International business is a term used to collectively describe all commercial transactions

(private and governmental, sales, investments, logistics and transportation) that take place
between two or more nations. Usually, private companies undertake such transactions for profit;
governments undertake them for profit and for political reasons. It refers to all those business
activities which involves cross border transactions of goods, services, resources between two or
more nations. Transaction of economic resources include capital, skills, people etc. for
international production of physical goods and services such as finance, banking, insurance,
construction etc
A multinational enterprise (MNE) is a company that has a worldwide approach to markets and
production or one with operations in more than a country. An MNE is often called multinational
corporation (MNC) or transnational company (TNC). Well known MNCs include food
companies such as McDonald's and Yum Brands, vehicle manufacturers such as General Motors
and Toyota, consumer electronics companies like Samsung, LG and Sony, and energy companies
such as ExxonMobil, Shell and BP. Most of the largest corporations operate in multiple national
markets.
Areas of study within this topic include differences in legal systems, political
systems, economic policy, language, Accounting standards, labor standards , living
standards, environmental standards, local culture, corporate culture, foreign exchange
market, tariffs, import and export regulations, trade agreements, climate, education and
many more topics. Each of these factors requires significant changes in how
individual business units operate from one country to the next.
The conduct of international operations depends on companies' objectives and the means with
which they carry them out. The operations affect and are affected by the physical and societal
factors and the competitive environment.
Operations
 Objectives: sales expansion, resource acquisition, risk minimization
Means
 Modes: importing and exporting, tourism and transportation, licensing and franchising,
turnkey operations, management contracts, direct investment and portfolio investments.
 Functions: marketing, global manufacturing and supply chain
management, accounting, finance, human resources
  Overlaying alternatives: choice of countries, organization and control mechanisms
Physical and societal factors
 Political policies and legal practices
 Cultural factors
 Economic forces
 Geographical influences
Competitive factors
 Major advantage in price, marketing, innovation, or other factors.
 Number and comparative capabilities of competitors
 Competitive differences by country
There has been growth in globalization in recent decades due to the following eight factors:
 Technology is expanding, especially in transportation and communications.
 Governments are removing international business restrictions.
 Institutions provide services to ease the conduct of international business.
 Consumers know about and want foreign goods and services.
 Competition has become more global.
 Political relationships have improved among some major economic powers.
 Countries cooperate more on transnational issues.
 Cross-national cooperation and agreements.
Studying international business is important because:
 Most companies are either international or compete with international companies.
 Modes of operation may differ from those used domestically.
 The best way of conducting business may differ by country.
 An understanding helps you make better career decisions.
 An understanding helps you decide what governmental policies to support.
Managers in international business must understand social science disciplines and how they
affect all functional business fields.
Introduction to International business in respect to Canada

Business Environment Advantage

World-class Performer
Canada understands the importance of its business community and has created an environment to
encourage its success. Name an international study and, odds are, Canada ranks as the top choice
for its many competitive advantages.
Canada leads all G7 countries in ease of doing business, according to the 2009 IMD World
Competitiveness Yearbook. Also, the Economic Intelligence Unit forecasts Canada as the #1
place to do business in the G7 for the next five years.
Nexus for International Business Opportunities
U.S.: Canada is America's largest trading partner.
Europe: European markets provide tremendous trade opportunities for Canada. Some of the
most important exports to the European Union are chemicals, machinery, transport equipment,
computer electronics products and minerals.

Asia: A maritime nation, Canada has exceptional access to Asia-Pacific markets. With its
advantageous geographical location, strong immigration links and membership in APEC that
reduces trade barriers, Canada is well positioned to capitalize on the long-term growth potential
of Asian economies. To maximize its strategic access and enhance its competitive position,
Canada has invested over $1billion into the Asia-Pacific Gateway and Corridor Initiative to
support stronger infrastructure links among Canada, NAFTA and Asia-Pacific markets.
Magnet for the Best and the Brightest
Canada is world renowned for its beauty and abundance of natural resources, but it is
increasingly recognized for its brainpower. Canada has invested billions of dollars over the last
decade to create a robust research and development (R&D) climate that is second to none.
Canada ranks second behind the U.S. among the G7 and fourth in a 134-country review of the
quality of scientific research undertaken in government and university laboratories. The
Canadian Foundation for Innovation funds technology clusters across the country in domains
ranging from pharmaceuticals to fuel cells to information and communications technologies.
Among Leaders in IT Industry Competitiveness
Canada ranks fourth in a 66-country review of the countries best suited to provide an optimally
competitive environment for information technology (IT) firms.
• The U.S. and Canadian telecommunications and automobile industries are virtually
integrated across the Canada-U.S. border.
• Cutting-edge American producers recognize Canadian leadership in industries such as
fibre optics, aerospace and biopharmaceuticals.

Economic Advantage
Extraordinary Record
"Canada is better placed than many countries to weather the global financial turbulence and
worldwide recession. Its resilience can be attributed to three factors: First, a track record of
sound macroeconomic policy management has left the country in prime form at the beginning of
the global turmoil …Second, the authorities responded proactively to the crisis …Third, the
focus on financial stability. "
Charles Kramer, Division Chief, Western Hemisphere Department, International Monetary Fund.
March 2009
Take Canada’s prudent fiscal policy, low inflation, interest and unemployment rates, and a
corporate tax framework that is among the best in the world. Factor in Canada’s status as an
emerging energy superpower, the only stable and growing producer of this scarce commodity.
Add to that the country’s strategic investments in technology, education and healthcare. The
result is perfectly ideal conditions for businesses to grow and prosper.
According to Dun & Bradstreet’s Global Risk Indicator, Canada is considered one of the world’s
safest countries to invest, due to the relatively mild slowdown experienced as a result of the
global credit crisis. In addition, the Canadian Business’ Prosperity Potential Index (October
2009) ranks Canada first in the G7 for the likelihood of a strong and healthy economy in the year
2020.
AAA credit rating: In response to Canada’s improved fiscal balance sheet and excellent long-
term growth prospects, the country has enjoyed a AAA international credit rating
In the mid-1990s, Canada’s total net debt-to-GDP ratio was the second highest in the G7. Today,
it is the lowest. The Economic Intelligence Unit projects Canada’s inflation rate of 2.1% to
remain the same for the next five years, compared to 3.2% for the U.S.
Banks You Can Bank On
The global economic crisis may be deepening, but Canadian financial institutions remain
resilient. For the second year in a row, the World Economic Forum’s Global Competitiveness
Report has found that Canada has the soundest banking system in the world. Canada's well-
regulated financial institutions, banks, trust companies, cooperatives, insurance companies and
stock exchanges, have demonstrated stability and competitiveness that has made their services
popular around the world. The financial sector has become one of Canada's major export earners
since the worldwide liberalization of financial regulations. Canada’s other financial institutions
are equally impressive, offering investment opportunities that are both lucrative and safe.
Support When You Need It
Canada's Export Development Corporation (EDC) provides trade finance and risk management
services to Canadian exporters and foreign investors.

Tax Advantage
Incentives for Industry
The World Trade Magazine has ranked Canada in the Top 3 for Investment and Trade
Opportunities, and with good reason.
Canada offers businesses low tax rates. Today, Canada has the lowest payroll taxes among the
G7 countries and by 2012 Canada's corporate income tax rate will fall from 18 percent in
2010 to 15 percent in 2012 - less than half of the U.S. rate.
Canada's combined federal and provincial-territorial statutory coporate tax rate decline
from 31.3% in 2009 to 30.8% in 2010. It is on track to drop to 27.2% by 2012.
By 2012, Canada will also have a statutory corporate tax rate advantage over the United States of
almost 12 percentage points.
Canada Provides Unsurpassed Tariff and Foreign Trade Zone Advantages
Canada has taken important steps in providing new trade advantages for investors. It is
eliminating tariffs on manufacturing imports and is offering many complementary benefits found
in foreign trade zones around the world but with a key difference: Canada’s general duty and tax
relief is geographically flexible. It can be enjoyed anywhere in the country.
Canada’s approach is superior to efforts by other countries that focus on location-specific foreign
trade zones. Canada is the first G20 country to implement such an approach. This makes Canada
a destination of choice for foreign investment.
Canada - a Tariff-Free Zone for Industrial Manufacturers
Canada, as a nation whose prosperity is greatly dependent on trade, understands the importance
of open markets for international investors. Free trade is an important source of competitive
strength for international businesses operating from Canada and those investing in Canada. For
this reason, Canada has taken steps to provide new trade advantages to investors. Canada is
eliminating tariffs on imported manufacturing machinery and equipment and related industrial
inputs.
Investors considering Canada as their new investment destination now have the advantage of
importing advanced machinery and equipment from their parent companies free of import duties.
In 2010, tariffs were liberalized on an additional $5 billion in imports in varied areas such as
textiles, chemicals, base metals, etc., providing $300 million in annual duty savings for
manufacturers, net of savings on tariff compliance and administration. By 2015 all duties on
manufacturing machinery and equipment and industrial inputs will have been removed.
Benefits for Investors
The duty-free treatment of manufacturing or processing equipment reduces costs and increases
profitability of investors’ global operations. By reducing the cost of importing key factors of
production, the elimination of tariffs encourages innovation and allows businesses to enhance
their stock of capital equipment. This is particularly important to small and medium-sized
foreign investors who choose Canada as a place to invest and as a base from which to operate
and export.
The elimination of tariffs will reduce customs compliance costs, simplify the tariff structure and
eliminate the administrative burden of complying with rules of origin and duty drawback
regulations. This makes Canada a tariff-free zone for industrial manufacturers and a more
attractive place for investors.
Key Benefits
• Complements Canada’s business tax advantage and stable financial sector
• Lowers costs of production to increase business competitiveness at home and abroad
• Makes productivity-enhancing advanced machinery and equipment purchases more
affordable
• Takes away the need of applying for duty drawback (refund) by manufacturers
• Simplifies tariff structure
• Reduces overall tariff compliance cost and administrative burden
Strengthening Canada as a Foreign Trade Zone
There are important complementary programs that - together with tariff elimination - greatly
enhance the appeal of Canada as a unique Foreign Trade Zone (FTZ). These programs, available
across Canada, offer many of the benefits found only in locally-oriented ForeignTrade Zones
(e.g., in the United States). Thus, Canada’s FTZtype programs offer investors the vitally
important advantage of geographic flexibility.
Canada’s programs do not restrict investors to a handful of locations that may be distant from
their best markets or may have inadequate infrastructure and poor logistics. In effect, programs
such as the Duty Deferral Program, the Export Distribution Centre Program and Exporters of
Processing Services Program make it possible to create an FTZ environment exactly where the
business needs it, while offering all the benefits of a traditional FTZ.
A Duty Deferral Program (DDP)
DDP is administered by the Canadian Border Services Agency (CBSA). This is Canada’s main
FTZ-type program. The program covers three components: upfront duties relief, drawback or
repayment by government of import duties (when the imported goods are re-exported or used in
the manufacture of exported goods) and the deferral of duties for up to four years through the
Customs Bonded Warehouse Program (CBW).
The DDP can postpone or refund duties and taxes investors would otherwise have to pay on
goods they import and that are subsequently exported. For example, in 2009, there were 2,000
companies earning $250 million dollars in duty refund benefits. To round it up, the CBW
program offers importers an effective storage option. It allows for the deferring of all import
levies, including the GST and HST, and for taking advantage of just-in-time inventory practices.
Unlike in local foreign trade zones, there are no geographic restrictions. The business benefits
are straightforward: lower duty costs, help increase cash flow, free up working capital, and
permit more competitively priced goods. Taking advantage of the DDP also makes it easier to
attract new investment and to partner with other companies.
DDP and NAFTA
The North American Free Trade Agreement (NAFTA) can limit the benefits from the duties
relief and drawback programs with respect to non-originating goods — that is, goods which do
not originate in the United States, Canada or Mexico but are used as materials for manufacturing
Canadian products that are subsequently exported to a NAFTA partner.
The Export Distribution Centre Program (EDCP)
The EDCP is administered by the Canada Revenue Agency (CRA). The program is intended to
benefit businesses that import goods and/or acquire goods in Canada, process them to add
limited value and then export them. The “limited value” criterion is a key factor here, since the
EDCP is not intended to benefit companies that manufacture or produce new products for export.
The program is therefore of particular value to businesses involved in the processing of goods
such as distributing, disassembling, reassembling, etc. Under the program, investors do not pay
federal Goods and Services Tax (GST) or a Harmonized Sales Tax (HST) in those provinces that
have harmonized their retail sales taxes with the value-added GST. This improves cash flow as
investors do not need to pay the taxes up front, claim an input tax credit on their GST/HST return
and then wait for their net tax refund.
The Exporters of Processing Services Program (EOPS)
Administered by the CRA, the program removes from participants the obligation to pay
GST/HST on imports of goods belonging to non-residents, provided that these goods are
imported for processing, distribution or storage and are subsequently exported. Thus,
participation in the program helps investors increase cash flow and reduce operating expenses.
Summing It Up
Canada provides internationally oriented businesses with comparable benefits to those offered by
FTZs in the United States and around the world, with the two distinct advantages of lower
administration costs and no geographic restriction. Moreover, Canada’s value-added tax, the
GST/HST, is fully recoverable for businesses engaged in commercial activities and does not
apply to exports. Canada also has the lowest overall tax rate on new business investment. Taken
together, Canada’s highly competitive tariff, tax and duty deferral regimes (including the
targeted FTZ-type programs) will allow export-oriented companies to enjoy the benefits of
foreign trade zones anywhere in Canada.
Key Advantages and Benefits of Canada’s FTZ-Type Programs
Advantages
• Time and cost less onerous than the process to obtain a formal FTZ designation - no
heavy paper burden
• Accessible regardless of location - no geographic restriction
Benefits for business
• Improved cash flow
• Reduced operating expenses
• Increased international competitiveness

NAFTA Advantage
North America—the most lucrative market in the world
Want access to more than 442 million consumers and a combined GDP of more than US$17.0
trillion? Look no further than Canada.
America’s #1 Trading Partner
— by a long shot. Two-way goods-and-services trade between Canada and the United States
amounted to $740 billion dollars in 2008, or nearly $1.4 million a minute in trade.
Closer to the US than . . . the US
Many Canadian production hubs are actually closer to target U.S. markets than American
production sites. Of Canada's 20 largest cities, 17 are within an hour and a half drive of the
United States and many are much closer.
Production locations in Quebec and the industrial heartland of southwestern Ontario are often
closer to the huge American markets around New York, Boston, and Chicago than popular
American production hubs like Atlanta, GA, and Raleigh, NC.
Smart Borders
Fast and efficient trucking, railways, ocean shipping and air services link the two countries. To
accommodate the growth in trade and commerce, Canada and the United States have signed a
pact to work together to create a Smart Border. The Declaration outlined a 30-Point Action Plan,
which provides for ongoing collaboration in identifying and addressing security risks, while
efficiently expediting the legitimate flow of people and goods across the Canada-US border.

Access to Latin America

The North American Free Trade Agreement (NAFTA) gives you access to the entire continent
and entrée to Latin America. Following the success of the 1988 Canada-U.S. Free Trade
Agreement, in 1994 the original trading partnership expanded to include Mexico — creating the
largest free trade area in the world. Products traded with the United States and Mexico fall under
the terms of NAFTA and most tariffs were eliminated in 2004.
NAFTA revealed the true potential for Canada-Mexico-US trade and ushered in a new era of
economic integration. Canada and the US remain each other’s largest trading partners. Mexico is
now Canada's fourth largest export market, while Canada is Mexico's second largest
The Asia-Pacific Gateway and Corridor Initiative (APGCI)
The Asia-Pacific Gateway and Corridor Initiative (APGCI) is an unprecedented association of
public and private sector resources to take advantage of Canada’s strategic location at the
crossroads between the North American marketplace and the booming economies of Asia.
This initiative is responding to the huge volume in cargo traffic that is expected to increase
constantly with Asia-Pacific countries and China in particular. The significant resources invested
in the Gateway and Corridor are increasing Canada’s competitiveness. Specifically,
improvements in British Columbia ports and related railroad infrastructure have reduced
bottlenecks and helped to swiftly move merchandise to inland and multimodal transportation
hubs.
Private sector investment in the gateway and corridor has been an important component of its
success. Investors are participating in projects ranging from bridge construction to terminal
infrastructure at Canada’s western ports. These investments complement the federal
government’s contribution of over $860 million in infrastructure projects worth $2.3 billion
located in all four western provinces.
The APGCI provides potential investors with a substantial competitive advantage. In addition,
logistical benefits make Canada even more attractive as an investment location.
Transportation Advantage
Canada is Connected
Bordering three oceans, spanning six time zones and covering 9,970,610 square km (3,849,650
square miles), Canada is the second largest country on earth. But distance isn’t a deterrent for
businesses operating in Canada, thanks to its sophisticated infrastructure and highly developed
transportation network.
Here’s Why:
Airports—Canada has 26 airports as part of the national airports system, 594 certified airports
that support scheduled and non-scheduled flights, and 1,820 aerodromes that support takeoffs
and landings. Toronto is the busiest airport in the country, serving as an east-west hub and
handling roughly half of all passenger traffic. Canadian airports processed more than 71.5
million passengers in 2007. Source: Transport Canada, 2009.
Ports—More than 300 commercial ports and harbours move local and global goods in Canada.
The Atlantic, Arctic and Pacific oceans surround Canada’s three coasts. Canada is also home to
the world’s longest inland waterway open to shipping—the Great Lakes/St. Lawrence Seaway—
the industrial heart of North America. Major international ports include Halifax, Montréal and
Vancouver. Western Canadian ports offer the shortest sailing distance from North America to
the Asia-Pacific region, providing a sailing-time advantage of approximately two days over all
other locations in the Western Hemisphere.
Rail—Canadian railways handle 355 million metric tonnes of freight annually, much of it
moving between Canada and its NAFTA partners. The two major carriers in Canada, Canadian
Pacific Railway and Canadian National Railways, cover a combined 53,000 kilometres (33,000
miles) from Vancouver to Halifax, Montreal to New Orleans and Calgary to Houston.
Roads—Roads—with nearly 900,000 kilometres of road, Canada has enough transportation
infrastructure to circle the Earth 22 times. The Trans Canada Highway, the longest national
highway in the world, links all 10 provinces and is fully integrated with the US road network,
including 18 major border crossings. Source: Transport Canada, 2009.

