Canadian Economy Sectors PDF

# Sectors of the Canadian Economy ## Basic Industries - Basic Industries are those which supply their products or raw materials. - Examples include Agriculture, Oil, and Paper. ## Non - Basic Industries - The money recirculates within the community - Examples include someone who works at the ha...

# Sectors of the Canadian Economy ## Basic Industries - Basic Industries are those which supply their products or raw materials. - Examples include Agriculture, Oil, and Paper. ## Non - Basic Industries - The money recirculates within the community - Examples include someone who works at the hardware store or a hairdresser. - Money flows in a circular pattern between the industries and consumers in the community. ## Every man-made product is made of natural resources to a certain degree. ### Primary Industries - Harvesting of natural resources - For example, farms, coal, etc. ### Secondary Industries - Manufacturing/Processing raw materials into usable goods - For example, when a farm produces leather it would be processed into a leather jacket ### Tertiary Industries - Service being sold. - For example, when a truck transports goods. ## Economic Cycle | Primary | Secondary | Tertiary | |---|---|---| | Farm | Meat | Transportation, retail | | Coal | Steel | Transportation | | Farm | Leather | Transportation | # Primary Industries in Canada 1. Agriculture (Farming) 2. Fisheries (Fishing) 3. Forestry (Cutting trees, wood) 4. Mining (Gold, Iron) 5. Oil + Gas # Secondary Industries in Canada 1. Manufacturing (Cars, Clothes) 2. Construction (Houses, Buildings) 3. Utilities (Electricity, Water) ## Raw Materials → Manufacturing → Distribution ## Raw Materials → Manufacturing → Distribution → Retail → Consumer | Primary Industry | Secondary Industry | Tertiary Industry | |---|---|---| | Extraction/Harvesting of Natural Resources | Uses Natural Resources to build finished Products | Provides service to Consumer through Retail, Distribution etc. | | Goods producing | Goods producing | Services Producing | # Over time the secondary and tertiary sector the economy, mean the SERVICE industry tends to earn more money than GOODSproucing industries. # The Three - Sector Theory The three-sector theory is an economic theory that states that, in order for a country to develop, its economic activities must shift from the primary, to the secondary and finally to the tertiary sector # Canada's State of Trade | Term | Definition | |---|---| | Imports | Goods brought into a country | | Exports | Goods sent to another country | | Trade Surplus | When the value of exports is greater than the value of imports | | Trade Deficit | When the value of imports is greater than the value of exports | ## What happened in 2009? - First trade deficit since 1975 - To understand the problem, I looked at Canada's key exports and imports. - Energy Sector (Oil) is the biggest and main contributor of trade surplus or deficit. - The price of oil dropped from $200 a barrel in 2008 and dropped to $60 in 2009 (70% decline). This significantly impacted Canada's exports. - Imports in oil also declined but the impact is much smaller than the export. ## Another big contributor to Canada's economy is materials, especially gold. - Price of gold went up and contributed to the increase in exports. - However, metals and alloys exports fel 29.9% due to lower demand. ## Should we be concerned about having such a high percentage of trade with the US? - Yes, we should because we are dependent on the US economy, and when it went into recession, there was a trade deficit in 2009. - We can try to promote trade between other countries, so if the US economy goes into a recession, we have other countries to help balance out our economy. We are very dependent on natural resources which we have no control over pricing. - We can try and invest in other service (tourism, education, manufacturing, etc). # What is USMCA? - It's a trade deal between the US, Mexico and Canada. - Replaced NAFTA (North American Free Trade Agreement). - It's goal is to facilitate trade and investment between the 3 countries. - Stricter rule on where products are made means more cars that were parts have to be made in North America to avoid extra taxes, which support jobs in the region. - The deal has stronger protections for working conditions on wages and working conditions - New rules for online trade make it safer and easier to buy and sell things digitally. - Has more envirommental rules ensuring each country to protect nature. # Pros and Cons of USMCA ## Pros - Tariffs merely serve to protect inefficient businesses from competition. - Tariffs merely raise the costs of products to consumers. - Huge market under free trade brings prices down, benefitting consumers. ## Cons - Factories will close leading to higher unemployment rates. - To compete with the US, Mexico may lower its wages, reduce social benefits or intel structures. - An increase in imports and the overshadowing of cheap foreign products will mang to flow out of Canada. # What was NAFTA?, What is USMCA? - North American Free Trade Agreement - Free trade with the US is of particular significance because we have a huge amount of trade. - Free trade started in 1988 with the US. - In 1993, NAFTA was expanded to include Mexico. - NAFTA was renegiotiated in 2018 and called USMCA. # Review Questions 1. Explain the Benefits of trade (why nations trade) - Nations trade for a variety of reasons. - Firstly, the country gets access to goods and services, for example, if a country cannot produce natural resources, they trade. For example, if a country is forced to revieve natural resources, they don't possess, like oil. Nations also trade to maintain the balance of trade-- this is important because a country wants to make more money than they spend. For example, if a country needs to get oil, but it costs $100 for another country to get oil, they might try to find a cheaper price. For example, they might buy it for $70. 