Canada's Role in the Global Economy

Canada's Role in the Global Economy

• Canada, like many developed nations, benefits from advanced communication and information technology.
• International trade and investment are crucial to the Canadian economy.
• Canada has a high level of international engagement through participation in various organizations.
• Frequent international travel by Canadians contributes to global interconnectivity.
• Integration is a key concept in understanding how countries interact economically, politically, and culturally.

Areas of Integration

• Trade: Increased international trade and investment fostered by agreements like GATT (General Agreement on Tariffs and Trade) reduce tariffs, generating greater economic interdependence.
• Global economic instability can spread rapidly due to the interconnected nature of economies.
• Political Power: International organizations and agreements significantly influence governmental decisions.
• Globalization might erode national sovereignty, with power potentially shifting to corporations or international bodies.
• Culture: Technology and migration have spread cultural influences. Global distribution of music, film, and other entertainment.
• Global brands like McDonald's showcase the effect of globalization.

Sustainability

• Sustainability involves meeting current needs without compromising future generations' ability to meet their own needs.
• Issues like resource depletion, mass consumption, pollution, climate change, human health, well-being and social/economic inequality require decisive action.

Ecotourism

• Ecotourism is a strategy to protect the environment and create sustainable job opportunities.

UN Development Goals

• UN development goals are not specifically listed.

Industrial Revolution and Industrialization

• The Cottage Industry, where most goods were produced domestically, existed early in the 19th century.
• Industrialization was spurred by technological advancements and resource availability.
• Industrialization led to increased demand for raw materials, new markets, and the rise of colonialism and imperialism.

Industries and Levels

• Industry encompasses production, distribution of goods and services, and knowledge development.
• Industry has 5 levels: Primary, Secondary, Tertiary, Quaternary, and Quinary.
• Primary: Extraction of raw materials (mining, forestry, fishing, agriculture).
• Secondary: Manufacturing and processing of raw materials into finished products (manufacturing, engineering, chemicals, clothing, brewing).
• Tertiary: Service industries that support other sectors (finance, utilities, retail, housing, medical).
• Quaternary: Information industries focused on creating and transmitting information (research, training).
• Quinary: Control of industrial and governmental decision-making, including executives, bureaucrats, and officials.

Interrelated Sectors

• Industries often utilize multiple sectors. For example, producing cotton clothing involves primary (farming), secondary (processing), tertiary (retail), quaternary (research), and quinary (regulation) sectors.

Basic and Non-Basic Industries

• Basic industries generate income necessary for local economies (e.g., car factories).
• Non-basic industries don't generate outside income for local economies (e.g., hospitals).

Developing Countries

• Developing countries have poorly developed economies with low incomes, limited food security, poor housing, and few luxuries.
• These economies are usually heavily influenced by the primary sector.
• Service industries are underdeveloped due to limited consumer spending.
• This category often relies on foreign aid.

Newly Industrialized Countries

• Newly Industrialized Countries (NICs) are in transition between developing and developed economies.
• These countries typically have rapid economic growth.
• These countries initially have agriculture-driven economies, which evolve into manufacturing then service industries.

Developed Countries

• Developed countries have advanced economies.
• They possess high incomes, abundant resources, good housing, and readily available luxuries.
• These economies depend increasingly on service industries.

Development Theories

• Dependency Theory: Developed nations benefit disproportionately from developing nations, creating an exploitative relationship.
• Wallerstein's World Systems Theory (Core-Periphery Model): Developed countries are located in core areas (wealth & power centers), and developing countries are in peripheral areas with limited access to these resources.
• Rostow's Stages of Economic Development: This model outlines stages from traditional societies to high mass consumption.
• Criticisms of Rostow's Model: The model is based on Western capitalist ideals, not universal, and doesn't account for uneven development within countries, linear progress, equal potential for all places, and sustainability.

Lewis Structural Change Model

• This model distinguishes between agricultural (A) and industrial/modern (M) sectors.
• It suggests economic development occurs as the M sector grows relative to A. A key aspect is capital accumulation leading to greater productivity and job creation in the M sector.
• Potential issues include labor surplus or shortages, informal labor, and the necessity to improve agricultural productivity.

Comparative Advantage

• Comparative advantage explains how countries benefit from specializing in producing goods with lower production costs.
• This concept implies that nations should focus on producing and trading items in which they have a comparative advantage.

Complementarity Advantage and Neoliberal Policies

• Complementarity advantage refers to the need for a place to have what another place wants (e.g., fruit flowing from California to the Midwest).
• Neoliberal policies advocate for minimal government intervention in the economy, prioritizing free markets.

Free Trade Agreements, Tariffs

• Free trade agreements aim to remove trade restrictions between countries, facilitating the exchange of goods and services.
• Tariffs are taxes on imported/exported goods, increasing prices and stimulating domestic production.

International Institutions

• The EU, WTO, and IMF play important roles in global economic governance.

NAFTA/USMCA

• NAFTA/USMCA had a positive impact on the Canadian economy, opening export opportunities and attracting foreign investment.
• NAFTA ended and was replaced by USMCA on July 21, 2021.