To accommodate the phenomenal growth in free trade between Canada and the US, the two
countries have developed a shared Action Plan for Creating a Secure and Smart Border to speed
up the movement of legitimate travellers and trade.
The busy-friendly features of the Smart Border Accord
 • FAST lanes for pre-approved low-risk commercial traffic opened at Windsor-Detroit,
Sarnia-Port Huron, and Fort Erie-Buffalo.
• Automated permit ports, transponder identification systems and joint processing centres
are being tested and deployed.
• Today, border wait times average less than 10 minutes, one of the most efficient systems
in the world.
Lifestyle Advantage
A Great Place to Live
Canada is one of the best countries in the world to live, learn and work. From wide-open spaces
to the most cosmopolitan places, Canada offers beauty, variety and an enviable quality of life.
Canada is a place where people can realize their dreams, where families can enjoy a standard of
living second to none, and where businesses enjoy a competitive edge.
Strong and Free
Canadians are hard-working, ambitious people who are proud of their successful, independent
country. They want better lives for themselves, their children and future generations. They
believe in tolerance, justice and providing a helping hand to the less fortunate. More than empty
promises, equality is enshrined in Canada’s Charter of Rights and Freedoms and the country’s
Constitution, guaranteeing freedom and fairness for all.
Equality and Multiculturalism
Canada is a large country in both size and spirit. Canada ranks first among the G7 countries in
providing equal opportunities for individuals, whether native-born or a new arrival. Canadians
welcome immigrants from around the globe. Almost all of the world's ethnic groups are
represented in Canada, creating one of the world’s most culturally diverse and multilingual
societies, with over 200 languages spoken. Canada is also a world leader in integrating
newcomers, with progressive immigration laws highly conducive to hiring foreign workers.
Commitment to Each Other
Canadians place a premium on health and well-being, and are proud of our universal health
system and social safety network that ensure equitable opportunities for citizens to participate in
the life of our communities and country. This approach is both a social and economic asset. For
instance, Canadians spend significantly less GDP on health care than their US neighbours. This
provides cost benefits that give Canadian businesses a competitive advantage.
#1 among G7 Countries
• Best overall quality of life— Canada has the best overall quality of life among the G7.
In a 2009 quality-of-life ranking of 215 world cities by Mercer Human Resources
Consulting, four Canadian cities ranked among the top 25.
• A land of equal opportunity—Canada ranks first among the G7 in providing equal
opportunities for individuals.
• Best in addressing environmental concerns—As measured by the Environmental
Performance Index (EPI), Canada’s ranks 2nd in the G7 and 12th in a 149-country study
in terms of effectively reducing environmental stresses on human health and promoting
ecosystem vitality and sound natural resource management.
• Safest place to live—Canada leads the G7 in terms of the safest place to live and conduct
business with the most fairly administered judicial system.
• Optimal human development—According to the United Nations 2009 Human
Development Index, Canada ranked first among the G7 and fourth among the 180
countries surveyed
Political Environment of Canada

In Canada, there are 3 levels of government. Each level of government has different
responsibilities.
• Federal government (the Government of Canada) - Responsible for things that affect the
whole country, such as citizenship and immigration, national defence and trade with other
countries.
• Provincial and territorial governments (for example, the Province of Ontario) -
Responsible for such things as education, health care and highways.
• Municipal (local) governments (cities, towns, and villages in Ontario) - Responsible for
firefighting, city streets and other local matters. If there is no local government, the
province provides services.
Government structure in Canada follows the model of the British Parliament.
Read an excellent overview of the Canadian political system and structure.
Federal Government
At the federal level, there are 3 parts of government:
• Elizabeth II, Queen of Canada, is Canada's formal head of state. The Governor General
represents the Queen in Canada and carries out the duties of head of state.
• The House of Commons makes Canada's laws. Canadians elect representatives to the
House of Commons. These representatives are called Members of Parliament (MPs)
and usually belong to a political party. The political party that has the largest number of
MPs forms the government, and its leader becomes prime minister.
• The prime minister is the head of government in Canada. The Prime Minister chooses
MPs to serve as ministers in the cabinet. There are ministers for citizenship and
immigration, justice and other subjects. The cabinet makes important decisions about
government policy.
• The Senate reviews laws that are proposed by the House of Commons. Senators come
from across Canada. The prime minister chooses the senators.
Read this Guide to the Canadian House of Commons for more information.
Provincial Government
At the provincial level:
 • The Lieutenant Governor represents the Queen.
• The Legislative Assembly makes law. In Ontario, elected representatives are called
Members of Provincial Parliament (MPPs).
The political party that has the largest number of MPPs forms the government, and its leader
becomes premier. The premier is the head of government in Ontario.
The premier leads the government and chooses MPPs to serve as ministers in the cabinet. The
cabinet sets government policy and introduces laws for the Legislative Assembly to consider.
Visit Civics 101 for more information about how the provincial government works. Watch
videos and interviews with politicians, ask an MPP your questions, use a budget simulator and
more.
Municipal (Local) Government
At the municipal level:
• The Province of Ontario defines the structure, finances, and management of the local
governments of cities, towns and villages.
• Residents of the municipality elect the mayor and council members to lead the local
government. Committees of councillors discuss budget, service and administrative issues
that are then passed on to the council for debate. Citizens, business owners and
community groups can present their concerns to councillors at committee meetings.
• Municipalities may also be part of a larger county or regional government.

The politics of Canada function within a framework of parliamentary democracy and a federal
system of parliamentary government with strong democratic traditions. Canada has a multi-party
system in which many of the country's legislative practices derive from the unwritten
conventions of and precedents set by the United Kingdom's Westminster Parliament. However,
Canada has evolved variations: party discipline in Canada is stronger than in the United
Kingdom and more parliamentary votes are considered motions of confidence, which tends to
diminish the role of non-Cabinet Members of Parliament (MPs). Such members, in the
government caucus, and junior or lower-profile members of opposition caucuses, are known as
backbenchers. Backbenchers can, however, exert their influence by sitting in parliamentary
committees, like the Public Accounts Committee or the National Defence Committee. The two
dominant political parties in Canada at present are, and have historically been, the Conservative
Party of Canada and the Liberal Party of Canada, but smaller parties such as the social
democratic New Democratic Party, the Quebec nationalist Bloc Québécois and the Green Party
of Canada can exert their own influence over the political process.

Political conditions
Canada is considered by most sources to be a very stable democracy. In 2006 The Economist
ranked Canada the third most democratic nation in its Democracy Index, ahead of all other
nations in the Americas and ahead of every nation more populous than itself. In 2008, Canada
was ranked World No. 11 and again ahead of all countries more populous and No. 1 for the
Americas. (In 2008, the U.S.A. was ranked World No. 18, Uruguay World No. 23, and Costa
Rica World No. 27.)
The Liberal Party of Canada, under the leadership of Paul Martin, won a minority victory in the
June 2004 general elections. In December 2003, Martin had succeeded fellow Liberal Jean
Chrétien, who had, in 2000, become the first Prime Minister to lead three consecutive majority
governments since 1945. However, in 2004 the Liberals lost seats in Parliament, going from 172
of 301 Parliamentary seats to 135 of 308, and from 40.9% to 36.7% in the popular vote. The
Canadian Alliance, which did well in western Canada in the 2000 election, but was unable to
make significant inroads in the East, merged with the Progressive Conservative Party to form the
Conservative Party of Canada in late 2003.
They proved to be moderately successful in the 2004 campaign, gaining seats from a combined
Alliance-PC total of 78 in 2000 to 99 in 2004. However, the new Conservatives lost in popular
vote, going from 37.7% in 2000 down to 29.6%. In 2006 the Conservatives, led by Stephen
Harper, won a minority government with 124 seats. They improved their percentage from 2004,
garnering 36.3% of the vote. During this election, the Conservatives also made major
breakthroughs in Quebec. They gained 10 seats here, whereas in 2004 they had no seats.
This was the second minority government in Canada federally since 1979-1980. That
government, led by Joe Clark, lasted only seven months. The situation, however, was different.
The Clark government was elected in part because many voters did not want to support the
Liberal party, but they did not expect that the Progressive Conservatives would win enough seats
for a minority government.
Minority governments are not always short-lived. While they have not generally lasted four
years, there have been minority governments in the time before 1979 that were fairly stable and
able to pass legislation. Minority government situations in Canada may become somewhat
difficult to manage though, as in the past there were only three parties that had a significant
number of seats in parliament (fourth parties were at times represented in small numbers),
although the third party has changed over time. This meant an alliance between the governing
and third parties would have a solid majority. Since the 1930s, the third party was usually the
Co-operative Commonwealth Federation or later the New Democratic Party, which was created
when an alliance was formed between labour unions and the Co-operative Commonwealth
Federation. The Social Credit Party of Canada was the third party at times. Before this, there
were other parties that had significant influence; such as the Progressive Party in the 1920s.
No such governing coalition was able to form in the 38th Parliament.
Conservatives in power
The Liberal Party, after dominating Canadian politics since the 1920s, has been in decline in the
21st century. As Lang (2010) concludes, they lost their majority in Parliament in the 2004
election, were defeated in 2006, and in 2008 became little more than a "rump," falling to their
lowest seat count in decades and a mere 26% of the popular vote. Furthermore, says Lang (a
Liberal himself), its prospects "are as bleak as they have ever been."[4]
In explaining these trends, Behiels (2010) reports that "a great many journalists, political
advisors, and politicians argue that a new political party paradigm is emerging"; that is, that
Canada has recently undergone a watershed political realignment, the sort of political upheaval
that happens rarely and often lasts for many years. In terms of the results of the national elections
of 2004, 2006, and 2008, as well as Stephen Harper's political endurance, many Canadian
experts, says Behiels, are generally agreed.[5] They see a new power configuration based on a
right-wing political party capable of sharply changing the traditional role of the state (federal and
provincial) in the twenty-first-century. Behiels says that unlike Brian Mulroney, who tried but
failed to challenge the long-term, dominance of the Liberals, Harper's attempt has proven to be
more determined, systematic and successful thus far.[6]
Bloomfield and Nossal (2007) suggest that the new political alignment has reshaped Canadian
foreign policy, especially in improving relations with the U.S., taking a harder line on the Middle
East conflicts, and backing away from the Kyoto Protocol on global warming.[7]
[edit] Party funding reform
Funding changes were made to ensure greater reliance on personal contributions. Personal
donations to federal parties and campaigns benefit from tax credits, although the amount of tax
relief depends on the amount given. Also only people paying income taxes receive any benefit
from this.
A good part of the reasoning behind the change in funding was that union or business funding
should not be allowed to have as much impact on federal election funding as these are not
contributions from citizens and are not evenly spread out between parties. They are still allowed
to contribute to the election but only in a minor fashion. The new rules stated that a party had to
receive 2% of the vote nationwide in order to receive the general federal funding for parties.
Each vote garnered a certain dollar amount for a party (approximately $1.75) in future funding.
For the initial dispersement, approximations were made based on previous elections. The NDP
received more votes than expected (its national share of the vote went up) while the new
Conservative Party of Canada received fewer votes than had been estimated and has been asked
to refund the difference. The province of Quebec was the first province to implement a similar
system of funding many years before the changes to funding of federal parties.
Federal funds are disbursed quarterly to parties, beginning at the start of 2005. For the moment,
this disbursement delay leaves the NDP and the Green Party in a better position to fight an
election, since they rely more on individual contributors than federal funds. The Green party now
receives federal funds, since it for the first time received a sufficient share of the vote in the 2004
election.
Commonly, two national debates receive nationwide coverage during an election, one in each
official language. Both debates are broadcast in translation, so it is possible to watch either
debate without a working knowledge of the language of the debate, although part of the meaning
can be lost. People who are bilingual enough to understand both the English- and French-
language debates without need of translation will get a better idea of the substances of the two
debates and the differences between them if they decide to watch both debates.
Currently only the parties represented in Parliament participate in the debates. The Green Party,
however, has argued that it should also be allowed to participate. Its share of the vote has
increased greatly, due in part to the new funding formula, in part because it ran in many more
ridings than in previous elections (it nominated candidates in every riding in the 2004 and 2006
elections), and in part to increased popularity. Thus the argument goes that if there is sufficient
national support to earn official recognition as a party (i.e., one that is granted funding based on
getting 2% or more of the national vote) it should also be allowed to debate on the same level as
the other officially recognized parties.
Also, having received 6% of the vote in British Columbia and based on past precedent, the
Greens will have a stronger case for being included in the debates in future elections. The Bloc
Québécois was allowed to participate in debates on the basis of its support in Quebec - even
before it had elected any MPs in a general election (the only Bloc's MPs at the time had either
switched parties or won in by-elections). Furthermore, on the basis of anticipated support, the
Reform Party of Canada was included in debates despite only having a single MP. Therefore,
past party performance or number of seats is not how participants are chosen.
In 2007, news emerged of a funding loophole that "could cumulatively exceed the legal limit by
more than $60,000," through anonymous recurrent donations of 200 dollars to every riding of a
party from corporations or unions

Political cleavages
When analyzing Canadian political parties and leaders, federal-provincial, French-English, and
Canada-US relations are important, therefore, a simple Left-Right spectrum based on only one
criterion can be misleading. Also of increasing importance in recent polls is concern for the
environment. In the main, only the parties that have currently elected MPs can be discussed in
detail, although the increasing strength of theGreen Party of Canada bears mentioning.
In terms of economic policy, the Conservative (or Tory Party), is the least interventionist of the
major parties, the Liberals slightly more so, and the New Democrats substantially
more interventionist. Historically this was not always the case. In the 19th Century, the Liberal
Party stood for British classical liberalism and free trade, and the Conservatives, especially so-
called "Red Tories", for protectionism. During the 20th Century however, the Liberal Party
adopted more elements of European reform liberalism, and co-opted elements of the social-
democratic Progressive Party of Canada, and Co-operative Commonwealth Federation. During
the 1990s the Liberals shifted back to a moreneoliberal position on the economy and trade, but as
the other parties moved as well, this did not result in a change in position on the spectrum.
Within the Reform Party of Canada there was an element of anti-market populism but this faded
as the Reform Party became more associated with US-style conservatism. The NDP have
retained many of the socialist tendencies of the former CCF and remain to the left of some other
social democratic parties in the Western world, such as Britain’s Labour Party. The Bloc
Québécois do not place a strong emphasis on economic policy, as the party’s sole raison d’etre
has to do with issues of Quebec’s place in Canada, however they are broadly social democratic.
In term of the pace of change, the Tories are conservative, the Liberals and NDP tend towards
the more progressive, and the BQ are radical, favouring Quebec’s withdrawal from the Canadian
state and society.
In regard to federal-provincial relations it can said that BQ are separatist, the Tories decentralist,
the Liberals status-quo, and the NDPcentralist. The NDP and BQ are allies on economic matters
but completely opposite in terms of issues of federalism. Historically the Liberals were the party
of provincial rights, and the Tories of centralism, but that switched during the 20th Century.
With regards to issues of diversity (bilingualism and multiculturalism), the Tories tend to be
more majoritarian, favouring a reduced scope for official bilingualism and a
more assimilationist approach to immigrants and Native peoples. The Liberals and NDP are
more pluralisticincluding generous government support for minority cultures, while the BQ
favour viewing Canada as two separate societies (English Canada and Quebec), and advocate
strong protections for French language and culture in Quebec while remaining unconcerned
about issues with other minorities or in other parts of the country.
As pertains to relations with the United States, currently the Conservative Party advocates close
relations, the NDP is more skeptical of American power, and the Liberals in between. The BQ
hopes to create an independent Quebec state that will set its own policy on foreign relations,
separate from those of Canada. The politicies of the two main parties are exactly the reverse of
19th century, when the Tories were a party of protectionism and the Liberals favoured free trade
with the US.
The historical position of the parties on those issues is closely related to two other historical
cleavages in Canada, religion and empire. During the 19th and early 20th Centuries English
Canada remained strongly committed to the British Empire and Protestantism. French Canada
was more anti-Imperialist and strongly Catholic. Attempting to form stable parties that could win
seats in both areas was a daunting task, and led to political deadlock in the Province of
Canada before Confederation.
During the era of Confederation, British-style Whig liberals from Canada West, the Clear
Grits and Reformers, attempted to work with theanti-clerical minority in Canada East, the Parti
rouge, and liberals in the Maritimes to form the Liberal Party. While the avowedly anti-
democratic Tories of the English colonies attempted to create a coalition with conservative
Catholics in Canada East, the Parti bleu.
Keeping these diverse coalitions united remained difficult when interests cut across party lines,
and instead inflamed sectional feeling. The first such issues were the two Riel Rebellions of 1870
and 1885 which hardened Catholic – Protestant animosity. The Tory government of Sir John A.
Macdonald, himself an Orangeman, eventually oversaw the execution of Metis leader Louis
Riel (a devout Catholic) for treason. The Tory party was decimated in Quebec, and the Liberal
party everywhere else. Eventually, Sir Wilfrid Laurier was able to lead the Liberals back to a
competitive position in English Canada, but by the time of the First World War, and
the Conscription Crisis of 1917, Laurier again found himself in charge of a Liberal Party limited
to Quebec and a few other pockets. In part because of the memories of these eras, the Tory party
gained a reputation as being anti-Catholic and anti-French, and remained substantially weaker
than the Liberals in Quebec from the 1890s to the 1980s, with the lone exception of 1958.
Meanwhile, Laurier’s Liberals were accused of not supporting the Mother Country forcefully
enough during the Boer War and with the creation of the Canadian Navy, widely disparaged as
a Tin Pot Navy , which hurt his party in Anglo-Saxon Ontario.
Since that time, sectarianism has faded substantially as an issue in Canada, and relations with
Britain are no longer of nearly the same importance. Instead the debate over the future of
Quebec and relations with the United States have become powerful issues.
[edit]Relationship with the United States
Main article: Canada-United States relations
Canada and the United States are both nations with their own unique heritages and cultures
stemming back for centuries, but the two countries also share many similarities which have
generally strengthened relations. Canada's relationship with the U.S. has usually been a dominant
focus of Canada's foreign affairs. Various Prime Ministers such as Sir John A. Macdonald, Sir
Robert Borden, John Diefenbaker, and Pierre Trudeau have attempted to reasonably distance
Canada from the United States to focus on self-sufficiency while maintaining good relations,
while other Prime Ministers such as Sir Wilfrid Laurier, Louis St. Laurent, and Brian
Mulroney attempted to integrate with the Americans on an economic level and strived for close
political relations hoping to enlarge markets. Both courses have had their benefits and downfalls
and the Canadian people have usually been cautious of too much integration with the United
States, and on the other hand equally as cautious of creating poor relations.
The goal for most successful governments has been to try to preserve Canadian independence
and some level of self-sufficiency, while working on maintaining friendly relations and mutually
beneficial trade.
Trade has generally stood as being one of the most controversial and difficult of all of the issues
between Canada and the United States. There have been three major trading policies aimed at the
United States which have been implemented by Canadian governments. TheNational Policy of
Canada's first Prime Minister, Sir John A. Macdonald placed high tariffs on US goods and was
very successful in building Canada's manufacturing industry. The National Policy remained in
effect to one degree or another for over a century, and saw Canada transformed from a poor
colony prior to 1867 into one of the world's wealthiest nations by the 20th century. The National
Policy enjoyed strong support among Canadian nationalists who wanted to ensure that Canada
would never become "subservient" to the United States, and originally it was supported by big
businesses who feared US competition. However much later big business would begin seeking
larger markets and would become opposed to economic nationalism and would come out
supporting free trade, leaving support for economic protectionism mainly made up of small
businesses, trade unions and nationalists.
The National Policy was followed by a policy of "freer trade" which was slowly implemented
by Liberal Party Prime Ministers, William Lyon Mackenzie King, Louis St. Laurent and Lester
Pearson. "Freer trade" was not free trade in any way, shape or form. Instead it meant the
reduction of taxation on US goods. In 1988 Progressive Conservative Prime Minister Brian
Mulroney broke with his party's economic nationalist tradition and negotiated the Free Trade
Agreement (FTA) with the United States, which led to North American Free Trade
Agreement (NAFTA) in 1994. This new agreement allowed the US complete access to the
Canadian market while at the same time retaining the right to block Canadian access to the US
markets at any time. There were benefits, but also problems. Many Canadian manufacturers
claimed that it was difficult to compete with larger US companies which were able to charge less
for their products.
Also many Canadians were and still are worried about the threats which certain sections of
NAFTA are believed to pose to Canada's environment and cultural institutions. A short example
would be the provisions which make it impossible to stop selling a product once a nation has
begun selling it, if the Canadian government gives in to demands by US companies to sell water
from the Great Lakes or lumber from protected crown lands, then the government according to
the agreement will not be able to stop those companies from purchasing as much water from the
Great Lakes (or other lakes and rivers) or trees from protected lands as they please.
There are many pros and cons to the agreement, and the debate over it highlights some of the
insecurities and fears surrounding Canada-U.S. relations. On the other hand supporters claim that
the agreement has created hundreds of thousands of jobs in Canada, while opponents point to a
weaker Canadian dollar and a stronger U.S. dollar being behind job creation. Regardless of
whether it is beneficial or harmful Canada can back out of the North American Free Trade
Agreement at any time it wishes to do so with 6 months' notice.
Trade with the US is not the only issue which has created controversy. Differing opinions on US
wars such as the Vietnam war or the war in Iraq, as well as US opposition to past wars in which
Canada has been involved such as World War I and World War II, both of which the U.S.
originally opposed itself have also created difficulties. As well, the issue of Ballistic Missile
Defense, a controversial American system which most Canadians do not want to see Canada
involved with.
Economical Environment of Canada

Canada has the ninth largest economy in the world (measured in US dollars at market exchange
rates), is one of the world's wealthiest nations, and is a member of the Organization for
Economic Co-operation and Development (OECD) and Group of Eight(G8). As with other
developed nations, the Canadian economy is dominated by the service industry, which employs
about three quarters of Canadians. Canada is unusual among developed countries in the
importance of the primary sector, with the logging and oil industries being two of Canada's most
important. Canada also has a sizable manufacturing sector, centered in Central Canada, with
the automobile industry especially important.

