in interest rates, which will spur growth in demand and real estate prices.
Sales are growing
The situation with the volume of real estate sales in the first half of the year is not as clear as with the rise in prices, and here market analysts differ in their estimates.
According to the Canadian Real Estate Association (CREA), in the first half of 2015, the number of real estate transactions increased by 5.9% compared to the same period in 2014 and by the end of the second quarter reached a record high of 513 thousand. according to CREA estimates, in 2015 sales growth will be 5.2% compared to 2014; the average annual number of transactions in 2014 was 479 thousand.
The largest sales growth in 2015 is expected in Vancouver (27.6%), Toronto (7.2%), Montreal (5.4%) and Ottawa (4.3%).
Other analysts are less optimistic, with Royal LePage predicting a 3.3% increase in transactions and Royal Bank of Canada only 1.5% above 2014 levels.
One way or another, all market analysts agree that real estate sales will grow in 2015, but it is too early to make a long-term forecast given the uncertainty in the Canadian economy.
Stability in the rental market
According to the Canada Mortgage and Housing Corporation (CMHC), the rental market remains stable, as evidenced by a statistically insignificant change in the vacancy rate in Canada: in the first half of 2015 it was 2.9% versus 2.7% in first half of 2014.
Regional rental markets in Canada exhibit varying vacancy rates. Rental demand has fallen in oil-dependent provinces due to lower hydrocarbon prices. The highest rates of unclaimed rentals are in Alberta and Saskatchewan (4.6 and 4.8%, respectively).
The vacancy rate has also increased in the province of Quebec. The reason for this is a reduction in population migration, a slowdown in employment growth and an increase in supply in the rental market. If in the spring of 2014 the share of unclaimed rental space was 1.8%, then in 2015 it reached 3.2%.
The share of empty space in Ontario and British Columbia, which offers great employment opportunities for young people - the main “consumer” of rentals, has remained virtually unchanged or decreased compared to 2014. For example, in Vancouver this figure in the first half of 2014 was 1.4%, when a year ago it was 1.9%.
Vancouver is also the city with the most expensive rent in Canada. In April 2015, a two-bedroom apartment in this city cost renters an average of $1,035 ($1,345 CAD). The lowest average rental price was recorded in the city of Trois-Rivières in the province of Quebec. The same apartment can be rented here for US$439 (CAD$571).
CMHC cautiously assesses the prospects for growth of the rental market against the backdrop of multidirectional trends in the Canadian economy and the uneven economic potential of the regions.
Mortgage rates drop to rock bottom levels
The rapid fall in oil prices in the second half of 2014 could not but affect the Canadian economy, and at the beginning of 2015 the Bank of Canada decided to reduce the interest rate. For the first time since 2010, the interest rate dropped from 1.00% to 0.75% in January and then to 0.50% in July.
The reduction in the discount rate caused a chain reaction in the banking sector: the five largest banks in Canada reduced their base lending rates (by an average of 0.10 - 0.15%), after which it was the turn of mortgages.
Currently, the average five-year mortgage rate in Canada is 2.59%, up from 4.79% in December 2014.
However, it is not only the Bank of Canada discount rate that affects the mortgage market: the regulator’s discount rate has a direct impact on short-term mortgage rates, but long-term mortgages are influenced by the yields of the securities and government bond markets.
One of the consequences of the lower interest rate and the “oil shock” was the depreciation of the national currency against the US dollar. In December 2014, 1 Canadian dollar was worth 0.86 US dollars, and in July 2015 it fell to 0.76.
The weakening Canadian currency promises additional benefits for foreign buyers of real estate in Canada. Real estate agents in Vancouver are seeing increased interest in the local market from Americans and Chinese.
Construction pace
CMHC predicts a decline in new residential construction projects in 2015. According to CMHC analysts, construction of 181 thousand housing units will begin in 2015, which is 4.1% less than in 2014, when construction began on 189 thousand units. In the first quarter of 2015, the number of new construction projects fell by 4.7%.
At the same time, according to Canada's National Statistical Agency, in the first quarter of 2015, investment in residential real estate construction increased by 8.8% compared to the same period in 2014.
This significant increase in investment will bear fruit in the third and fourth quarters of 2015, when, according to CMHC forecasts, the number of new buildings will increase by 3.3 and 3.1%, respectively, compared to the first and second quarters of 2015.
Analysts agree that housing construction in Canada will decline in 2015 due to the unfavorable economic situation, and in 2016 it will remain almost unchanged and remain at the level of 181 thousand units per year. Together with lower mortgage rates, this will spur demand for housing, which means prices will continue to rise.
At the same time, Joe Oliver, Canada's Minister of Finance, said that there is no threat of a “bubble” in the real estate market.
Economic forecast
Five key factors will continue to influence the Canadian real estate market in the coming years:
- Mortgage rates. The Bank of Canada's rate cut in 2015 contributed to a reduction in already low mortgage rates. Cheap mortgages are fueling demand for housing, but its fate will depend on further decisions of the Canadian regulator.
- Busy. Despite the headwinds in the energy market, Canada's diversified economy remains well positioned for employment growth, especially as the US economy improves. It is expected that unemployment in Canada at the end of 2015 will decrease and amount to 6.7% compared to 2014, when it reached 7.1%. Employment is also expected to grow by 1.3% in 2015, and in 2016 - 1.9%.
- Migration. In 2015, Canada will welcome between 260 and 285 thousand new permanent residents, which will support the growth of the real estate market.
- Demography. The share of the 25-34 year old age group (potential property buyers) is expected to increase, as well as the overall aging of the population. The demographic situation may change the structure of demand in the Canadian real estate market: the decline in the share of young people is a potential threat to the rental market, and the growth in the number of retirees may spur demand for housing outside the city or in resort areas
- Real estate offer. Demand for real estate in Canada continues to outpace completed and unclaimed housing units, but the gap has been narrowing since May 2013. Continued relative deficits will support rising house prices.
As a result
2015 has every chance of becoming the most successful year for the Canadian real estate market in the post-crisis period. The main market parameters - price dynamics, the number of transactions, the level of mortgage rates and the pace of construction - remain favorable, even despite the problems in the Canadian economy as a whole.
At the same time, the Canadian economy has sufficient potential to overcome difficulties in the oil industry, and factors such as rising employment, falling unemployment and a stable flow of immigrants promise stable demand for real estate.
Ivan Chepizhko, "Tranio"