Canada exerts considerable influence over world economics and politicscomment (0)
February 5, 2009
By Martine G. Bates
As the second largest country by land mass — second only to Russia — Canada has a surprisingly small population. Ranking 36th among world nations in population, Canada comes in between Algeria and Morocco. Even with its relatively small population, Canada is considered one of the world’s most powerful countries, its development as a nation mirroring that of the United States in many respects. About 30 percent of the country’s 33.5 million people live in the four provinces of western Canada, with just over 4 million living in British Columbia.
The United States’ closest neighbor today in trade and defense, Canada was more closely aligned with Great Britain in 1776 instead of supporting the American Revolution. Today, the U.S. Department of State describes Canada as a “constitutional monarchy with a federal system, a parliamentary government and strong democratic traditions,” independent as a nation while still recognizing Queen Elizabeth II as the head of state.
The eastern provinces of Ontario, Quebec, Nova Scotia and New Brunswick first joined to become the Canadian Confederation in 1867. Manitoba became a province in 1870, followed by British Columbia in 1871. In 1905, Alberta and Saskatchewan joined the confederation. Today, Canada has 10 provinces and three territories.
A member of the G-8, Canada is considered an economic and political powerhouse. Among world powers, Canada is in the top 10 in exports, gross domestic product and contributions to the United Nations. It is currently ranked second in oil reserves.
Canada’s economic system and living standards are strikingly similar to the United States. The US-Canada Free Trade Agreement (FTA), passed in 1989, and the 1994 North American Free Trade Agreement (NAFTA) dramatically increased trade and economic integration between the United States and Canada.
In 2007, Canada had good economic growth, moderate inflation and the lowest unemployment rates in more than 30 years, but like the rest of the world, Canada suffered a downturn in 2008 and is now facing serious economic issues that closely parallel those of the United States.
In recent months, Canadians, like their southern neighbors, have faced drops in housing sales and prices, huge stock market losses, and the possible failure of industries, including the auto industry. The Canadian parliament recently approved an almost $4 billion bailout package to its auto makers to stave off the possibility of failure.
In December, Prime Minister Stephen Harper acknowledged the seriousness of the economic problem when he told a Canadian television station, “The truth is, I’ve never seen such uncertainty in terms of looking forward to the future. I’m very worried about the Canadian economy.”
While western Canada has had a stronger economy in recent years than the rest of the country, the region is feeling the impact of the worldwide economic slowdown. Dropping oil prices and a slump in timber sales have hurt the economy of the region, but demand for natural resources and agricultural products remains strong.
Environmental issues also plague Canada. Although the nation signed the Kyoto Accord, a worldwide plan to reduce greenhouse emissions, Prime Minister Harper has indicated that his administration would not abide by the agreement because of the economic hardship it would impose on the nation, especially since President Bush withdrew the United States from the agreement soon after taking office in 2001.
The Northwest Passage dispute heats up as its ice melts. Once nearly impassable because of polar ice, the Northwest Passage is becoming an international issue because of the increasing traffic through the passage, which saves days over alternate shipping routes. Canadians believe the passage to be part of their territory, but the United States and other nations consider it a strait and therefore open to international navigation.
At a NAFTA summit in Canada in 2007, the leaders of the United States and Canada affirmed their “agree-to-disagree” stance on the topic. In February of 2008, a group of experts from the two nations held model negotiations and issued a proposal recommending that a bi-national body be created to manage the waters. At press time, the proposal had not been acted upon.