Canada has one of the highest levels of economic freedom in the world. Today Canada closely
resembles the U.S. in its market-oriented economic system, and pattern of production.[6] As of
December 2010, Canada's national unemployment rate stood at 7.6% ) as the economy continues
its recovery from the effects of the 2007-2010 global financial crisis. In May 2010, provincial
unemployment rates varied from a low of 5.0% in Saskatchewan to a high of 13.8%
in Newfoundland and Labrador. According to the Forbes Global 2000 list of the world's largest
companies in 2008, Canada had 69 companies in the list, ranking 5th next to France. As of 2008,
Canada’s total government debt burden is the lowest in the G8.

International trade makes up a large part of the Canadian economy, particularly of its natural
resources. In 2009, agricultural, energy, forestry and mining exports accounted for about 58% of
Canada's total exports. Machinery, equipment, automotive products and other manufactures
accounted for a further 38% of exports in 2009. In 2009, exports accounted for approximately
30% of Canada's GDP. The United States is by far its largest trading partner, accounting for
about 73% of exports and 63% of imports as of 2009. Canada's combined exports and imports
ranked 8th among all nations in 2006.

Canada has considerable natural resources spread across its varied regions. As an example,
in British Columbia the forestry industry is of great importance, while the oil and gas industry is
important in Alberta, Saskatchewan and Labrador. Northern is home to a wide array of mines,
while the fishing industry has long been central to the character of the Atlantic provinces, though
it has recently been in steep decline. Canada has mineral resources of coal, copper, iron ore, and
gold.

These primary industries are increasingly becoming less important to the overall economy. Only
some 4% of Canadians are employed in these fields, and they account for 6.2% of GDP. They
are still paramount in many parts of the country. Many, if not most, towns in northern Canada,
where agriculture is difficult, exist because of a nearby mine or source of timber.

Canada produce gold, nickel, uranium, diamonds and lead. Several of Canada's largest
companies are based in natural resource industries, such as EnCana, Cameco, Goldcorp,
and Barrick Gold. The vast majority of these products are exported, mainly to the United States.
There are also many secondary and service industries that are directly linked to primary ones.
For instance one of Canada's largest manufacturing industries is the pulp and paper sector, which
is directly linked to the logging industry.
The large reliance on natural resources has several effects on the Canadian economy and
Canadian society. While manufacturing and service industries are easy to standardize, natural
resources vary greatly by region. This ensures that differing economic structures developed in
each region of Canada, contributing to Canada's strong regionalism. At the same time the vast
majority of these resources are exported, integrating Canada closely into the international
economy. Howlett and Ramesh argue that the inherent instability of such industries also
contributes to greater government intervention in the economy, to reduce the social impact of
market changes.
Such industries also raise important questions of sustainability. Despite many decades as a
leading producer, there is little risk of depletion. Large discoveries continue to be made, such as
the massive nickel find at Voisey's Bay. Moreover the far north remains largely undeveloped as
producers await higher prices or new technologies as many operations in this region are not yet
cost effective. In recent decades Canadians have become less willing to accept the environmental
destruction associated with exploiting natural resources. High wages and Aboriginal land claims
have also curbed expansion. Instead many Canadian companies have focused their exploration
and expansion activities overseas where prices are lower and governments more accommodating.
Canadian companies are increasingly playing important roles in Latin America, Southeast Asia,
and Africa.
The exploitation of renewable resources have raised concerns in recent years. After decades of
escalating overexploitation the cod fishery all but collapsed in the 1990s, and the Pacific salmon
industry also suffered greatly. The logging industry, after many years of activism, has in recent
years moved to a more sustainable model

Canada’s unsustainable economic structure: why your taxes will increase by 50%. One third of
people in this country do not work for a living, yet are not considered unemployed. Of the two-
thirds of the population that work, a quarter are in the public sector or unemployed, neither of
which creates any wealth. This means half the people in this country pay all the bills.

The average personal tax rate in Canada is 33.3%. One-third of the producing population’s
earnings are taken away to pay for the needs of everyone else. But this isn’t enough ! To balance
the books productive taxpayers have to pay 50%. We have structural deficits of 16.6% of GNP
every year because taxes are too low to pay for the number of people who don’t produce. To
balance the books rates have to be hided from 33.3% to 50% which is a fifty percent increase in
average tax rates.

Surely these numbers can’t be true ?!? Well, very sorry to tell you they are. Every figure used
here comes from Statistics Canada or the OECD. See footer for reference links.
As for the logic, it is pretty hard to refute that the very young, the unemployed, the retired and
employees of government contribute to economic productivity, because they don’t. Government
employees do not create wealth, they redistribute and consume it. Spending savings does not
create wealth either.

And then there’s the argument that businesses and government employees pay taxes too, so it
isn’t all on the productive workers that the burden falls, right? Not so, I’m afraid. All of the taxes
paid by businesses come out of the pockets of shareholders. Corporate tax law is structured to
accelerate collection of taxes, not transfer tax burden to them. Taxes paid by government
employees come out of government wages paid, which are financed by the productive population
(plus the structural debt). In a way, government employees work for a net wage of 66 cents on
the dollar. But that 66 cents is inescapably paid for by the productive population…and debt.

Canada is one of the few developed nations that is a net exporter of energy - in 2009 net exports
of energy products amounted to 2.9% of GDP. Most important are the large oil and gas resources
centred in Alberta and the Northern Territories, but also present in neighboring British Columbia
and Saskatchewan. The vast Athabasca Oil Sands give Canada the world's second largest
reserves of oil after Saudi Arabia according to USGS. In British Columbia and Quebec, as well
as Ontario, Saskatchewan, Manitoba and the Labrador region, hydroelectric power is an
inexpensive and relatively environmentally friendly source of abundant energy. In part because
of this, Canada is also one of the world's highest per capita consumers of energy. [15][16] Cheap
energy has enabled the creation of several important industries, such as the large aluminum
industry in Quebec and British Columbia.
Historically, an important issue in Canadian politics is that while Western Canada is one of the
world's richest sources of energy, the industrial heartland of Southern Ontario has fewer native
sources of power. It is, however, cheaper for Alberta to ship its oil to the western United States
than to eastern Canada. The eastern Canadian ports thus import significant quantities of oil from
overseas, and Ontario makes significant use of nuclear power.
In times of high oil prices this means that the majority of Canada's population suffers, while the
West benefits. The National Energy Policy of the early 1980s attempted to force Alberta to sell
low priced oil to eastern Canada. This policy proved deeply divisive, and quickly lost its
importance as oil prices collapsed in the mid-1980s. One of the most controversial sections of the
Canada-United States Free Trade Agreement of 1988 was a promise that Canada would never
charge the United States more for energy than fellow Canadians.

Canada is also one of the world's largest suppliers of agricultural products, particularly of wheat
and other grains. Canada is a major exporter of agricultural products, to the United States but also
to Europe and East Asia. As with all other developed nations the proportion of the population
and GDP devoted to agriculture fell dramatically over the 20th century.
As with other developed nations, the Canadian agriculture industry receives significant
government subsidies and supports. However, Canada has been a strong supporter of reducing
market influencing subsidies through the World Trade Organization. In 2000, Canada spent
approximately CDN$4.6 billion on supports for the industry. Of this, $2.32 billion was classified
under the WTO designation of "green box" support, meaning it did not directly influence the
market, such as money for research or disaster relief. All but $848.2 million were subsidies
worth less than 5% of the value of the crops they were provided for, which is the WTO
threshold. Consequently, Canada used only $848.2 million of its $4.3 billion subsidy allowance
granted by the WTO.

The general pattern of development for wealthy nations was a transition from a primary industry
based economy to a manufacturing based one, and then to a service based economy. Canada did
not escape this pattern - at its (abnormally high World War 2) peak in 1944, manufacturing
accounted for 29% of GDP, declining to 15.6% in 2005. Canada has not suffered as greatly as
most other rich, industrialized nations from the pains of the relative decline in the importance of
manufacturing since the 1960s. A 2009 study by Statistics Canada also found that, while
manufacturing declined as a relative percentage of GDP from 24.3% in the 1960s to 15.6% in
2005, manufacturing volumes between 1961 and 2005 kept pace with the overall growth in the
volume index of GDP. Manufacturing in Canada was especially hard hit by the 2007-2010 global
financial crisis. As of 2010, manufacturing accounts for 13% of Canada's GDP, a relative decline
of more than 2% of GDP since 2005.
Central Canada is home to branch plants to all the major American and Japanese automobile
makers and many parts factories owned by Canadian firms such as Magna International and
Linamar Corporation. Central Canada today produces more vehicles each year than the
neighboring U.S. state of Michigan, the heart of the American automobile industry.
Manufacturers have been attracted to Canada due to the highly educated population with lower
labour costs than the United States. Canada's publicly funded health care system is also an
important attraction, as it exempts companies from the high health insurance costs they must pay
in the United States.
Much of the Canadian manufacturing industry consists of branch plants of United States firms,
though there are some important domestic manufacturers, such as Bombardier Inc.. This has
raised several concerns for Canadians. Branch plants provide mainly blue collar jobs, with
research and executive positions confined to the United States.
The service sector in Canada is vast and multifaceted, employing some three quarters of
Canadians and accounting for over two thirds of GDP. The largest employer is the retail sector,
employing almost 12% of Canadians. The retail industry is mainly concentrated in a small
number of chain stores clustered together in shopping malls. In recent years, there has been an
increase in the number of big-box stores, such as Wal-Mart (of the United States) and Future
Shop (a subsidiary of the US based Best Buy) and Zellers. This has led to fewer workers in this
sector and a migration of retail jobs to the suburbs.
The second largest portion of the service sector is the business services, employing only a
slightly smaller percentage of the population. This includes the financial services, real estate, and
communications industries. This portion of the economy has been rapidly growing in recent
years. It is largely concentrated in the major urban centres, especially Toronto, Montreal and
Vancouver (see Banking in Canada).
The education and health sectors are two of Canada's largest, but both are largely under the
purview of the government. The health care industry has been rapidly growing, and is the third
largest in Canada. Its rapid growth has led to problems for governments who must find money to
fund it.
Canada has an important high tech industry, and also an entertainment industry creating content
both for local and international consumption. Tourism is of ever increasing importance, with the
vast majority of international visitors coming from the United States. Though the recent strength
of the Canadian Dollar has hurt this sector, other nations such as China have increased tourism to
Canada.
Social Environment of Canada

Two general class models are used most often in describing the Canadian social structure
(Forgese, 1983). The first of these models is the pluralist, which holds that assimilation in the
Canadian social structure has occurred in such a way that, while ethnic, racial, and economic
divisions continue to exist, the dominance of a social elite has been eliminated. The second of the
models is the elite, which holds both that divisions remain within the Canadian social structure,
and that the Cana-dian social structure is hierarchical in character. This research reviews the
Canadian social structure, and, through this review, assesses the validity of the two models, as
accurate descriptors of the Canadian social structure.
Assimilation, generally, is defined as the process of incorporating various racial and ethnic
groups into a societyto which they have immigrated, in such a way that they mayhenceforth be
described by the characteristics of the society in which they have been assimilated, as opposed to
the charac-teristics of the societies from which they came (Gordon, 1964). On a formal level,
assimilation is a "process of interpretation
and fusion in which persons and groups acquire the memories, sentiments, and attitudes of other
persons or groups, and, by sharing their experience and history, are incorporated with them into a
common life"
he third major reason working against full assimila-tion in Canada is historical example. The
francophone minority in Canada (primarily Quebec) has not been fully assimilated, 4nor are
there in 1990, or have there ever been, any indications that francophones desire an assimilation
with anglophone Canada. Anglophone Canada has always sought francophone assim-ilation on
terms which would treat the francophones as virtual immigrants to Canada, and, for their part,
the francophones attempt to treat anglophones in a similar manner within the Province of
Quebec. A second historical example involves the native peoples of Canada. In attempts to
assimilate native populations into the Canadian social structure, both anglophone and
francophone Canada have wreaked havoc on native cultures in Canada. The Mulroney
government in Ottawa, in a fit of pique over the defeat of the Meech Lake Accord, and the
Bourassa government in Quebec City, in a typical example of francophone obstancy and
wrongheadedness, reinforced the historical treat-ment of Canada's native peoples, as they dealt
with the crises on Montreal's south shore.
This research reviews the Canadian social structure, and, through this review, assesses the
validity of two models often used to describe Canadian society, as accurate descriptors of the
Canadian social structure. The two models considered in this research are the class model, and
the elite pluralist model (Porter, 1965).
The class model assumes divisions within Canadian society along the lines of British society, in
which the working class, as an under class, is pitted against a business class, and even an upper
class aristocracy (Forgese, 1983). The elite plural-ist model recognizes the presence in Canadian
society of elites, and recognizes that classical democracy, as that ideal is embraced in the concept
of pluralism, does not exist in Canada. The elite pluralist model, however, holds that demo-cratic
values are preserved in Canada through a system of mul-tiple, competing elites (Forgese, 1983).
Within the concept of the elite pluralist model, competing elites determine public policy through
bargaining and compromise, while the voting rights of the masses enable new elites to gain a
share of the power within the Canadian social and political systems. Pure elitism is not generally
thought to exist within Canadian society (Porter, 1965).

CANADIAN SOCIETY AS ELITE PLURALIST

Elite theory holds that an elite is comprised of a rela-tively few people within a society who have
and exercise power within that social system (Dye, & Ziegler, 19 evolt," on the one hand, and
"order and decency," on the other hand (Allen, 1961, p. 228). Opposing this view, working class
Canadians, social activists, and the Methodist Church viewed the Winnipeg General Strike as a
clash between "plutocratic greed and oppression," on the one hand, and "the rights of man," on
the other hand (Allen, 1961, p. 228). Over the seven decades since the Winnipeg General Strike,
the absolutes of 1919 have softened, and a widespread general consensus has developed, in
which it is recognized that (1) the principles for which the strike was waged were just, (2) the
demands of labour were reasonable, and (3) the reactions of the Canadian social elites of the day
to the strike demands, and to the strike itself were the sources of most of the trouble. That this
consensus view is generally correct is supported by the facts that (1) the most important demands
of labor and social activists made during the Winnipeg General Strike have been recognized and
enacted into law by government over the past 70 years, and (2) the political successor to the
forces behind the Winnipeg General Strike--the New Democratic Party--has emerged as a major
political force in Canada. Among the legacies of the Winnipeg General
Examines popular attitudes in Upper Canada regarding social structure and the degree of social
mobility that was thought possible during the period from 1815 to 1840, when Upper Canada
was viewed as a "poor man's country" where all could "be laird" and prosper but was also
characterized by a set of fixed social strata.

SOCIAL CLASSES IN CANADA

Despite the difficulty in clearly defining class levels in Canadian society because of low levels of
status consistency and the fluidity provided by social mobility, it is possible to think of four
general social classes in Canada.

The Upper Class

Perhaps 3 to 5% of Canadians fall into this class. Much of their wealth is inherited, their children
go to private schools and they exercise great power in occupational positions. Although this
group has historically been primarily of British origin, it is now more widely distributed.

Upper-uppers
One percent belong to an upper-upper level distinguished primarily by "old money".

Lower-uppers
The remaining 2-4% fall into the lower-upper level and depend more on earnings than inherited
wealth.

The Middle Class

Roughly 40-50% of the Canadian population falls into this category. Because of its size it has
tremendous influence on patterns of North American culture. There is considerable racial and
ethnic diversity in this class and it is not characterized by exclusiveness and familiarity. The top
half of this category is termed the "upper-middle" class with family incomes of $50,000 to
$100,000 earned from upper managerial or professional fields. The rest of the middle class
(average middles) typically work in less prestigious white-collar occupations or highly skilled
blue-collar jobs. According to the Social Diversity Box (p. 270) the middle class dominate the
Calgary Stampede.

The Working Class

This class comprises about one-third of the population and has lower incomes than the middle-
class and virtually no accumulated wealth. Their jobs provide less personal satisfaction.

The Lower Class

The remaining 20% of our population is identified as the lower class. In 2001 roughly 15% of the
Canadian population were labeled as poor. Many are supported entirely by welfare payments
while others are among the "working poor" whose incomes are insufficient to cover necessities
like food, shelter, and clothing. They typically live in less desirable neighbourhoods — often
racially or ethnically distinct — and their children are often resigned to living the same hopeless
lives of their parents. Recent government cut-backs on welfare in some provinces may lead to
even greater living constraints for this group of people.

Class, Family, and Gender

Family life tends to reproduce the class structure in each generation. Parents define children's
expectations and the middle-class clearly has higher educational and occupational expectations
of their children than the working class. The box on Exploring Cyber Society (p 266) posits the
possibility that exposure to home computers might give children an occupational advantage in
the information society. The children of the affluent are more likely to receive that exposure.
Spousal relationships also differ with more rigid role segregation in the working class as
compared to more egalitarian relationships in the middle class, which also contain more
emotional intimacy.

