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• Overview: 
As an affluent, high-tech industrial society, Canada today closely resembles the US in per capita output, market-oriented economic system, and pattern of production. Since World War II the impressive growth of the manufacturing, mining, and service sectors has transformed the nation from a largely rural economy into one primarily industrial and urban. In the 1980s, Canada registered one of the highest rates of real growth among the OECD nations, averaging about 3.2%. With its great natural resources, skilled labor force, and modern capital plant, Canada has excellent economic prospects, although the country still faces high unemployment and a growing debt. Moreover, the continuing constitutional impasse between English- and French-speaking areas has observers discussing a possible split in the confederation; foreign investors have become edgy. 

Canada and the U.S. serve as the largest market for each other's goods. Bilateral trade increased by about 50% between
1989, when the U.S.-Canada Free Trade Agreement (FTA) went into effect, and 1994, when the North American Free
Trade Agreement (NAFTA) superseded it. Trade has since increased by 40%. NAFTA continues the FTA's moves
toward reducing trade barriers and establishing agreed upon trade rules. It also resolves some long-standing bilateral
irritants and liberalizes rules in several areas, including agriculture, services, energy, financial services, investment, and
government procurement. NAFTA forms the largest trading area in the world, embracing the 380 million people of the
three North American countries.

Almost one-third of U.S.-Canadian trade is in the automotive sector. Under the 1965 U.S.-Canada Automotive
Agreement (Auto Pact), which provided for free trade in cars, trucks, and auto parts, two-way trade in automotive
products rose from $715 million in 1964 to $104.6 billion in 1996. Auto Pact benefits are incorporated into NAFTA.

The U.S. is Canada's leading agricultural market, taking nearly one-third of all food exports. Conversely, Canada is the
second-largest U.S. agricultural market (after Japan), primarily importing fresh fruits and vegetables and livestock
products. Nearly two-thirds of Canada's forest products, including pulp and paper, are exported to the United States;
almost 75% of Canada's total newsprint production is also exported to the U.S.

The United States imports more than 2 trillion cubic feet, or 12% of its natural gas requirements, from Canada. Canada is
the largest energy supplier to the U.S.

While 95% of U.S.-Canada trade flows smoothly, there are occasionally bilateral trade disputes over the remaining 5%,
particularly in the agricultural and cultural fields. Usually, however, these issues are resolved through bilateral consultative
forums or referral to WTO or NAFTA dispute resolution.

The United States and Canada also have resolved several major issues involving fisheries. By common agreement, the
two countries submitted a Gulf of Maine boundary dispute to the International Court of Justice in 1981; both accepted the
Court's October 12, 1984 ruling which demarcated the territorial sea boundary. In 1990, the United States and Canada
signed a bilateral Fisheries Enforcement Agreement, which has served to deter illegal fishing activity and reduce the risk of
injury during fisheries enforcement incidents. Their success in achieving a Pacific Salmon Treaty in 1985 has been
tempered by difficulties in negotiating multi-year extensions of its constituent fisheries regimes.

Canada and the United States signed an aviation agreement during President Clinton's visit to Canada in February 1995,
and air traffic between the two countries has increased dramatically as a result. The two countries also share in operation
of the St. Lawrence Seaway, connecting the Great Lakes to the Atlantic Ocean.

The U.S. is Canada's largest foreign investor; at the end of 1996, the stock of U.S. direct investment was estimated at
$87.6 billion, or about 71% of total foreign direct investment in Canada. U.S. investment is primarily in Canada's mining
and smelting industries, petroleum, chemicals, the manufacture of machinery and transportation equipment, and finance.

Canada's investment in the United States is substantial. At the end of 1996, the stock of Canadian direct investment in the
United States was estimated at $60 billion. Canadian investment in the United States, which includes investment from
Canadian holding companies in the Netherlands, is concentrated in manufacturing; wholesale trade; real estate; and
petroleum, finance, and insurance and other services.

 
• National product: 
GDP - purchasing power parity - $585.1 billion (1997 est.) 
 
• National product real growth rate: 
1.5% (1997) 
 
• National product per capita: 
$19,621 (1997) 
 
• Inflation rate (consumer prices): 
0.2% (1997) 
 
• Unemployment rate: 
9.6% (1997) 
 
• Exports: 
$164.3 billion (f.o.b., 1997 est.) 
 
commodities: 
newsprint, wood pulp, timber, crude petroleum, machinery, natural gas, aluminum, motor vehicles and parts; telecommunications equipment 
 
partners: 
US, Japan, UK, Germany, South Korea, Netherlands, China 
 
• Imports: 
$151.5 billion (c.i.f., 1997 est.) 
 
commodities: 
crude oil, chemicals, motor vehicles and parts, durable consumer goods, electronic computers; telecommunications equipment and parts 
 
partners: 
US, Japan, UK, Germany, France, Mexico, Taiwan, South Korea 
 
• Industrial production: 
growth rate 4.8% (1993) 
 
• Electricity: 
 
capacity: 
108,090,000 kW 
 
production: 
511 billion kWh 
 
consumption per capita: 
16,133 kWh (1993) 
 
• Industries: 
processed and unprocessed minerals, food products, wood and paper products, transportation equipment, chemicals, fish products, petroleum and natural gas 
 
• Agriculture: 
accounts for about 3% of GDP; one of the world's major producers and exporters of grain (wheat and barley); key source of US agricultural imports; large forest resources cover 35% of total land area; commercial fisheries provide annual catch of 1.5 million metric tons, of which 75% is exported 
 
• Illicit drugs: 
illicit producer of cannabis for the domestic drug market; use of hydroponics technology permits growers to plant large quantities of high-quality marijuana indoors; growing role as a transit point for heroin and cocaine entering the US market 
 
• Economic aid: 
 
donor: 
ODA and OOF commitments (1970-89), $7.2 billion 
 
• Currency: 
1 Canadian dollar (Can$) = 100 cents 
 
• Exchange rates: 
Canadian dollars (Can$) per US$1 - 1.4129 (January 1995), 1.3656 (1994), 1.2901 (1993), 1.2087 (1992), 1.1457 (1991), 1.1668 (1990) 
 
• Fiscal year: 
1 April - 31 March