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This article provides information about the historical background of economy of Canada:
The world’s second largest country, Canada, consists of an extremely wide variety of geographical features ranging from the magnificent Rocky Mountains, the warm blue Pacific Ocean on the West Coast, to beautiful lakes and the magnificent Niagara Falls in Central Canada.
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Moreover, Canada is the largest country in the Western Hemisphere, with a total area of 9,970,610 sq. km and the world’s longest coastline extending over 244,000 km as well. Canada’s economy is not only one of the soundest in the world but has been ranked the number one country in the world for several years.
The United Nations has ranked Canada as the best country in the world to live in. The survey compared a total of 174 countries, using 200 performance indictors including access to education, quality health care, a low incidence of crime in Canadian cities, and a clean environment.
Canada ranks fourth in the world as per human development index, behind only to Norway, Sweden and Australia, Canada, the eighth largest trading nation in the world, with its relatively low levels of inflation, is not only an active foreign investor on the global front, but also receives a high degree of foreign investment from all over the world. Canada, with its population of 31.4 million (in 2002), was formed from a confederation of 10 provinces and two territories in 1867.
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At present, Canada has 10 provinces and 3 territories, each with its own capital city. Here a brief background of Canada and major economic activities of different regions of Canada has been presented. It looks into the economic history of Canada, which shows a clear shift in the economic approaches of Canada and her commitment for regional unity in trade affairs. Even while Canada showed trade openness there had been attempts in the country from certain quarters for an economic nationalism.
Although the Canada is a single economic unit, the economic background of Canada can be viewed by the different regions of Canada.
Initially, most of the native people were hunters and food-gatherers, and agriculture was practiced by a very small number of Iroquoian groups. There was no specialised merchant class but trading was common. Due to the arrival of French and British traders in the 16th century, a great deal of economic and cultural changes occurred among the native people. Much of central Canada’s industry, including the country’s two great industries, milling and lumbering, was dispersed through the countryside or in small villages even in 1871 and afterwards, due to rapid industrialisation and urbanisation. By 1911 half of Ontario’s population lived in cities and towns.
In addition to fur trading, sea fisheries brought about major economic development in the Atlantic region. But the 1920s and 1930s were unhappy decades when the iron, steel, coal and machinery industries were in chronic difficulty and, like the fishery they suffered in the Great Depression. Nor did new manufacturers make much headway, in spite of continuing federal subsidies for rail transport. The few rays of hope included new pulp and paper plants and new protected markets for apples and lumber in Britain. World War II brought hectic prosperity to those communities, which served the naval and air bases, and after 1945 the situation improved.
Fur trade was the beginning of economic development in Western Canada. In the late 1890s, the prospects for development brightened as world prices rose, transport costs fell, methods of dry land farming improved, and more appropriate varieties of wheat became available. Until 1929 the Prairie Provinces enjoyed an immense expansion of the wheat economy, onto which was grafted, before 1914, a very much larger rail system, a network of cities and towns, coal mining and ranching.
By 1914 the frontier of settlement had been pushed well towards the northwest, attracting migrants from many foreign lands. The result was a regional economy, which depended almost entirely upon the world price of a single crop and on local yields, both of which fluctuated greatly.
With new projects in oil, gas pipeline-building and potash, the year after 1945 saw resource-based development, rapid urbanisation and dramatic increases in standard of living. New markets in the erstwhile USSR, China and in developing nations for wheat opened up new horizons. The western provinces remained heavily dependent on the export of a few primary products and on the investment activity, which the primary industries could generate.
The West remained “development-minded”, as it had been between 1896 and 1914. Most of the Canadians were doing white collar jobs and staying in cities by 1980. There were less disparities in income and standard of living. But the economies of the various regions were quite different ranging from manufacturing to generation of surpluses of national products. During this period, despite all this development, in the Atlantic province, living standards were comparatively low.