SOCIAL MOBILITY
Canada is characterized by a significant measure of social mobility. Social mobility can result
from personal achievement or structural change in the society itself. It can be upward or
downward and intragenerational or intergenerational. Intragenerational social mobility refers
to a change in social position occurring during a person's lifetime. Intergenerational social
mobility refers to upward or downward social mobility of children in relation to their parents.

Myth Versus Reality

Canadians have generally expected that each new generation will do better than the last. Recent
data suggest that while there is much upward and downward activity on balance not much shift
takes place between generations. Men experience more occupational inheritance than women and
education is the key to occupational mobility in Canada. Divorce is a good predictor of
downward social mobility for women but not men.

The Global Economy and Canadian Class Structure

The rates of social mobility in Canada have been much the same as other industrial societies; not
very extensive. The restructuring of the Canadian economy with manufacturing jobs moving
elsewhere and service jobs replacing them, leads fewer Canadians to expect that their children
will experience better standards of living than they experienced themselves. The late 1990s,
however, saw a dramatic decrease in unemployment because of an expanding economy.

POVERTY IN CANADA
Social stratification creates "haves" and "have-nots." The "have-nots" can experience relative
poverty, a deprivation in relation to those who have more, or absolute poverty, a deprivation of
resources that is life threatening. Roughly one in seven of the world's population lives in
conditions of absolute poverty while few Canadians do.

The Extent of Canadian Poverty

Approximately 4.4 million Canadians live below the "poverty line," that point below which
people spend approximately 55% of pre-tax income on food, clothing, and shelter. A recent
United Nations report has criticized Canada for making no measurable progress in alleviating
poverty. A "wealthy" society finds 2 million people regularly making use of food banks and soup
kitchens.
Who are the Poor
Age
Children are more likely to be poor than any other age group. 15.6% of people under the age of
eighteen are officially classified as poor. Figure 11-5 (p. 273) would suggest that the initial
entrance status of immigrants to Canada is on average very low but improves over time as they
acculturate to Canadian society.
The poverty rate for the elderly has been declining but as the boomers retire, we will see a rise in
the absolute number of elderly poor.

Race and Ethnicity

While British and French-background Canadians are not at the top of the income categories as
measured by average male income (Welsh, Scottish, Jewish, and Japanese are higher) blacks,
West Indians, Latin Americans, some Asian groups and Natives are clearly near the bottom. As
the Applying Sociology Box (p. 268) makes clear, however, Native people, although in
aggregate are at the bottom, they are represented in every class level in Canadian society.
Marxist-oriented researchers in Canada have studied the development and consequences of
Canada's branch-plant ECONOMY, the process of "de-industrialization," the heavy investment
of both foreign multinationals and Canadian-owned corporations in the Third World and the
exploitation, in Canada, of staple raw materials for export, which incurred a dependence on
export markets beyond the control of local capitalists and workers. Other research of this kind
indicates that there has been a long-term trend in industrialized countries of a rise in the rate of
surplus value, and that owners in various industries have stood together to try to enforce low
wages. Studies have also shown that Canada's petite bourgeoisie has declined to a small
proportion of the labour force (eg, from 12% in 1951 to about 6% in 1986), that the working
class has remained fairly stable over recent years (approximately 86% in 1951 and 90% in 1986),
and that the capitalist class has grown slightly (2% in 1951 to about 3% in 1986). There is also
evidence that the capitalist class has evolved into a class of investment capitalists, with stock
ownership but limited managerial control. At the same time, a large category of top-level
managers has been formed.
Non-Marxist researchers have discovered that, by the occupational criterion, Canada has a large
and growing middle class of white-collar workers (eg, 25% of workers in 1921, 55% in 1986); a
smaller and rather stable blue-collar sector (eg, 31% in 1921, 40% in 1986); and fewer workers
in the primary sector (fishing, logging and mining) and in agriculture (the number of workers in
agriculture declined from 33% in 1921 to 4% in 1986). In education, the middle category of
those with some secondary-school education is the largest (48% for males and 51% for females
in 1986). The category of those with some post-secondary training had grown to 21% for males
and 22% for females in 1986. Studies of income distribution reveal that the top 20% of
individual income earners receive about 40% of all earned income while the bottom 20% receive
only about 4% of all income (see INCOME DISTRIBUTION). Further studies have shown that
the attainment of income, education and occupational prestige are related to the social class of
parents and to region and ethnic origin. Also, it has been found that people with better
occupations, income and education have better life expectancies, better health, use medical
facilities more, belong to more clubs and organizations, vote more frequently and have fewer
children. A study by Wigle and Mao has found, from data on 21 metropolitan areas in Canada,
that the life expectancies at birth of men living in the most affluent areas of the cities were 6.2
years longer than those for males from the least affluent areas. The comparable figures for
females showed less difference, however, at 2.9 years. What accounts for the income-life
expectancy association is still a matter of debate.

A synthesis of Marxist and non-Marxist approaches to social class may eventually emerge
because researchers from each tradition are now beginning to study the types of inequality
emphasized by the other. This should result, fortunately, in different terms being used for the
categories identified in each approach. "Social class" or "class" is increasingly being reserved for
the types of distinction described by Marx, while the term "socioeconomic status" will likely
apply to differences in income and occupational prestige.
Technology of Canada

The technological and industrial history of Canada encompasses the country's development in the
areas of transportation, communication, energy, materials, public works, public services (health
care), domestic/consumer and defense technologies. Most technologies diffused in Canada came
from other places; only a small number actually originated in Canada. For more about those with
a Canadian origin see Invention in Canada.
The terms chosen for the "age" described below are both literal and metaphorical. They describe
the technology that dominated the period of time in question but are also representative of a large
number of other technologies introduced during the same period. Also of note is the fact that the
period of diffusion of a technology can begin modestly and can extend well beyond the "age" of
its introduction. To maintain continuity, the treatment of its diffusion is dealt with in the context
of its dominant "age". For example the "Steam Age" here is defined as being from 1840 to 1880.
However steam powered boats were introduced in 1809, the CPR was completed in 1885 and
railway construction in Canada continued well into the 20th century. To preserve continuity, the
development of steam, in the early and later years, is therefore considered within the "Steam
Age".
Technology is a major cultural determinant, no less important in shaping human lives than
philosophy, religion, social organization, or political systems. In the broadest sense, these forces
are also aspects of technology. The French sociologist Jacques Ellul defined la technique as the
totality of all rational methods in every field of human activity so that, for example, education,
law, sports, propaganda, and the social sciences are all technologies in that sense. At the other
end of the scale, common parlance limits the term's meaning to specific industrial arts.

Information Technology Association of Canada (or Association canadienne de la technolgie de

l'information) is an advocacy group representing members (companies) of Canada's information
and communications technologies (ICT) industry.
ITAC is the voice of the Canadian information and communications technologies (ICT) industry
in all sectors including telecommunications and Internet services, ICT consulting services,
hardware, microelectronics, software and electronic content. ITAC's network of companies
accounts for more than 70 per cent of the 579,000 jobs, $137.6 billion in revenue, $5.2 billion in
R&D investment, $22.6 billion in exports and $11.5 billion in capital expenditures that the
industry contributes annually to the Canadian economy.
Sectors represented include:
 Telecommunications and Internet services
 ICT consulting services
 Hardware
 Microelectronics
 Software
 Electronic content
Promoting growth in the ICT industry, ITAC policy and advocacy currently covers:
 Cyber security and privacy
 Environmental issues
 Finance and taxation
 Government procurement
 Healthcare and ICT
 Innovation / commercialization
 International trade
 Lawful access
 Outsourcing / Offshoring
 Productivity
 Scientific Research and Experimental Development Tax Credit Program (SRED)
 Telecom infrastructure

Killing Machines I: Artillery and machine guns (1914 – 1918)

WWI invention and innovations included the variable pitch propeller, developed by Wallace
Rupert Turnbull, the gas mask, invented by Dr. Cluny MacPherson of the Royal Newfoundland
Regiment, the "Nissen Hut", invented by Peter Norman Nissen in 1916, the Curtiss Canada
bomber and the ill-starred Ross rifle. Attempts were made to convert the latter to what became
known as the Huot automatic rifle but the war ended before it could be introduced.
The Automobile Age: Cars, planes and radios (1920 – 1950)

In the early twentieth century, several dozen individuals and small businesses located mostly in
southern Ontario experimented with automobile innovation. One of these, Samuel
McLaughlin of Oshawa, eventually became the basis for General Motors of Canada. S. L. C.
Coleman of Fredericton, New Brunswick invented the sway bar, a device to improve the
suspendion of automobiles, in 1919. The dump truck was invented in Saint John, New
Brunswick in 1920 by Robert T. Mawhinney. In Montreal Alexis Nihon invented the tubeless
tire.

It was within this context that Joseph Bombardier in Quebec invented his automobile for the
snow or "snowmobile" and founded the Bombardier company. This corporation would become a
giant of Canadian industrial research in the latter part of the century. In 1925, Arthur Sicard of
Sainte-Thérèse, Quebec, invented the snow blower.

Experiments with electrical sound recording by microphone were undertaken by Horace Owen
(born Hamilton, Ontario, 1888 died Ottawa 1972) and Lionel Guest in 1919.

This period also saw the development of the "batteryless" radio in Toronto by Edward S. Rogers,
Sr. and further innovations in radio by Canadian Marconi Company in Montreal. Experiments in
television transmission were conducted there by Alphonse Ouimet in Montreal in 1932. In 1937,
Donald Higgs invented what would become the Walkie-talkie.

On the domestic scene, Herbert McCool invented Easy-Off Oven Cleaner in Regina in
1932[3] and Frederick F. Tisdall, M.D., T. G. H. Drake, M.B., Pearl Summerfeldt, M.B., and Alan
Brown, M.B. of the Hospital for Sick Children in Toronto, invented pablum in 1930.

Eli Franklin Burton along with students James Hillier, Cecil Hall and Albert Prebus invented
the electron microscope at the University of Toronto in 1938 and Hugh Le Caine invented the
music synthesizer in 1945. The forties also saw Frank Forward invent techniques for refining
nickel and cobalt.

However it terms of scale, nothing could match the giant of Canadian innovation throughout the
late 19th and first half of the 20th century, the Canadian Pacific Angus Locomotive Works of
Montreal. This huge enterprise designed, developed and built many of the steam engines for the
great Canadian Pacific Railway Company.

Killing Machines II: Bombers, tanks, corvettes and radar (1939 – 1945)

WWII saw science and industry harnessed to fight the enemy. The National Research
Council (NRC), created during WWI to advise the government on industrial research, grew
exponentially as did Canadian war industries. A tight bond was formed between the two.
The NRC itself helped develop radar, the proximity fuse, the explosive RDX, high velocity
artillery, fire control computers and submarine detection equipment among other things. The
NRC Examination Unit innovated in the field of cryptology. The NRC's Atomic Energy Project
ushered in the Atomic Age with the development of the world's most powerful research reactor
(NRX), as well as the start-up of the first reactor outside the United States (ZEEP), at its Chalk
River Nuclear Laboratories (see below).[4]

The Crown Corporation, Turbo Research (Orenda) a top secret jet engine development enterprise
was established in 1944 at Leaside, near Toronto to develop jet power plants including the TR.1,
TR.2, TR.3, and TR.5, for RCAF aircraft.

Enterprises such as the Ford Motor Company of Canada developed and built special purpose
military transport vehicles. Polymer Corporation of Sarnia, Ontario pioneered new types of
synthetic rubber.Canadian Industries Limited in Montreal formulated new types of explosive
and Canadian Marconi Company innovated in the new field of radar. Northern Telecom (Nortel)
developed telecommunications equipment. Ship building companies on the east and west coast
adapted US and British designs and construction techniques for the mass construction of
ships. Wilbur R. Franks invented the aviation anti-blackout suit in Toronto and experiments in
germ and chemical warfare were conducted at Grosse-Isle, Quebec and what is now CFB
Suffield, Alberta.

Specialized government businesses such as Research Enterprises Limited (1940) developed and
manufactured what would now be called "high tech" products, including optical systems and
communications devices.

Secret arrangements with Britain and the US, resulting from the Tizard Mission, saw Canadian
industry participate in the development of the atomic bomb, notably through the innovation of
uranium refining techniques. Under the aegis of the National Research Council, a top-secret
nuclear laboratory was established at the University of Montreal in 1942. Subsequently the top-
secret Chalk River Laboratories nuclear research facility was built at Chalk River, Ontario, and it
was here that the ZEEP atomic pile went critical in 1945, making Canada the second country in
the world after the US to build a nuclear reactor.[5]

The Television Age: TV, nuclear weapons, atomic energy, and computers (1950 – 1980)

After the war a number of innovators including Electrohome of Kitchener, Ontario, offered
televisions and entertainment systems to consumers. In the fifties Anthony Barringer invented
INPUT, an electromagnetic device used for the aerial detection of mineral deposits.

The Toronto area saw the creation of a naissant military industrial complex around the design of
jet aircraft. AVRO Canada developed the Avro Canada Jetliner and the CF-100 jet fighter. The
Orenda (Orenda Aerospace) jet engine factory developed jet power plants for the new aircraft.
The scale of this undertaking grew dramatically with the development of the huge CF-105 long
range high altitude interceptor and its associated Velvet Glove air-to -air missile and came
crashing to the ground just as quickly when the project was cancelled in 1959. At the same time,
with financing from the US, AVRO was developing the Avro Arrow Avrocar, a supersonic
fighter based on a flying saucer design. However the project collapsed when the costs became
unreasonably high.

East coast shipbuilders continued to innovate with the construction of new classes of warship
such as the St. Laurent class destroyer and Restigouche class destroyer. The Royal Canadian
Navy developed the innovative HMCS Bras d'Or (FHE 400) but the vessel was not introduced
into service. In Ottawa, the Defence Research Board, with the support of industry developed
Canada's first satellites the Alouette 1 and Alouette 2, as well as the Black Brant (rocket). In the
sixties and seventies Gerald Bull experimented with long range artillery. Agent Orange (the
herbicide) was tested by the US Army at Gagetown New Brunswick from the early fifties to the
nineties.

There were also developments in civil aviation. In the fifties De Havilland Canada developed
bush planes and later in the sixties and seventies STOL aircraft. CAE innovated in the field of
aircraft simulators and Pratt and Whitney Canada developed its signature PT-6 series of aircraft
engines. Telesat Canada pioneered the development of the domestic Anik (satellite) series of
spacecraft for communications. In the field of nuclear energy, Atomic Energy of Canada
Limited, developed its CANDU series of atomic power reactors.

Canola was developed in Canada from rapeseed during the seventies by Keith Downey and
Baldur Stefansson and is used to produce oil that is low in erucic acid and glucosinolate It has
become a major cash crop in North America. A strain of canola with additional modification that
made it resistant to herbicide was introduced in Canada in 1996.

John Hopps invented the artificial pacemaker for heart patients, in Toronto in 1951 and Harold
Elford Johns t Laboratories in Toronto innovated techniques for the mass production of the Salk
vaccine. Nordion developed medical radio isotopes.

Gerald Heffernan invented what is known as mini-mill steel manufacturing. In the US, Canadian
Lewis Urry working for the Eveready Company invented the alkaline battery and lithium battery.
Also in the US, Canadian Willard Boyle working at the Bell Labs invented the charge-coupled
device (CCD) which became the key technology for digital photography and improved
astronomical telescopes.

Innovations in the pulp and paper industry have been made by the Forest Engineering Research
Institute of Canada and the Pulp and Paper Research Institute of Canada, both located in Pointe-
Claire, Quebec, Canada.
The PC Age: The Microchip and Mobile Communications (1980 – 2000)

The latter part of the twentieth century has been notable for developments in information
technology, telecommunications and pharmaceuticals.

Canadian companies were early innovators in the PC field with models like the Hyperion. AES
developed the word processor. The federal government became involved with its Telidon video
text service based on the (North American Presentation Level Protocol
Syntax) NAPLPS standard. Chip makers, such as ATI Technologies, developed powerful video
cards for computer games. Business intelligence, and cinematic special effects software products
developed by companies like Alias Research (Alias Systems Corporation) of Toronto formed in
1983, have enjoyed great success, as have a number of consumer oriented offerings
including Corel Draw, software by Delrina Corporation of Toronto and many electronic games.

Northern Electric maintained its innovative pace, becoming Northern Telecom, and through part
ownership in Bell-Northern Research became a leader in the development of digital switching
and other communications technologies.

Pharmaceutical companies such as Pfizer Canada Inc., GlaxoSmithKline Inc., Merck Frosst
Canada Ltd., Biovail Corporation, AstraZeneca Canada Inc. and Sanofi pasteur Limited invested
hundred of millions in drug research.

Space research and development produced the Canadarm 1 and Canadarm2 for NASA
and RADARSAT-1 and RADARSAT-2. The NRC and Hughes developed and build MSAT, the
mobile communications satellite in 1995.

Creative Canadians have also invented the IMAX cinema and improved deep diving suits, such
as the Newt Suit developed in 1987. Ballard Power Systems in Vancouver has produced a
number of innovations in fuel cell technology. Michael Brook invented the "Infinite Guitar" in
1987.

Military innovations have included the Halifax class frigate, LAV III light armoured vehicle, Air
Defense Anti-Tank System, the CRV-7 rocket and secure communications systems. The US Air
Force tested cruise missiles in western Canada in the eighties.

The Internet Age: Wireless Technology, Mega Oil and Ecological Friendliness (2000 –
Present)

The best known Canadian invention of recent years is surely the BlackBerry, by Research in
Motion of Waterloo, Ontario, which has become the fashionable communications tool of
business people and more recently, consumers, through the introduction of its Pearl smartphone,
around the world.[6] In 2001, the Faculty of engineering at the University of Sherbrooke created
the Adaptive Multi-Rate Wideband (AMR-WB) speech compression algorithm. This technique
has become the basis for the world standard in cell phone voice quality. [7]
The first web search programme, "Archie" (Archie search engine) was developed by Alan
Emtage a student at McGill University in 1990. Early in the 21st century the internet reached its
stride and contributed significantly to Canadian industrial research efforts through its use in the
formation of networks such as CANARIE. Industrial software makers
including Cognos and Open Text Corporationhave had continued success in the field of business
intelligence software and enterprise content management software, respectively. In 2007, D-
Wave Systems a company located in Burnaby, British Columbia demonstrated the Orion, which
it claims to be the world's first quantum computer. [8] There are studies in quantum computing
technology at the Institute for Quantum Computing, in Waterloo, Ontario.

In the field of pharmaceuticals and biotechnology, companies such as Apotex and Winnipeg
based Cangene Corp., have become world leaders in the development of generic drugs and
biopharmaceuticals respectively.

In 2008, AECL introduced the Advanced CANDU Reactor (ACR-1000) atomic power reactor
and Nordion the develop the unsuccessful Multipurpose Applied Physics Lattice
Experiment (MAPLE) atomic reactor, intended for the production of medical isotopes. this
cancellation was one of the factors leading to a shortage of medical isotopes in 2007 and 2009.

The beginning of the 21st century is also notable for the rise of research in the field
of nanotechnology. About 140 small to medium sized firms based in Vancouver, Calgary,
Toronto, Ottawa and Montreal are researching products in this field, some privately funded and
others supported by the National Institute for Nanotechnology in Edmonton.

In 2008 the Zenn (zero emission no noise) light electric car, manufactured at Saint-Jerome,
Quebec and the Nemo light electric truck built at Sainte-Therese, Quebec, were introduced to the
Canadian and international market.[9]

Two Canadian contestants in the X-Prize competition (X Prize Foundation) have made attempts
to construct manned sub-orbital space craft. To date these vehicles have not flown. Since 1998,
the Mars Society has experimented with procedures related to the establishment of human life on
Mars at its simulated base located at Haughton Lake on Devon Island. In 2008, Odessey Moon,
based on the Isle of Man announced plans to build the Moon I (M-1) space craft with
MacDonald Detwiller and Associated Ltd. of Richmond BC, as prime contractor, as a competitor
in the Google Lunar X PrizeChallenge.

Military research in Canada has been championed by Defence Research and Development
Canada, created in 2000 as the result of the reorganization of the Defence Research Board of
Canada.

The government of Canada has put into place tax programmes to encourage industrial R&D.
Today industrial research accounts for about 50% of all research spending in Canada.
environmental

Canada receives a “C” grade on environmental performance and ranks 15th out of 17 peer countries.

Canada’s success in improving its environmental performance has been mixed. It has improved air quality,
reduced its energy intensity, and increased the growth of forest resources relative to forest harvest. But
Canada must do more to lower greenhouse gas emissions, to use its freshwater resources more wisely, and to
reduce waste.

To improve its overall performance, Canada must promote economic growth without further degrading
the environment, partly by encouraging more sustainable consumption.

Circling the globe just below the Arctic region in Canada, Alaska, Russia, and Scandinavia, the global
Boreal Forest is the world’s largest land reservoir of carbon. This “carbon bank” stores 22 percent of all
carbon stored on the earth’s land surface, and almost twice as much carbon per unit area as tropical forests.

Canada’s Boreal Forest stores an estimated 208 billion tons of carbon in its widespread forest and peat
ecosystems—the equivalent of 26 years worth of global carbon emissions from the burning of fossil fuels at
2006 levels. It also sequestered an average of 205 million tons of carbon per year between 1920 and
1989, roughly equivalent to Canada's annual emissions.

Fire and insect depredation are a natural and critical part of a healthy Boreal ecosystem, but global warming
already is exacerbating this natural cycle, causing increased greenhouse gas emissions. Industrial activity
also increases emissions by removing forest biomass, changing hydrology, and physically damaging soils.
While carbon emitted by natural processes varies year to year, we must limit emissions resulting from human
activity.

Letting the Carbon Out of the Bank

Logging in Canada releases on average 33 million tons of carbon into the atmosphere each year, not
counting carbon stored in harvested wood products. This is equivalent to approximately 16 percent of
Canada’s annual greenhouse gas emissions.

Oil and gas activities and peat extraction release significant amounts of stored carbon into the atmosphere. In
the Alberta Tar Sands, an oil deposit covering a region the size of Florida and second in size only to the oil
reserves of Saudi Arabia, oil production not only deforests land, disturbs peat and wetlands, and changes
local hydrology, it also generates almost three times as much greenhouse gas per barrel as conventional oil
production. Greenhouse gas emissions from Tar Sands production are projected to increase by approximately
500% by the year 2016.

Peat extraction in Canada emitted 7.74 million tons of carbon between 1990 and 2000, mostly due to the
decomposition of extracted peat after being removed from this secure carbon pool. Large scale drainage and
flooding of peat lands for mining or hydroelectric development also results in substantial emissions from this
otherwise long-lived carbon pool.
Protect the Carbon

Proper planning by Canadian governments can ensure protection of this ecosystem and the species that
depend on it—while maintaining its carbon storage benefits. The Boreal Forest Conservation Framework,
supported by conservation, industry, and First Nations organizations, sets out a vision to protect 50% of the
Boreal in large interconnected areas, and is the only proposal that ensures a large portion of the ecosystem
and the carbon stored there is protected.

Putting Canada’s environmental health in context

The Conference Board’s overarching goal is to measure quality of life for Canada and its peers.
But a country must not only demonstrate a high quality of life—it must also demonstrate that its
high quality of life is sustainable.

There is growing recognition that gross domestic product (GDP) produced at the expense of the
global environment, and at the expense of scarce and finite physical resources, overstates the net
contribution of that economic growth to our prosperity. Canadians understand that protecting the
environment from further damage is not a problem for tomorrow, but a challenge for today.
Without serious attention to environmental sustainability, Canada puts its society and its quality
of life at risk

How does Canada measure up?

Canada ranks 15th out of 17 peer countries and scores a “C” grade on its environmental
performance report card. Canada’s poor record in several areas—including climate change,
smog, and waste generation—drags down its comparative performance. Only Australia and the
U.S. rank below Canada.

Sweden, Finland, Norway, and Switzerland get “A” grades, showing clear leadership in
environmental performance.

The radar diagram below is a snapshot of Canada’s environmental performance (and the 17-
country average performance) relative to that of the best-performing peer country—the outer ring
—for each of the 15 environment indicators. The chart has 15 axes—one for each indicator—that
radiate out from the centre. A score of 0 represents the worst performance. A score of 100
represents the best.

Compared with the 17-county average, Canada’s performance is above average on seven
indicators:

• use of forest resources

• low-emitting electricity production
• Water Quality Index
• urban particulate matter (PM10) concentration
 • urban nitrogen dioxide (NO2) concentration
• threatened species
• energy intensity

Canada’s performance is below average on eight indicators:

• forest cover change

• urban sulphur dioxide (SO2) concentration
• Marine Trophic Index
• greenhouse gas (GHG) emissions
• water consumption
• organic farming
• volatile organic compound (VOC) emissions
• municipal waste generation

Canada ranks below the best-performing country on all of the environmental indicators. Canada
receives its only “A” grade for use of forest resources. Canada earns “D” grades on six
indicators: VOC emissions, municipal waste generation, water consumption, organic farming,
the Marine Trophic Index, and GHG emissions.

Do geography and industrial structure affect environmental performance?

They matter. The three countries that rank lowest in the overall ranking are the U.S., Australia,
and Canada. Not only are they among the most resource-intensive economies in the Organisation
for Economic Co-operation and Development (OECD), but they are also the three largest
countries in terms of land area. They all rank poorly on water consumption, waste generation,
organic farming, Marine Trophic Index, and certain elements of air quality.

It’s difficult to target a single cause of their poor environmental performance. But resource
extraction and processing industries often use a lot of water and may contribute to greater
stresses on local air quality. A lower-than-average reliance on organic farming in the three
countries may also reflect greater reliance on large-scale mechanized farming. Further, greater
distances mean that greater amounts of energy are required to transport people and to move
goods to where they will be consumed, leading to greater GHG emissions.

Geography and industrial structure are hurdles to overcome—through technology, innovation,

efficiency, and behavioural changes—in improving Canada's environmental performance.

Air quality: Does Canada have clean air?

Although Canada scores relatively well on urban NO2 concentration and urban SO2
concentration, earning a “B” grade for each indicator, policy makers still need to address high
levels of air pollution in major Canadian cities. Air quality affects human health, ecosystems,
and buildings—often with far-reaching economic and social consequences. Human exposure to
air pollution is high in urban areas where economic activities and road traffic are concentrated.

Increasing air quality concerns are urban particulate concentrations, toxic air pollutants, and
acute ground-level ozone pollution. Canada ranks 7th out of the 17 peer countries for urban PM10
concentration, and earns a “B” grade. But Canada is the worst performer for VOC emissions.
VOCs—produced from vehicle emissions and chemical manufacturing—combine with nitrogen
oxides to produce smog and ground-level ozone, resulting in a number of health impacts.

The main challenge for Canada is to further reduce urban and regional air pollutants through
pollution control policies, technological progress, energy savings, and sustainable transportation
policies.1

Waste: Is Canada a throwaway society?

Municipal waste contributes to environmental problems such as habitat destruction, surface and
groundwater pollution, and other forms of air, soil, and water contamination. Canada earns a “D”
for municipal waste generated per capita and ranks last among its peers. In 2005, Canada
generated 791 kilograms of municipal waste per capita, well above the 17-country average of
610 kg per capita. Compared with Japan, the top-performing country for this indicator, Canada
generated almost double the municipal waste per capita.

Of the 12 million tonnes of waste generated by Canadian households in 2002, 9.5 million tonnes
went to landfills or incinerators. The rest was diverted through recycling, reuse, or composting. 2
Landfilling is the most common way to dispose of waste in Canada. But landfills emit methane
(a GHG that contributes to climate change), and the leachate from landfills causes groundwater
and surface water contamination. Therefore, reducing the damage to the environment of
municipal waste generation in Canada requires minimizing waste, increasing waste recycling and
recovery, and disposing of any remaining waste in an environmentally benign manner.

The amount of municipal waste generated in a country is related to the rate of urbanization, the
types and patterns of consumption, household revenue, and lifestyle choices. In Canada and
across the OECD, real GDP and average household disposable income have been steadily
increasing since the 1980s, leading to increasing household consumption rates. Canada cannot
keep growing its economy at the expense of the environment. Encouraging sustainable
consumption patterns will continue to be a challenge.

Water quality indicators: Is Canada’s water at risk?

The health and well-being of ecosystems depends heavily on the quality and quantity of water
resources. Water is essential for agriculture, livestock production, fisheries and aquaculture,
municipalities, and industry. Water quality can be negatively affected by water pollution
(eutrophication, acidification, toxic contamination) on human health, on ecosystems, and on the
cost of treating drinking water. The Water Quality Index—which measures dissolved oxygen,
pH, conductivity, total nitrogen, and total phosphorus—is used as indicator of eutrophication,
nutrient pollution, acidification, and salinization.
Canada ranks 6th out of 17 peer countries and earns a “B” for water quality. The Nordic countries
rank ahead of Canada and earn “A”s. Canada’s water quality is at risk from industrial effluent,
agricultural runoff and municipal sewage. Although waste-water treatment plants have helped to
improve water quality, municipal waste-water discharges are still one of the largest sources of
pollution in Canadian waters. As a result, eutrophication is a serious water quality issue for the
Prairie provinces, southern Ontario, and southern Quebec. The increase in toxic algal blooms in
Canadian lakes and coastal water is also a risk to human health. And the drinking water guideline
for nitrate has been exceeded in groundwater across Canada.

Water consumption is also a key environmental issue; it relates to low river flows, water
shortages, salinization of freshwater bodies in coastal areas, human health problems, loss of
wetlands, desertification, and reduced food production. Sustainable water management is
required to maintain adequate water supplies for people and ecosystems.

Water consumption is measured using gross freshwater abstractions—or withdrawals—per

capita as an indicator. Canada receives a “D” for water consumption—Canada’s water
withdrawals are more than double the 16-country average. Canada uses more than nine times the
amount of water per capita than the U.K., which receives an “A.” Only the U.S. ranks behind
Canada on this indicator.

Biodiversity and conservation: Is Canada protecting its forests and wildlife?

Biodiversity and the habitat and ecosystem services that biodiversity provides are increasingly
recognized as an important component of sustainable development. Protected areas have grown
in most OECD countries; however, pressures on biodiversity and threats to global ecosystems
and their species are increasing. Consequently, many natural ecosystems have been degraded,
limiting the ecosystem services they provide.

Canada scores a “B” on threatened species as a percentage of total known species in the country.
Canada’s vast uninhabited forests, wetlands, and tundra regions support a wide range of plant
and animal life and will continue to be protected by sheer remoteness. However, the quest for
natural resources is increasing in intensity, and developers are looking farther afield for
opportunities.

Forests provide habitat for wildlife, clean air, carbon sequestration, clean water, and flood
control. Canada’s forest cover is key to biodiversity, as it provides habitat for two-thirds of
Canada’s wildlife. Canada rates a “B” on the forest cover change indicator, which measures the
percentage gain or decline in forest cover from 2000 to 2005. Countries such as Ireland, Italy,
Denmark, and the U.K., expanded their forest coverage over the same period and earned “A”s.
Canada’s “B” reflects its ability to maintain (but not increase) its forest cover. It does, however,
perform better than Australia and Japan, both of which lost forest cover from 2000 to 2005.

The fact that Canada’s forest land inventory has remained constant since 1990 indicates that land
use within the forest is not changing. Canada’s ability to maintain its forest cover—despite
having the most extensive forestry harvests of its peer group—is largely because of the extensive
licensing system that oversees the forest industry and because of the industry’s own efforts to
ensure good practices through forest certification.

Canada’s stable forest land inventory also bodes well for habitat preservation, as long as forestry
policy ensures the protection of wildlife. Although aggregate numbers indicate healthy
biodiversity, the impact of urban sprawl and agricultural land and forest use on wildlife habitat
needs to be monitored at a regional level. Protective measures and policy vigilance are
particularly important in places where specific species are threatened.

Natural resources management: Are Canada’s resource practices sustainable?

Productive natural resources such as forests, soil (for agriculture), fresh water, and fisheries are
crucial to Canada’s economic activity. Unsustainable agriculture practices can contribute to soil
nutrient depletion, erosion, and water pollution. Fisheries are also being depleted because of
unsustainable industrial fishing practices and a lack of a global regulatory framework to support
sustainable fishing.

Area under organic farming as a percentage of total agricultural land is the indicator used to
measure sustainable agriculture. According to the OECD, organic farming avoids the use of
artificial fertilizers, pesticides, or herbicides, and uses organic manure and organic methods of
crop rotation.5 Canada earns a “D” because organic agricultural land represents only 0.9 per cent
of Canada’s total agricultural land. In comparison, European countries such as Austria and
Switzerland have a 13 per cent and 12 per cent organic share in total agricultural area,
respectively. These scores earn them “A”s. Organic farming is gaining momentum in Canada.

Canada is one of the best performers for the intensity of use of forest resources. It gets an “A” for
performance on this indicator. Only Japan ranks ahead of Canada, with a lower percentage of
timber cut relative to forest growth. In Canada, 90 per cent of the forest area harvested is clear-
cut, and most timber harvesting in Canada occurs in primary or old-growth forests. However,
Canada has the world’s largest area of forest certified to third-party sustainable forest
certification. Sustainability certification means harvesting at a rate that is at or below the rate of
re-growth and replacement, suggesting that the harvest can continue over the long term.

The Marine Trophic Index6 serves as a proxy measure for overfishing. By examining the change
in the Marine Trophic Index over time, we can measure the degree to which a county is altering
the fish stocks in the marine ecosystem. Canada’s fish resources have been declining since the
1970s. More recently, Canada receives a “D” because of a decline in the Marine Trophic Index
over 2000 to 2005. Belgium is the only OECD country to receive an “A” for improving its
Marine Trophic Index, although five other countries also achieve a positive index for this period.
Only Australia, Germany, and Italy rank behind Canada on this indicator.
Climate change and energy efficiency: Has Canada made progress against climate
change?

Finding adequate and comparable measures for climate change poses a significant challenge. It is
not possible to obtain a reasonable national indicator of the effects of global climate change
because it is a major global issue that requires a policy response from Canada and the other peer
countries. A proxy indicator has thus been used: greenhouse gas (GHG) emissions per capita.

Canada, one of the world’s largest GHG emitters, earns a “D” for its GHG emissions per capita.
In 2005, Canada’s GHG emissions were 22.6 tonnes per capita—almost double the 17-country
average of 12.4 tonnes per capita. Canada’s GHG emissions per capita have increased, rising
from 17.1 tonnes per person in 1990 to 22.6 tonnes per person in 2005.

The primary reason for the increase is growth in such exports as petroleum, natural gas, and
forest products. While these commodities are exported, the GHG emissions resulting from their
production are not. Between 1990 and 2005, emissions related to exports increased by more than
55 per cent, while Canada’s population grew by less than 15 per cent. Most of our mining, forest,
and oil sands products are exported to other countries—which receive implicit CO2 benefits from
the highly CO2-intensive production in Canada. Although Canada’s total GHG emissions
represent only 2 per cent of worldwide GHG emissions, there is significant room for
improvement through increased energy efficiency and the use of lower-emitting technologies.

Boosting renewable energy as a share of total energy consumption should be a policy goal for
climate change mitigation in Canada. Renewable sources of energy—wind, tidal, solar, biomass,
hydroelectric, and geothermal—produce low amounts of GHG emissions. In 2006, almost 75 per
cent of Canada’s electricity was produced from low-emitting sources (renewable, plus nuclear).
Because of Canada’s expansive hydro resources, Canada does well on this indicator and receives
a “B” for performance. Canada could do more, however, to increase its share of low-emitting
electricity production in total electricity production. For example, almost all of Norway’s
electricity is generated from renewable hydroelectric sources, earning Norway an “A.”

A change in total energy consumption (measured in millions of tonnes of oil equivalent, or toe)
per unit of GDP over a specified time period can be used as an indicator for energy efficiency
and progress on climate change. Canada receives a “B” for decreasing its energy intensity over
2000 to 2005, ranking 6th out of 17 peer countries. In 2005, however, Canada still used 0.27 toe
per US$1,000 of GDP, significantly more than the OECD average of 0.18 toe per US$1,000 of
GDP. Ireland earns an “A” for decreasing its energy intensity and is the best performer on this
indicator, followed by Sweden, the U.K., and the United States.

Has Canada’s environmental performance improved?

Canada’s environmental performance has improved for several of the environment indicators and
deteriorated for others. Historical data were available for 10 of the 15 environment indicators,
spanning five of the six environment dimensions. The Conference Board ranks the change in
performance on each environment indicator as “better,” “worse,” or “no change” (rather than A-
B-C-D) and uses absolute performance (rather than relative performance, as in other main report
card categories).

Canada’s environment performance improved for the air quality indicators and for some of the
natural resources management and climate change and energy-efficiency indicators. But progress
on these issues has been hindered by increases in municipal waste generation and GHG
emissions per capita and a declining Marine Trophic Index.

The overall air quality in Canadian cities has generally improved since the early 1990s, and
Canada’s performance on the air quality indicators is also getting better. Annual average NO2
emissions per capita fell by 15 per cent between 1990 and 2005. Over the same period, SO2
emissions per capita dropped by 44 per cent, while VOC emissions per capita fell by 31 per cent
and urban PM10 concentrations fell by 24 per cent. But compared with the top-performing
countries—such as Germany, Belgium, and the Netherlands—Canada’s reductions in VOC
emissions per capita are modest. Similarly, Canada’s progress on reducing urban PM10
concentration lags the top-performing countries.

The amount of municipal waste generated per capita in Canada has been steadily increasing since
1980. Between 1990 and 2005, Canadians increased their municipal waste per capita by 24 per
cent. Although the quantity of municipal waste generated per capita has been rising since 1980
across the OECD, the amount of municipal waste generated in Canada has been well above the
OECD average.

Likewise, Canada’s GHG emissions per capita have been steadily increasing since 1990; they
were 32 per cent above 1990 levels in 2005. Since the 1970s, however, Canada has decreased its
energy intensity. Over 2000 to 2005 alone, Canada’s energy intensity decreased by 1.7 per cent
per year.

Canada’s historical performance on the natural resource management indicators shows progress
is being made to reduce the intensity of use of forest resources. A declining Marine Trophic
Index, however, suggests that Canada’s fish resources are still diminishing and that unsustainable
fishing practices prevail.
SOCIAL
Two general class models are used most often in describing the Canadian social structure
(Forgese, 1983). The first of these models is the pluralist, which holds that assimilation in the
Canadian social structure has occurred in such a way that, while ethnic, racial, and economic
divisions continue to exist, the dominance of a social elite has been eliminated. The second of the
models is the elite, which holds both that divisions remain within the Canadian social structure,
and that the Cana-dian social structure is hierarchical in character. This research reviews the
Canadian social structure, and, through this review, assesses the validity of the two models, as
accurate descriptors of the Canadian social structure.

Assimilation, generally, is defined as the process of incorporating various racial and ethnic
groups into a societyto which they have immigrated, in such a way that they mayhenceforth be
described by the characteristics of the society in which they have been assimilated, as opposed to
the charac-teristics of the societies from which they came (Gordon, 1964). On a formal level,
assimilation is a "process of interpretation

and fusion in which persons and groups acquire the memories, sentiments, and attitudes of other
persons or groups, and, by sharing their experience and history, are incorporated with them into a
common life"

he third major reason working against full assimila-tion in Canada is historical example. The
francophone minority in Canada (primarily Quebec) has not been fully assimilated, 4nor are
there in 1990, or have there ever been, any indications that francophones desire an assimilation
with anglophone Canada. Anglophone Canada has always sought francophone assim-ilation on
terms which would treat the francophones as virtual immigrants to Canada, and, for their part,
the francophones attempt to treat anglophones in a similar manner within the Province of
Quebec. A second historical example involves the native peoples of Canada. In attempts to
assimilate native populations into the Canadian social structure, both anglophone and
francophone Canada have wreaked havoc on native cultures in Canada. The Mulroney
government in Ottawa, in a fit of pique over the defeat of the Meech Lake Accord, and the
Bourassa government in Quebec City, in a typical example of francophone obstancy and
wrongheadedness, reinforced the historical treat-ment of Canada's native peoples, as they dealt
with the crises on Montreal's south shore.

This research reviews the Canadian social structure, and, through this review, assesses the
validity of two models often used to describe Canadian society, as accurate descriptors of the
Canadian social structure. The two models considered in this research are the class model, and
the elite pluralist model (Porter, 1965).

The class model assumes divisions within Canadian society along the lines of British society, in
which the working class, as an under class, is pitted against a business class, and even an upper
class aristocracy (Forgese, 1983). The elite plural-ist model recognizes the presence in Canadian
society of elites, and recognizes that classical democracy, as that ideal is embraced in the concept
of pluralism, does not exist in Canada. The elite pluralist model, however, holds that demo-cratic
values are preserved in Canada through a system of mul-tiple, competing elites (Forgese, 1983).
Within the concept of the elite pluralist model, competing elites determine public policy through
bargaining and compromise, while the voting rights of the masses enable new elites to gain a
share of the power within the Canadian social and political systems. Pure elitism is not generally
thought to exist within Canadian society (Porter, 1965).

CANADIAN SOCIETY AS ELITE PLURALIST,

Elite theory holds that an elite is comprised of a rela-tively few people within a society who have
and exercise power within that social system (Dye, & Ziegler, 19 evolt," on the one hand, and
"order and decency," on the other hand (Allen, 1961, p. 228). Opposing this view, working class
Canadians, social activists, and the Methodist Church viewed the Winnipeg General Strike as a
clash between "plutocratic greed and oppression," on the one hand, and "the rights of man," on
the other hand (Allen, 1961, p. 228). Over the seven decades since the Winnipeg General Strike,
the absolutes of 1919 have softened, and a widespread general consensus has developed, in
which it is recognized that (1) the principles for which the strike was waged were just, (2) the
demands of labour were reasonable, and (3) the reactions of the Canadian social elites of the day
to the strike demands, and to the strike itself were the sources of most of the trouble. That this
consensus view is generally correct is supported by the facts that (1) the most important demands
of labor and social activists made during the Winnipeg General Strike have been recognized and
enacted into law by government over the past 70 years, and (2) the political successor to the
forces behind the Winnipeg General Strike--the New Democratic Party--has emerged as a major
political force in Canada.
Among the legacies of the Winnipeg General Examines popular attitudes in Upper Canada
regarding social structure and the degree of social mobility that was thought possible during the
period from 1815 to 1840, when Upper Canada was viewed as a "poor man's country" where all
could "be laird" and prosper but was also characterized by a set of fixed social strata.

SOCIAL CLASSES IN CANADA

Despite the difficulty in clearly defining class levels in Canadian society because of low levels of
status consistency and the fluidity provided by social mobility, it is possible to think of four
general social classes in Canada.

The Upper Class

Perhaps 3 to 5% of Canadians fall into this class. Much of their wealth is inherited, their children
go to private schools and they exercise great power in occupational positions. Although this
group has historically been primarily of British origin, it is now more widely distributed.

Upper-uppers

One percent belong to an upper-upper level distinguished primarily by "old money".

Lower-uppers

The remaining 2-4% fall into the lower-upper level and depend more on earnings than inherited
wealth.

The Middle Class

Roughly 40-50% of the Canadian population falls into this category. Because of its size it has
tremendous influence on patterns of North American culture. There is considerable racial and
ethnic diversity in this class and it is not characterized by exclusiveness and familiarity. The top
half of this category is termed the "upper-middle" class with family incomes of $50,000 to
$100,000 earned from upper managerial or professional fields. The rest of the middle class
(average middles) typically work in less prestigious white-collar occupations or highly skilled
blue-collar jobs. According to the Social Diversity Box (p. 270) the middle class dominate the
Calgary Stampede.

The Working Class

This class comprises about one-third of the population and has lower incomes than the middle-
class and virtually no accumulated wealth. Their jobs provide less personal satisfaction.
The Lower Class

The remaining 20% of our population is identified as the lower class. In 2001 roughly 15% of the
Canadian population were labeled as poor. Many are supported entirely by welfare payments
while others are among the "working poor" whose incomes are insufficient to cover necessities
like food, shelter, and clothing. They typically live in less desirable neighbourhoods — often
racially or ethnically distinct — and their children are often resigned to living the same hopeless
lives of their parents. Recent government cut-backs on welfare in some provinces may lead to
even greater living constraints for this group of people.

Class, Family, and Gender

Family life tends to reproduce the class structure in each generation. Parents define children's
expectations and the middle-class clearly has higher educational and occupational expectations
of their children than the working class. The box on Exploring Cyber Society (p 266) posits the
possibility that exposure to home computers might give children an occupational advantage in
the information society. The children of the affluent are more likely to receive that exposure.
Spousal relationships also differ with more rigid role segregation in the working class as
compared to more egalitarian relationships in the middle class, which also contain more
emotional intimacy.

SOCIAL MOBILITY

Canada is characterized by a significant measure of social mobility. Social mobility can result
from personal achievement or structural change in the society itself. It can be upward or
downward and intragenerational or intergenerational. Intragenerational social mobility refers to
a change in social position occurring during a person's lifetime. Intergenerational social
mobility refers to upward or downward social mobility of children in relation to their parents.

Myth Versus Reality

Canadians have generally expected that each new generation will do better than the last. Recent
data suggest that while there is much upward and downward activity on balance not much shift
takes place between generations. Men experience more occupational inheritance than women and
education is the key to occupational mobility in Canada. Divorce is a good predictor of
downward social mobility for women but not men.

The Global Economy and Canadian Class Structure

The rates of social mobility in Canada have been much the same as other industrial societies; not
very extensive. The restructuring of the Canadian economy with manufacturing jobs moving
elsewhere and service jobs replacing them, leads fewer Canadians to expect that their children
will experience better standards of living than they experienced themselves. The late 1990s,
however, saw a dramatic decrease in unemployment because of an expanding economy.
POVERTY IN CANADA

Social stratification creates "haves" and "have-nots." The "have-nots" can experience relative
poverty, a deprivation in relation to those who have more, or absolute poverty, a deprivation of
resources that is life threatening. Roughly one in seven of the world's population lives in
conditions of absolute poverty while few Canadians do.

The Extent of Canadian Poverty

Approximately 4.4 million Canadians live below the "poverty line," that point below which
people spend approximately 55% of pre-tax income on food, clothing, and shelter. A recent
United Nations report has criticized Canada for making no measurable progress in alleviating
poverty. A "wealthy" society finds 2 million people regularly making use of food banks and soup
kitchens.

Who are the Poor

Age

Children are more likely to be poor than any other age group. 15.6% of people under the age of
eighteen are officially classified as poor. Figure 11-5 (p. 273) would suggest that the initial
entrance status of immigrants to Canada is on average very low but improves over time as they
acculturate to Canadian society.

The poverty rate for the elderly has been declining but as the boomers retire, we will see a rise in
the absolute number of elderly poor.

Race and Ethnicity

While British and French-background Canadians are not at the top of the income categories as
measured by average male income (Welsh, Scottish, Jewish, and Japanese are higher) blacks,
West Indians, Latin Americans, some Asian groups and Natives are clearly near the bottom. As
the Applying Sociology Box (p. 268) makes clear, however, Native people, although in
aggregate are at the bottom, they are represented in every class level in Canadian society.

Marxist-oriented researchers in Canada have studied the development and consequences of

Canada's branch-plant economy, the process of "de-industrialization," the heavy investment of
both foreign multinationals and Canadian-owned corporations in the Third World and the
exploitation, in Canada, of staple raw materials for export, which incurred a dependence on
export markets beyond the control of local capitalists and workers. Other research of this kind
indicates that there has been a long-term trend in industrialized countries of a rise in the rate of
surplus value, and that owners in various industries have stood together to try to enforce low
wages. Studies have also shown that Canada's petite bourgeoisie has declined to a small
proportion of the labour force (eg, from 12% in 1951 to about 6% in 1986), that the working
class has remained fairly stable over recent years (approximately 86% in 1951 and 90% in 1986),
and that the capitalist class has grown slightly (2% in 1951 to about 3% in 1986). There is also
evidence that the capitalist class has evolved into a class of investment capitalists, with stock
ownership but limited managerial control. At the same time, a large category of top-level
managers has been formed.

Non-Marxist researchers have discovered that, by the occupational criterion, Canada has a large
and growing middle class of white-collar workers (eg, 25% of workers in 1921, 55% in 1986); a
smaller and rather stable blue-collar sector (eg, 31% in 1921, 40% in 1986); and fewer workers
in the primary sector (fishing, logging and mining) and in agriculture (the number of workers in
agriculture declined from 33% in 1921 to 4% in 1986). In education, the middle category of
those with some secondary-school education is the largest (48% for males and 51% for females
in 1986). The category of those with some post-secondary training had grown to 21% for males
and 22% for females in 1986. Studies of income distribution reveal that the top 20% of
individual income earners receive about 40% of all earned income while the bottom 20% receive
only about 4% of all income Further studies have shown that the attainment of income, education
and occupational prestige are related to the social class of parents and to region and ethnic origin.
Also, it has been found that people with better occupations, income and education have better
life expectancies, better health, use medical facilities more, belong to more clubs and
organizations, vote more frequently and have fewer children. A study by Wigle and Mao has
found, from data on 21 metropolitan areas in Canada, that the life expectancies at birth of men
living in the most affluent areas of the cities were 6.2 years longer than those for males from the
least affluent areas. The comparable figures for females showed less difference, however, at 2.9
years. What accounts for the income-life expectancy association is still a matter of debate.

A synthesis of Marxist and non-Marxist approaches to social class may eventually emerge
because researchers from each tradition are now beginning to study the types of inequality
emphasized by the other. This should result, fortunately, in different terms being used for the
categories identified in each approach. "Social class" or "class" is increasingly being reserved for
the types of distinction described by Marx, while the term "socioeconomic status" will likely
apply to differences in income and occupational prestige.
Legal
Legal Structure for a PDF
| Print |
Canadian Business

Written by The Editors

Sunday, 07 June 2009 21:18

One of the first questions you will face when launching a new business in Canada is,
what legal structure should be used? Each of the options has good features and not-
so-good features which you need to know about before making your decision.

There are four basic types of legal structure for businesses in Canada:

1. Sole proprietorships
2. Partnerships
3. Corporations
4. Co-operatives

Summarized below are the features of each type of business structure, together with indications of
the positive and negative aspects of each. Deciding which form of structure to use for your new
business may be simple (i.e. a sole proprietorship for a part-time, home-based business which you
will operate alone), or it may be complicated (i.e. a business involving one or more employees
will raise issues of liability, control, access to capital, and complexity of record keeping).

A Note on Taxes

We mention in the summaries below that various structures may offer some tax advantages. What
these advantages may be will vary with the legal structure you choose for your business and with
changes in the Canada Revenue Agency rules.

Sole Proprietorships

Sole proprietorships are the simplest kind of business to set up. If the business is established in
the name of the proprietor without adding any other words, it is not necessary to register the
business.

This kind of business is regulated by the provinces and if you choose to carry on the business
under a name other than your own, you must register with the province (except in Newfoundland
and Labrador where only incorporated businesses are required to register with the Provincial
Registry of Companies and Deeds).

Advantages

• startup costs are low and little working capital is required

 • least amount of regulation/red tape
• you make all decisions
• there are some tax advantages
• all profits are yours

Disadvantages

• your liability is unlimited and you are fully responsible for all debts and
obligations of the business, so creditors have a right of claim against all your
business and your personal assets
• borrowing money for the business is difficult
• the business will only operate if you are present

Sole proprietorships are often the way individuals start home-based businesses, converting them
to one of the other legal structures when the business shows signs of succeeding.

Partnerships

Two or more people combining their skills and resources to start a business often form a
partnership by signing a partnership agreement (sometimes known as a “shareholders
agreement”).

General Partnerships
In a general partnership, all partners share in the management of the business and each partner is
personally liable for all the debts and obligations of the business. Because each partner is liable, it
is essential that you trust your partner(s) because you must assume the consequences of any
decisions your partner(s) make.

It is important to realize that a partnership, like a marriage, should not be entered into lightly.
Partners have wide apparent authority to personally bind the other partners.

Note, however, that a partnership agreement only governs the relationship between the partners,
and limitations on a partner’s actual authority will probably not affect dealings with third parties
who have no knowledge of the terms of the partnership agreement. Nonetheless, there is great
value in spelling out the relationship between the partners.

Limited Partnership
In a limited partnership, some partners control and manage the business (general partners) while
others contribute only capital and take no part in control or management (limited partners).
Limited partners are only responsible for a specified (limited) portion of the debts of the business,
while general partners are fully liable for all debt. In this arrangement, general partners are
normally given a larger share of the profits.

The partnership agreement form supplied with this kit is for a general partnership. If you are
contemplating forming a limited partnership, we recommend you seek legal advice as the
agreement document can be quite complex.

Like proprietorships, partnerships are regulated by the provinces and you must register with the
province (except in Newfoundland and Labrador where only incorporated businesses are required
to register with the Provincial Registry of Companies and Deeds).

Advantages

• startup costs are quite low and partners can share in supplying working
capital
• limited amount of regulation/red tape
• easy to form a partnership
• some tax advantages
• partners’ joint knowledge can benefit management decisions

Disadvantages

• liability is unlimited
• borrowing money for the business is difficult
• conflict between partners is a serious risk
• typically, no one person has complete and final authority to act
• suitable, compatible partners can be hard to find

Partnerships are often the way friends start small businesses, pooling their skills and knowledge.
Successful partnerships usually incorporate when the business shows signs of succeeding.

Corporations

Unlike a proprietorship or a partnership, a corporation is a legal entity that is separate from its
owners. The owners (shareholders) of a corporation are not personally liable for the acts,
obligations, or debts of the corporation.

There are different kinds of corporations:

Private Corporations
• formed by one or more people
• cannot sell securities or shares to the public
• a majority of the directors must be Canadian residents
• if none of the directors reside in the province in which the corporation does
business, the corporation must appoint a Power of Attorney who resides in the
province
Public Corporations
• issue securities for public distribution
• must distribute semi-annual financial statements
• must employ outside auditors
• must file a prospectus with the appropriate Securities Commission in the
province

Federal Corporations
A business operating nationally or in several provinces may find it useful to incorporate federally
under the Canada Corporations Act. Both private and public corporations can incorporate
federally.

Be aware that a federally incorporated business must still register in each province in which it
does business.

Advantages

• limited liability
• tax advantages
• easier to raise capital
• ownership can be transferred by selling shares
• ownership and management may be different

Disadvantages

• expensive to organize and closely regulated

• extensive recording keeping is a requirement
• dividends are double-taxed
• some charter restrictions

Co-operatives

A co-operative is a form of corporation which is organized and controlled by its members in a co-
operative business structure. The business structure involves open and voluntary membership
with control based on one member, one vote. Co-operatives are usually formed by members to
provide themselves and their patrons with goods, services, or other benefits through a pooling of
resources.

Advantages

• limited liability
• owned and controlled by members
• profits (any surplus earnings) distributed to members in shares or cash in
 proportion to their use of service

Disadvantages

• decision-making process can be long

• members must participate for the venture to succeed
• one member, one vote reduces incentive to invest additional capital
• extensive recording keeping is a requirement

• risk of conflict developing between members

Structure of the Courts

Outline of Canada's Court System

Supreme Court of Canada: The Supreme Court of Canada, our highest court, is based in
Ottawa and consists of nine judges chosen to represent the country's regions. The Supreme Court
has the power to review lower-court rulings on any legal issue but limits its docket to about 100
cases a year that involve issues of national importance.

Superior Courts: Each province and territory has two levels of superior court, one to hear trials
and the other to hear appeals. Superior courts handle criminal offences, divorces, civil cases
involving large amounts of money and Charter challenges, and review the decisions of
administrative tribunals and some lower courts. The trial court has various names - it is the
Superior Court in Quebec and the Superior Court of Justice in Ontario, but is known as the Court
of Queen's Bench in Alberta, Manitoba, New Brunswick and Saskatchewan, and as the Court of
Justice in Nunavut. In all other provinces and territories, it is called the Supreme Court. Rulings
made by judges at the trial level can be appealed to the appellate level, either called the Court of
Appeal or the Appeal Division, which is the highest court within the province or territory.

The Federal Court and the Federal Court of Appeal handle issues that arise under federal laws
and appeals from the decisions of federal tribunals. The Tax Court deals specifically with
disputes between taxpayers and the federal government over tax assessments. The Court Martial
Appeal Court of Canada hears appeals from military courts which are known as "courts martial."

Judges on each of these courts are eligible to become members of the Canadian Superior Court
Judges Association. Judges of the Supreme Court of Canada have declined to join since cases
involving judicial organizations like the Association may come before their court.

The federal government appoints and pays the superior court judges. Provinces and territories,
however, provide courthouses and other facilities and support staff for the trial and appeal
divisions of their jurisdiction's superior court.

Provincial and Territorial Courts: The provinces and territories appoint and pay judges who
serve in the courts that form the lower tier of the court system. These courts have the power to
deal with every criminal offence except the most serious offences, such as murder and piracy,
and conduct pre-trial hearings, called preliminary hearings, in criminal cases destined for trial in
superior court. They also handle violations of provincial laws. In Quebec, this level of court also
deals with civil matters involving up to $70,000 and disputes over provincial taxes. Provinces
and territories have established Small Claims Courts to resolve civil actions involving small
amounts of money. Youth Courts deal with young persons between the ages of 12 and 18
charged with criminal offences.

When launching a new business in Canada, you will have to choose you legal structure. For a
small business in Canada, there are three main structures that you will have to consider:

• Sole Proprietorship
• Partnership
• Corporation

Sole Proprietorship

In a sole proprietorship you are the only one responsible for the business and you are not
personally differentiated form the business. When you file your income tax report, you simply
add the revenues form the business operation to your personal income. Applicable deductions for
legitimate business expenses should also be deducted. This structure gives you a lot of freedom
to make decisions but you also expose yourself to more risk. For example, you are personally
personal your businesses borrowings. The advantage is that this structure is simple to implement
and can be done relatively quickly.

Partnership
A partnership is similar to a sole proprietorship except that two or more people sharing the
decision-making as well as the risks and responsibilities. In a partnership, you benefit from the
support of another motivated person that will help you find solutions but you also face personal
liability for the financial misfortunes of the business. By default, each partner has equal voting
rights. However you can also consider creating a partnership where the partners are not equal.
Some may ask why anyone would want to create a partnership of you are subject to personal
liability – the answer is that in Canada certain professional organization may not for a limited
liability corporation. In case you want to bring in outside financing from another partner but
don’t want him to participate in decision-making, you can offer him a limited partnership. The
limited partnership limits this person’s risk to the capital invested but prevents him from making
decisions.

Corporation

The last legal structure is the corporation. In the corporation, the personal responsibilities are
limited to the capital invested (unless some kind of misconduct has occurred). Under the
corporation, your personal belongings are protected. Only the business assets can be taken away.
However, you do have to file more paperwork with the government in order to register your
business, and you will have to file a different income tax report for the business. You will also be
subject to “double taxation”, since you have to pay income tax on your profits, and once again on
the dividends you pay yourself.

It’s best to speak to a professional before setting up a legal structure. However the most popular
route is to set up a corporation as you are separating yourself from the business, which protects
your personal assets.

Economical
Canada has the ninth largest economy in the world[4] (measured in US dollars at market exchange
rates), is one of the world's wealthiest nations, and is a member of the Organization for
Economic Co-operation and Development (OECD) and Group of Eight (G8). As with other
developed nations, the Canadian economy is dominated by the service industry, which employs
about three quarters of Canadians.[5] Canada is unusual among developed countries in the
importance of the primary sector, with the logging and oil industries being two of Canada's most
important. Canada also has a sizable manufacturing sector, centered in Central Canada, with the
automobile industry especially important.

Canada has one of the highest levels of economic freedom in the world. Today Canada closely
resembles the U.S. in its market-oriented economic system, and pattern of production.[6] As of
December 2010, Canada's national unemployment rate stood at 7.6% [7]) as the economy
continues its recovery from the effects of the 2007-2010 global financial crisis. In May 2010,
provincial unemployment rates varied from a low of 5.0% in Saskatchewan to a high of 13.8% in
Newfoundland and Labrador. According to the Forbes Global 2000 list of the world's largest
companies in 2008, Canada had 69 companies in the list, ranking 5th next to France. As of 2008,
Canada’s total government debt burden is the lowest in the G8.

International trade makes up a large part of the Canadian economy, particularly of its natural
resources. In 2009, agricultural, energy, forestry and mining exports accounted for about 58% of
Canada's total exports. Machinery, equipment, automotive products and other manufactures
accounted for a further 38% of exports in 2009.] In 2009, exports accounted for approximately
30% of Canada's GDP. The United States is by far its largest trading partner, accounting for
about 73% of exports and 63% of imports as of 2009. Canada's combined exports and imports
ranked 8th among all nations in 2006.

Canada has considerable natural resources spread across its varied regions. As an example, in
British Columbia the forestry industry is of great importance, while the oil and gas industry is
important in Alberta, Saskatchewan and Newfoundland and Labrador. Northern Ontario is home
to a wide array of mines, while the fishing industry has long been central to the character of the
Atlantic provinces, though it has recently been in steep decline. Canada has mineral resources of
coal, copper, iron ore, and gold.

These primary industries are increasingly becoming less important to the overall economy. Only
some 4% of Canadians are employed in these fields, and they account for 6.2% of GDP.[13] They
are still paramount in many parts of the country. Many, if not most, towns in northern Canada,
where agriculture is difficult, exist because of a nearby mine or source of timber. Canada is a
world leader in the production of many natural resources such as gold, nickel, uranium,
diamonds and lead. Several of Canada's largest companies are based in natural resource
industries, such as EnCana, Cameco, Goldcorp, and Barrick Gold. The vast majority of these
products are exported, mainly to the United States. There are also many secondary and service
industries that are directly linked to primary ones. For instance one of Canada's largest
manufacturing industries is the pulp and paper sector, which is directly linked to the logging
industry.

The large reliance on natural resources has several effects on the Canadian economy and
Canadian society. While manufacturing and service industries are easy to standardize, natural
resources vary greatly by region. This ensures that differing economic structures developed in
each region of Canada, contributing to Canada's strong regionalism. At the same time the vast
majority of these resources are exported, integrating Canada closely into the international
economy. Howlett and Ramesh argue that the inherent instability of such industries also
contributes to greater government intervention in the economy, to reduce the social impact of
market changes.[14]

Such industries also raise important questions of sustainability. Despite many decades as a
leading producer, there is little risk of depletion. Large discoveries continue to be made, such as
the massive nickel find at Voisey's Bay. Moreover the far north remains largely undeveloped as
producers await higher prices or new technologies as many operations in this region are not yet
cost effective. In recent decades Canadians have become less willing to accept the environmental
destruction associated with exploiting natural resources. High wages and Aboriginal land claims
have also curbed expansion. Instead many Canadian companies have focused their exploration
and expansion activities overseas where prices are lower and governments more accommodating.
Canadian companies are increasingly playing important roles in Latin America, Southeast Asia,
and Africa.

The exploitation of renewable resources have raised concerns in recent years. After decades of
escalating overexploitation the cod fishery all but collapsed in the 1990s, and the Pacific salmon
industry also suffered greatly. The logging industry, after many years of activism, has in recent
years moved to a more sustainable model.

Canada Economic Structure One of the wealthiest nations of the world, Canada is a member of
the Organization of the Economic Cooperation and Development (OECD) and the G-8. Like all
other developed nations, Canada’s economy is dominated by the service sector. One of the few
nations in the world to be a net exporter of energy, Canada finds its place amongst the top ten
trading nations in the world.

Canada Economic Structure: GDP Composition Nearly 70% of Canada’s Gross Domestic
Product (GDP) is contributed by its service sector, which employs over 75% of the country’s
population. The country’s agriculture sector contributes only 2% of the GDP, employing a
similar proportion of its people. The North American nation’s industry contributes nearly 28% of
its GDP, while employing around 27% of its population. The country’s services segment
includes retail, communication, real estate, financial services, health and education
entertainment, technology and tourism. A large portion of the country’s natural resources,
including oil, gold, nickel and uranium and agricultural products like wheat and other grains, are
exported to the US, Europe and East Asia.

Canada Economic Structure: Resemblance to the US Canada resembles the US in its market
oriented economic system, pattern of production and affluent living standards. The impressive
growth of Canada’s manufacturing, mining and service segments since World War II have
transformed the North American nation from an agrarian economy to one with a highly industrial
and urban economic structure. Low labor costs and a comprehensive healthcare and social
security system have attracted automobile majors from the US and Japan to set up manufacturing
facilities in Canada. Canada’s trade and economic integration with the United States has
witnessed a dramatic increase, following the signing of the 1989 US-Canada Free Trade
Agreement (FTA) and the 1994 North American Free Trade Agreement (NAFTA). The US is
Canada’s largest trading partner, besides being its largest foreign investor through investments in
mining, smelting, petroleum, chemical and machinery segments. This has linked the Canadian
economic policy even more to the United States. Even a minor change in the US interest rates
has repercussions in Canada. One important distinction between the economic structures of
Canada and the US is that the former is a net exporter of commodities while the latter is a net
importer. Canada’s banking segment is also quite conservative in comparison to the United
States.

Canada’s unsustainable economic structure: why your taxes will increase by 50%

One third of people in this country do not work for a living, yet are not considered unemployed.
Of the two-thirds of the population that work, a quarter are in the public sector or unemployed,
neither of which creates any wealth. This means half the people in this country pay all the bills.

The average personal tax rate in Canada is 33.3%. One-third of the producing population’s
earnings are taken away to pay for the needs of everyone else. But this isn’t enough ! To balance
the books productive taxpayers have to pay 50%. We have structural deficits of 16.6% of GNP
every year because taxes are too low to pay for the number of people who don’t produce. To
balance the books rates have to be hided from 33.3% to 50% which is a fifty percent increase in
average tax rates.

Surely these numbers can’t be true ?!? Well, very sorry to tell you they are. Every figure used
here comes from Statistics Canada or the OECD. See footer for reference links.

As for the logic, it is pretty hard to refute that the very young, the unemployed, the retired and
employees of government contribute to economic productivity, because they don’t. Government
employees do not create wealth, they redistribute and consume it. Spending savings does not
create wealth either.

And then there’s the argument that businesses and government employees pay taxes too, so it
isn’t all on the productive workers that the burden falls, right ? Not so, I’m afraid. All of the
taxes paid by businesses come out of the pockets of shareholders. Corporate tax law is structured
to accelerate collection of taxes, not transfer tax burden to them. Taxes paid by government
employees come out of government wages paid, which are financed by the productive population
(plus the structural debt). In a way, government employees work for a net wage of 66 cents on
the dollar. But that 66 cents is inescapably paid for by the productive population…and debt.

Energy

Petroleum production in Canada

Nodding donkey pumping an oil well near Sarnia, Ontario

Canada is one of the few developed nations that is a net exporter of energy - in 2009 net exports
of energy products amounted to 2.9% of GDP. Most important are the large oil and gas resources
centred in Alberta and the Northern Territories, but also present in neighbouring British
Columbia and Saskatchewan. The vast Athabasca Oil Sands give Canada the world's second
largest reserves of oil after Saudi Arabia according to USGS. In British Columbia and Quebec,
as well as Ontario, Saskatchewan, Manitoba and the Labrador region, hydroelectric power is an
inexpensive and relatively environmentally friendly source of abundant energy. In part because
of this, Canada is also one of the world's highest per capita consumers of energy. [15][16] Cheap
energy has enabled the creation of several important industries, such as the large aluminum
industry in Quebec and British Columbia.

Historically, an important issue in Canadian politics is that while Western Canada is one of the
world's richest sources of energy, the industrial heartland of Southern Ontario has fewer native
sources of power. It is, however, cheaper for Alberta to ship its oil to the western United States
than to eastern Canada. The eastern Canadian ports thus import significant quantities of oil from
overseas, and Ontario makes significant use of nuclear power.

In times of high oil prices this means that the majority of Canada's population suffers, while the
West benefits. The National Energy Policy of the early 1980s attempted to force Alberta to sell
low priced oil to eastern Canada. This policy proved deeply divisive, and quickly lost its
importance as oil prices collapsed in the mid-1980s. One of the most controversial sections of the
Canada-United States Free Trade Agreement of 1988 was a promise that Canada would never
charge the United States more for energy than fellow Canadians.

Agriculture

Agriculture in Canada

A grain elevator in Alberta

Canada is also one of the world's largest suppliers of agricultural products, particularly of wheat
and other grains. Canada is a major exporter of agricultural products, to the United States but
also to Europe and East Asia. As with all other developed nations the proportion of the
population and GDP devoted to agriculture fell dramatically over the 20th century.
As with other developed nations, the Canadian agriculture industry receives significant
government subsidies and supports. However, Canada has been a strong supporter of reducing
market influencing subsidies through the World Trade Organization. In 2000, Canada spent
approximately CDN$4.6 billion on supports for the industry. Of this, $2.32 billion was classified
under the WTO designation of "green box" support, meaning it did not directly influence the
market, such as money for research or disaster relief. All but $848.2 million were subsidies
worth less than 5% of the value of the crops they were provided for, which is the WTO
threshold. Consequently, Canada used only $848.2 million of its $4.3 billion subsidy allowance
granted by the WTO.

Manufacturing

The general pattern of development for wealthy nations was a transition from a primary industry
based economy to a manufacturing based one, and then to a service based economy. Canada did
not escape this pattern - at its (abnormally high World War 2) peak in 1944, manufacturing
accounted for 29% of GDP, declining to 15.6% in 2005. Canada has not suffered as greatly as
most other rich, industrialized nations from the pains of the relative decline in the importance of
manufacturing since the 1960s. A 2009 study by Statistics Canada also found that, while
manufacturing declined as a relative percentage of GDP from 24.3% in the 1960s to 15.6% in
2005, manufacturing volumes between 1961 and 2005 kept pace with the overall growth in the
volume index of GDP. Manufacturing in Canada was especially hard hit by the 2007-2010 global
financial crisis. As of 2010, manufacturing accounts for 13% of Canada's GDP, a relative decline
of more than 2% of GDP since 2005.

Central Canada is home to branch plants to all the major American and Japanese automobile
makers and many parts factories owned by Canadian firms such as Magna International and
Linamar Corporation. Central Canada today produces more vehicles each year than the
neighboring U.S. state of Michigan, the heart of the American automobile industry.
Manufacturers have been attracted to Canada due to the highly educated population with lower
labour costs than the United States. Canada's publicly funded health care system is also an
important attraction, as it exempts companies from the high health insurance costs they must pay
in the United States.

Much of the Canadian manufacturing industry consists of branch plants of United States firms,
though there are some important domestic manufacturers, such as Bombardier Inc.. This has
raised several concerns for Canadians. Branch plants provide mainly blue collar jobs, with
research and executive positions confined to the United States.

Service sector
The Toronto-Dominion Centre in Toronto

The service sector in Canada is vast and multifaceted, employing some three quarters of
Canadians and accounting for over two thirds of GDP. The largest employer is the retail sector,
employing almost 12% of Canadians. The retail industry is mainly concentrated in a small
number of chain stores clustered together in shopping malls. In recent years, there has been an
increase in the number of big-box stores, such as Wal-Mart (of the United States) and Future
Shop (a subsidiary of the US based Best Buy) and Zellers. This has led to fewer workers in this
sector and a migration of retail jobs to the suburbs.

The second largest portion of the service sector is the business services, employing only a
slightly smaller percentage of the population. This includes the financial services, real estate, and
communications industries. This portion of the economy has been rapidly growing in recent
years. It is largely concentrated in the major urban centres, especially Toronto, Montreal and
Vancouver.

The education and health sectors are two of Canada's largest, but both are largely under the
purview of the government. The health care industry has been rapidly growing, and is the third
largest in Canada. Its rapid growth has led to problems for governments who must find money to
fund it.

Canada has an important high tech industry, and also an entertainment industry creating content
both for local and international consumption. Tourism is of ever increasing importance, with the
vast majority of international visitors coming from the United States. Though the recent strength
of the Canadian Dollar has hurt this sector, other nations such as China have increased tourism to
Canada.

Political issues
Regional imbalances

The Canadian economy differs greatly from region to region. Traditionally Central Canada has
been the economic engine of Canada, home to more than half of its population and much of its
industry. Recent years have seen rapid growth in Western Canada as trade with Asia has
enriched British Columbia and oil wealth provided a major boost to Alberta and Saskatchewan.

The four Atlantic provinces, though once the centre of economic activity, underwent a major
decline in the late 19th century and have traditionally been significantly poorer than the rest of
Canada, especially after the recent collapse of the fishing industry. Recent years have seen some
significant moves towards diversification, especially as offshore oil and gas wealth have begun
to flow into the region. Quebec has also traditionally been poorer than the Canadian average
although by a lesser margin than the Atlantic provinces. In more recent years Newfoundland and
Labrador have started to see a change in their economy, being called the "Celtic tiger of
Canada," (in a comparison to the economic transformation in Ireland); it has also been called a
"mini Alberta" because of new oil and gas exploration. While many Newfoundlanders and
Labradorians still emigrate to Alberta for higher-paying jobs, the province's population has been
on the rise in recent years with many people deciding to move back home

People Advantage

Innovative and Diverse

A country’s greatest asset in a knowledge economy is a smart workforce and Canada is rich in
talented human resources. Canada has the best educational system in the G7 and is rewarded
with the most highly-educated population in the OECD. In addition, Canada also attracts the best
and brightest from every corner of the globe due to its business-friendly immigration policies
enable highly qualified newcomers

Smart Workforce

#1 in the OECD in higher education achievement — More than half of Canadians between the
ages of 25 to 35 have a post-secondary education, either at university, college or technical
school. Source: IMD World Competitiveness Yearbook, 2009

Over 42% of all immigrants have completed university and 16% have a trade certificate or
non-university diploma — In addition to existing high levels of education, almost 90% of
immigrants continue to take education or training courses upon their arrival in Canada. Sources:
Citizenship and Immigrant Canada, Facts and Figures, 2007. Longitudinal Survey of Immigrants
to Canada, Statistics Canada, 2005
One of the world’s top performers — In business education, Canadian schools excel by any
measure. The IMD ranks Canada first in the G7 for its management schools. In Business Week
magazine’s 2008 MBA survey, three Canadian business schools finished among the top 10
outside the United States: Queen’s (first), Western Ontario (fourth), and Toronto (eighth). And
according to the Financial Times’ Global MBA rankings for 2009, five Canadian management
schools rank among the top 100 worldwide.

Superior Education — The World Economic Forum also placed Canada in the top 10 in a 125-
country study of management education available locally in first-class business schools.

Qualified Engineers — Availability of qualified engineers is greater in Canada than any other
G7. Source: IMD World Competitiveness Yearbook, 2009.

Business Environment Advantage

World-class Performer

Canada understands the importance of its business community and has created an environment to
encourage its success. Name an international study and, odds are, Canada ranks as the top choice
for its many competitive advantages.

Canada leads all G7 countries in ease of doing business, according to the 2009 IMD World
Competitiveness Yearbook. Also, the Economic Intelligence Unit forecasts Canada as the #1
place to do business in the G7 for the next five years.

Nexus for International Business Opportunities

U.S.: Canada is America's largest trading partner.

Europe: European markets provide tremendous trade opportunities for Canada. Some of the
most important exports to the European Union are chemicals, machinery, transport equipment,
computer electronics products and minerals.

Asia: A maritime nation, Canada has exceptional access to Asia-Pacific markets. With its
advantageous geographical location, strong immigration links and membership in APEC that
reduces trade barriers, Canada is well positioned to capitalize on the long-term growth potential
of Asian economies. To maximize its strategic access and enhance its competitive position,
Canada has invested over $1billion into the Asia-Pacific Gateway and Corridor Initiative to
support stronger infrastructure links among Canada, NAFTA and Asia-Pacific markets.

Magnet for the Best and the Brightest

Canada is world renowned for its beauty and abundance of natural resources, but it is
increasingly recognized for its brainpower. Canada has invested billions of dollars over the last
decade to create a robust research and development (R&D) climate that is second to none.
Canada ranks second behind the U.S. among the G7 and fourth in a 134-country review of the
quality of scientific research undertaken in government and university laboratories. The
Canadian Foundation for Innovation funds technology clusters across the country in domains
ranging from pharmaceuticals to fuel cells to information and communications technologies.

Among Leaders in IT Industry Competitiveness

Canada ranks fourth in a 66-country review of the countries best suited to provide an optimally
competitive environment for information technology (IT) firms.

The U.S. and Canadian telecommunications and automobile industries are virtually integrated
across the Canada-U.S. border.

Cutting-edge American producers recognize Canadian leadership in industries such as fibre

optics, aerospace and biopharmaceuticals.

Economic Advantage

Extraordinary Record

"Canada is better placed than many countries to weather the global financial turbulence and
worldwide recession. Its resilience can be attributed to three factors: First, a track record of
sound macroeconomic policy management has left the country in prime form at the beginning of
the global turmoil …Second, the authorities responded proactively to the crisis …Third, the
focus on financial stability. "

Charles Kramer, Division Chief, Western Hemisphere Department, International Monetary Fund.
March 2009

Take Canada’s prudent fiscal policy, low inflation, interest and unemployment rates, and a
corporate tax framework that is among the best in the world. Factor in Canada’s status as an
emerging energy superpower, the only stable and growing producer of this scarce commodity.
Add to that the country’s strategic investments in technology, education and healthcare. The
result is perfectly ideal conditions for businesses to grow and prosper.

According to Dun & Bradstreet’s Global Risk Indicator, Canada is considered one of the world’s
safest countries to invest, due to the relatively mild slowdown experienced as a result of the
global credit crisis. In addition, the Canadian Business’ Prosperity Potential Index (October
2009) ranks Canada first in the G7 for the likelihood of a strong and healthy economy in the year
2020.
AAA credit rating: In response to Canada’s improved fiscal balance sheet and excellent long-
term growth prospects, the country has enjoyed a AAA international credit rating (the highest
rating) from Moody’s Investors Services since 2002.
In the mid-1990s, Canada’s total net debt-to-GDP ratio was the second highest in the G7. Today,
it is the lowest. The Economic Intelligence Unit projects Canada’s inflation rate of 2.1% to
remain the same for the next five years, compared to 3.2% for the U.S.

The global economic crisis may be deepening, but Canadian financial institutions remain
resilient. For the second year in a row, the World Economic Forum’s Global Competitiveness
Report has found that Canada has the soundest banking system in the world. Canada's well-
regulated financial institutions, banks, trust companies, cooperatives, insurance companies and
stock exchanges, have demonstrated stability and competitiveness that has made their services
popular around the world. The financial sector has become one of Canada's major export earners
since the worldwide liberalization of financial regulations. Canada’s other financial institutions
are equally impressive, offering investment opportunities that are both lucrative and safe.

Support When You Need It :

Canada's Export Development Corporation (EDC) provides trade finance and risk management
services to Canadian exporters and foreign investors.

Tax Advantage

Incentives for Industry

The World Trade Magazine has ranked Canada in the Top 3 for Investment and Trade
Opportunities, and with good reason.

Canada offers businesses low tax rates. Today, Canada has the lowest payroll taxes among the
G7 countries and by 2012 Canada's corporate income tax rate will fall from 18 percent in 2010 to
15 percent in 2012 - less than half of the U.S. rate.

Canada's combined federal and provincial-territorial statutory coporate tax rate decline
from 31.3% in 2009 to 30.8% in 2010. It is on track to drop to 27.2% by 2012. By 2012, Canada
will also have a statutory corporate tax rate advantage over the United States of almost 12
percentage points.

Canada Provides Unsurpassed Tariff and Foreign Trade Zone Advantages

Canada has taken important steps in providing new trade advantages for investors. It is
eliminating tariffs on manufacturing imports and is offering many complementary benefits found
in foreign trade zones around the world but with a key difference: Canada’s general duty and tax
relief is geographically flexible. It can be enjoyed anywhere in the country.
Canada’s approach is superior to efforts by other countries that focus on location-specific foreign
trade zones. Canada is the first G20 country to implement such an approach. This makes Canada
a destination of choice for foreign investment.

Canada - a Tariff-Free Zone for Industrial Manufacturers

Canada, as a nation whose prosperity is greatly dependent on trade, understands the importance
of open markets for international investors. Free trade is an important source of competitive
strength for international businesses operating from Canada and those investing in Canada. For
this reason, Canada has taken steps to provide new trade advantages to investors. Canada is
eliminating tariffs on imported manufacturing machinery and equipment and related industrial
inputs.

Investors considering Canada as their new investment destination now have the advantage of
importing advanced machinery and equipment from their parent companies free of import duties.
In 2010, tariffs were liberalized on an additional $5 billion in imports in varied areas such as
textiles, chemicals, base metals, etc., providing $300 million in annual duty savings for
manufacturers, net of savings on tariff compliance and administration. By 2015 all duties on
manufacturing machinery and equipment and industrial inputs will have been removed.

Benefits for Investors

The duty-free treatment of manufacturing or processing equipment reduces costs and increases
profitability of investors’ global operations. By reducing the cost of importing key factors of
production, the elimination of tariffs encourages innovation and allows businesses to enhance
their stock of capital equipment. This is particularly important to small and medium-sized
foreign investors who choose Canada as a place to invest and as a base from which to operate
and export.

The elimination of tariffs will reduce customs compliance costs, simplify the tariff structure and
eliminate the administrative burden of complying with rules of origin and duty drawback
regulations. This makes Canada a tariff-free zone for industrial manufacturers and a more
attractive place for investors.

Key Benefits

Complements Canada’s business tax advantage and stable financial sector

Lowers costs of production to increase business competitiveness at home and abroad

Makes productivity-enhancing advanced machinery and equipment purchases more affordable

Takes away the need of applying for duty drawback (refund) by manufacturers

Simplifies tariff structure

Reduces overall tariff compliance cost and administrative burden

Strengthening Canada as a Foreign Trade Zone

There are important complementary programs that - together with tariff elimination - greatly
enhance the appeal of Canada as a unique Foreign Trade Zone (FTZ). These programs, available
across Canada, offer many of the benefits found only in locally-oriented ForeignTrade Zones
(e.g., in the United States). Thus, Canada’s FTZtype programs offer investors the vitally
important advantage of geographic flexibility.

Canada’s programs do not restrict investors to a handful of locations that may be distant from
their best markets or may have inadequate infrastructure and poor logistics. In effect, programs
such as the Duty Deferral Program, the Export Distribution Centre Program and Exporters of
Processing Services Program make it possible to create an FTZ environment exactly where the
business needs it, while offering all the benefits of a traditional FTZ.

A Duty Deferral Program (DDP)

DDP is administered by the Canadian Border Services Agency (CBSA). This is Canada’s main
FTZ-type program. The program covers three components: upfront duties relief, drawback or
repayment by government of import duties (when the imported goods are re-exported or used in
the manufacture of exported goods) and the deferral of duties for up to four years through the
Customs Bonded Warehouse Program (CBW).

The DDP can postpone or refund duties and taxes investors would otherwise have to pay on
goods they import and that are subsequently exported. For example, in 2009, there were 2,000
companies earning $250 million dollars in duty refund benefits. To round it up, the CBW
program offers importers an effective storage option. It allows for the deferring of all import
levies, including the GST and HST, and for taking advantage of just-in-time inventory practices.

Unlike in local foreign trade zones, there are no geographic restrictions. The business benefits
are straightforward: lower duty costs, help increase cash flow, free up working capital, and
permit more competitively priced goods. Taking advantage of the DDP also makes it easier to
attract new investment and to partner with other companies.

DDP and NAFTA

The North American Free Trade Agreement (NAFTA) can limit the benefits from the duties
relief and drawback programs with respect to non-originating goods — that is, goods which do
not originate in the United States, Canada or Mexico but are used as materials for manufacturing
Canadian products that are subsequently exported to a NAFTA partner.

The Export Distribution Centre Program (EDCP)

The EDCP is administered by the Canada Revenue Agency (CRA). The program is intended to
benefit businesses that import goods and/or acquire goods in Canada, process them to add
limited value and then export them. The “limited value” criterion is a key factor here, since the
EDCP is not intended to benefit companies that manufacture or produce new products for export.
The program is therefore of particular value to businesses involved in the processing of goods
such as distributing, disassembling, reassembling, etc. Under the program, investors do not pay
federal Goods and Services Tax (GST) or a Harmonized Sales Tax (HST) in those provinces that
have harmonized their retail sales taxes with the value-added GST. This improves cash flow as
investors do not need to pay the taxes up front, claim an input tax credit on their GST/HST return
and then wait for their net tax refund.

The Exporters of Processing Services Program (EOPS)

Administered by the CRA, the program removes from participants the obligation to pay
GST/HST on imports of goods belonging to non-residents, provided that these goods are
imported for processing, distribution or storage and are subsequently exported. Thus,
participation in the program helps investors increase cash flow and reduce operating expenses.

Summing It Up :

Canada provides internationally oriented businesses with comparable benefits to those offered by
FTZs in the United States and around the world, with the two distinct advantages of lower
administration costs and no geographic restriction. Moreover, Canada’s value-added tax, the
GST/HST, is fully recoverable for businesses engaged in commercial activities and does not
apply to exports. Canada also has the lowest overall tax rate on new business investment. Taken
together, Canada’s highly competitive tariff, tax and duty deferral regimes (including the
targeted FTZ-type programs) will allow export-oriented companies to enjoy the benefits of
foreign trade zones anywhere in Canada.

Key Advantages and Benefits of Canada’s FTZ-Type Programs

Advantages

Time and cost less onerous than the process to obtain a formal FTZ designation - no heavy paper
burden

Accessible regardless of location - no geographic restriction

Benefits for business

Improved cash flow

Reduced operating expenses

Increased international competitiveness

National Incentives

Canada’s proactive federal government wants your business and it pulls out all the stops to make
it worth your while. To truly welcome foreign investment, it offers numerous incentives to
ensure new businesses will be successful.

Export Development Canada (EDC): Financing Support for Inbound Foreign Direct
Investment :
New! In response to the Government of Canada’s efforts to encourage foreign companies to
invest in Canada, EDC now offers financing support for inbound foreign investment.

Scientific Research and Experimental Development Program :

Business involved in research and development can apply for tax credits on expenditures such as
wages, materials and equipment. Administered by the Canada Revenue Agency (CRA).

Industrial Research Assistance Program :

Small- and medium-sized foreign subsidiaries incorporated in Canada can apply for on-site aid
from IRAP's Technology Advisors. Administered by the National Research Council of Canada.

BDC Financing :
The Business Development Bank of Canada funds companies with a basis in technology and a
sustainable, market-oriented business plan.

Natural Sciences and Engineering Research Council of Canada :

NSERC works with companies that have been provincially or federally incorporated in Canada
to encourage research and development in collaboration with universities and students.

Precarn :
Precarn funds projects involving the participation of at least two companies and one university,
and works with funding programs in other companies to support research and development in the
field of intelligence systems.

Film Industry Services :

The Canada Revenue Agency administers two film tax credit programs to help the film industry
in Canada.

To be eligible for most incentives, you must have a company established in Canada.

NAFTA Advantage

North America—the most lucrative market in the world

Want access to more than 442 million consumers and a combined GDP of more than US$17.0
trillion? Look no further than Canada.

America’s #1 Trading Partner

— by a long shot. Two-way goods-and-services trade between Canada and the United States
amounted to $740 billion dollars in 2008, or nearly $1.4 million a minute in trade.

Closer to the US than . . . the US

Many Canadian production hubs are actually closer to target U.S. markets than American
production sites. Of Canada's 20 largest cities, 17 are within an hour and a half drive of the
United States and many are much closer. Several, such as Vancouver, Windsor, and Montréal,
are only minutes away. Production locations in Quebec and the industrial heartland of
southwestern Ontario are often closer to the huge American markets around New York, Boston,
and Chicago than popular American production hubs like Atlanta, GA, and Raleigh, NC.

Smart Borders

Fast and efficient trucking, railways, ocean shipping and air services link the two countries. To
accommodate the growth in trade and commerce, Canada and the United States have signed a
pact to work together to create a Smart Border. The Declaration outlined a 30-Point Action Plan,
which provides for ongoing collaboration in identifying and addressing security risks, while
efficiently expediting the legitimate flow of people and goods across the Canada-US border.

Access to Latin America

The North American Free Trade Agreement (NAFTA) gives you access to the entire continent
and entrée to Latin America. Following the success of the 1988 Canada-U.S. Free Trade
Agreement, in 1994 the original trading partnership expanded to include Mexico — creating the
largest free trade area in the world. Products traded with the United States and Mexico fall under
the terms of NAFTA and most tariffs were eliminated in 2004.
NAFTA revealed the true potential for Canada-Mexico-US trade and ushered in a new era of
economic integration. Canada and the US remain each other’s largest trading partners. Mexico is
now Canada's fourth largest export market, while Canada is Mexico's second largest

The Asia-Pacific Gateway and Corridor Initiative (APGCI)

The Asia-Pacific Gateway and Corridor Initiative (APGCI) is an unprecedented association of

public and private sector resources to take advantage of Canada’s strategic location at the
crossroads between the North American marketplace and the booming economies of Asia.
This initiative is responding to the huge volume in cargo traffic that is expected to increase
constantly with Asia-Pacific countries and China in particular. The significant resources invested
in the Gateway and Corridor are increasing Canada’s competitiveness. Specifically,
improvements in British Columbia ports and related railroad infrastructure have reduced
bottlenecks and helped to swiftly move merchandise to inland and multimodal transportation
hubs.

Private sector investment in the gateway and corridor has been an important component of its
success. Investors are participating in projects ranging from bridge construction to terminal
infrastructure at Canada’s western ports. These investments complement the federal
government’s contribution of over $860 million in infrastructure projects worth $2.3 billion
located in all four western provinces.

The APGCI provides potential investors with a substantial competitive advantage. In addition,
logistical benefits make Canada even more attractive as an investment location.

Transportation Advantage

Canada is Connected

Bordering three oceans, spanning six time zones and covering 9,970,610 square km (3,849,650
square miles), Canada is the second largest country on earth. But distance isn’t a deterrent for
businesses operating in Canada, thanks to its sophisticated infrastructure and highly developed
transportation network.

Here’s Why:

Airports—Canada has 26 airports as part of the national airports system, 594 certified airports
that support scheduled and non-scheduled flights, and 1,820 aerodromes that support takeoffs
and landings. Toronto is the busiest airport in the country, serving as an east-west hub and
handling roughly half of all passenger traffic. Canadian airports processed more than 71.5
million passengers in 2007. Source: Transport Canada, 2009.

Ports—More than 300 commercial ports and harbours move local and global goods in Canada.
The Atlantic, Arctic and Pacific oceans surround Canada’s three coasts. Canada is also home to
the world’s longest inland waterway open to shipping—the Great Lakes/St. Lawrence Seaway—
the industrial heart of North America. Major international ports include Halifax, Montréal and
Vancouver. Western Canadian ports offer the shortest sailing distance from North America to
the Asia-Pacific region, providing a sailing-time advantage of approximately two days over all
other locations in the Western Hemisphere.
Rail—Canadian railways handle 355 million metric tonnes of freight annually, much of it
moving between Canada and its NAFTA partners. The two major carriers in Canada, Canadian
Pacific Railway and Canadian National Railways, cover a combined 53,000 kilometres (33,000
miles) from Vancouver to Halifax, Montreal to New Orleans and Calgary to Houston.

Roads—Roads—with nearly 900,000 kilometres of road, Canada has enough transportation

infrastructure to circle the Earth 22 times. The Trans Canada Highway, the longest national
highway in the world, links all 10 provinces and is fully integrated with the US road network,
including 18 major border crossings. Source: Transport Canada, 2009.

To accommodate the phenomenal growth in free trade between Canada and the US, the two
countries have developed a shared Action Plan for Creating a Secure and Smart Border to speed
up the movement of legitimate travellers and trade.

The busy-friendly features of the Smart Border Accord

FAST lanes for pre-approved low-risk commercial traffic opened at Windsor-Detroit, Sarnia-
Port Huron, and Fort Erie-Buffalo.

Automated permit ports, transponder identification systems and joint processing centres are
being tested and deployed.

Today, border wait times average less than 10 minutes, one of the most efficient systems in the
world.

Lifestyle Advantage

A Great Place to Live

Canada is one of the best countries in the world to live, learn and work. From wide-open spaces
to the most cosmopolitan places, Canada offers beauty, variety and an enviable quality of life.
Canada is a place where people can realize their dreams, where families can enjoy a standard of
living second to none, and where businesses enjoy a competitive edge.

Strong and Free

Canadians are hard-working, ambitious people who are proud of their successful, independent
country. They want better lives for themselves, their children and future generations. They
believe in tolerance, justice and providing a helping hand to the less fortunate. More than empty
promises, equality is enshrined in Canada’s Charter of Rights and Freedoms and the country’s
Constitution, guaranteeing freedom and fairness for all.

Equality and Multiculturalism

Canada is a large country in both size and spirit. Canada ranks first among the G7 countries in
providing equal opportunities for individuals, whether native-born or a new arrival. Canadians
welcome immigrants from around the globe. Almost all of the world's ethnic groups are
represented in Canada, creating one of the world’s most culturally diverse and multilingual
societies, with over 200 languages spoken. Canada is also a world leader in integrating
newcomers, with progressive immigration laws highly conducive to hiring foreign workers.

Commitment to Each Other

Canadians place a premium on health and well-being, and are proud of our universal health
system and social safety network that ensure equitable opportunities for citizens to participate in
the life of our communities and country. This approach is both a social and economic asset. For
instance, Canadians spend significantly less GDP on health care than their US neighbours. This
provides cost benefits that give Canadian businesses a competitive advantage.

#1 among G7 Countries

Best overall quality of life — Canada has the best overall quality of life among the G7. In a
2009 quality-of-life ranking of 215 world cities by Mercer Human Resources Consulting, four
Canadian cities ranked among the top 25.

A land of equal opportunity — Canada ranks first among the G7 in providing equal
opportunities for individuals.

Best in addressing environmental concerns — As measured by the Environmental

Performance Index (EPI), Canada’s ranks 2nd in the G7 and 12th in a 149-country study in terms
of effectively reducing environmental stresses on human health and promoting ecosystem vitality
and sound natural resource management.

Safest place to live — Canada leads the G7 in terms of the safest place to live and conduct
business with the most fairly administered judicial system.

Optimal human development — According to the United Nations 2009 Human Development
Index, Canada ranked first among the G7 and fourth among the 180 countries surveyed