2. Define balance of trade, trade surplus, and trade deficit. - Balance of trade is the difference between the value of a country's exports and imports. - If the value of exports is greater than the value of imports, that is a trade surplus. - If the value of imports are greater than the value of exports, that is a trade deficit. 3. Describe the history of Canada's balance of trade and account for the 2009 trade deficit. - Canada's trade balance has mostly been positive because of its natural resources, like oil, minerals, gold etc. Canada has traditionally exported more than it imported, especially to the US. - In 2009, Canada experienced a trade deficit. This was due to a variety of factors. Firstly, because Canada is so dependent on oil, when the price of oil tanked from $200 to around $60, Canada's economy took a big hit. Although the quantity of oil bought was the same because the price of oil tanked 70%, Canada lost lots of money. Although imports in oil also decreased, the impact wasn't much. The price of gold also went up, contributing to Canada's exports. However, metal and alloy exports fell 29.9%. 4. Explain the importance of exports to the Canadian economy. - Exports are very important for the Canadian economy. They're important because Canada needs money to continue to import resources from other countries. It's also important because Canada needs to continue getting money. 5. Identify Canada's main trade partners and evaluate our dependence upon certain countries. -Our biggest trade partner is the the United States. More than half of our exports go to the United States, and around half of our imports come from the United States. This is troublesome because, if the United States suffer another recession, like in 2009, Canada's exports and imports will take a hit as well, which could lead to Canada losing a lot of money and could lead to trade deficits. 6. Define USMCA, Tariff, and Subsidy. - USMCA is a trade agreement signed by Canada, the US, and Mexico. It replaced NAFTA in 2020. It is to ensure fair trade. - Tariffs are like taxes applied on products that are being imported. - Subsidies are benefits applied to products made in the same country. These can include tax lowers etc. 7. Evaluate free trade and protectionism as trade policies. - Free trade is a policy where the government relaxes barriers such as tariffs, import quotas and subsidies, allowing goods and services to move freely across borders . The first one is tariffs. Tariffs are taxes put on goods imported into a country. For example, if you put a tariff on a candy, it's $60. Another form of protection is subsidies. Subsidies don't put extra money on an imported good, like extra taxes. # The Atlantic Fisheries Resource Management ## Key Concepts 1. Fishing is a renewable resource. 2. Fishing is Canada's oldest industry. 3. Canada's commercial fisheries operate in three broad regions: - Along the Atlantic and Pacific Coasts. - Inland, mainly near the Great Lakes and Lake Winnipeg. ## Fishes Caught by Fisherman 1. Ground Fish - Cod, Haddock, Redfish, etc. 2. Pelagic Fish - Tummy Mackerel, Albacore, etc. 3. Shell Fish - Clams, oysters, mussels, scallops, lobster, crabs. # Cod Moratorium deemed "the biggest layoff in Canadian History" - In 1992, the Canadian Government imposed a 2-year Cod Moratorium (a temporary ban on fishing Cod) in the Atlantic). - The Moratorium put 30,000 people out of work ( 120% of the provinces labor force) and cost the Canadian economy nearly $400 million per year. - As of 2023, the Cod Moratorium is still in place - the Cod population has not recovered. # Collapse of the Cod Fisheries: - Improved fishing techniques/destructive fishing techniques - Longlining - Can accidentally catch vulnerable species. - Also attracts non-target marine families (like turtles, seals, etc.) - Trawling - Destroys the natural seafloor habitat. - Catches unintended species. - Depletes fish stocks. ## Over Fishing 1. Over fishing is when more fish are caught than can be replaced by natural reproduction in a given year. 2. The reasons that cause overfishing are, in a large part, due to the world-wide fishing fleets that are five times as large as what is actually necessary to catch fish that our oceans can realistically support. # Illegal Fishing - Tragedy of the Commons ## Problems - A fishing net without captors = all marine life, fish or not. - Banned in 1992 by the UN because the destructive impact on ocean ecosystems. ## Impact on Marine Life - 321 dead animals, including critically endangered species, like the Southern Bluefin Tuna. # Basic Industry/Non-Basic Industry, Kap Skasing on - The basic industry is needed to support the local economy. - The basic industry is the base of the local economy. # Local country/Domestic Economy ## Flow of money $ → Paper → Alf → Growry → Banana → Non-Basic Industry → Leakage - Needed to support the local economy. - Basic because they need to support the economy. - Base of local economy. # Domestic Economy - Resources ($100) + Labor ($1000) + Labor Prices ($10000) = $11,500 GDP - Increases GDP - GDP here is $11,500 - GDP → Population → GDP - GDP per Capita = GDP / Population # China and India have such a high GPP because there are so many people. - They have many people because they are the oldest cultures. - They also have great resources. # Industrial Revolution - Machines began to help humans. - 1 machine could do 200 people. - Assembly lines. - Europe combined civil and engineering to increase their GDP. # The US GDP grows because they have a large reserve of oil. # 1990-2000 is the Industrial Revolution for China and India. - China returns because they have large populations AND machines. # China profues boys due to cultural norms and they often abort female children. # Middle East has lots of oil, but nothing to build machines with. # As GDP goes up, imports go up. # GPP = Total amount of goods and service produced in an economy. # Sectors of the Economy - Tertiary: Lawyer, Barber, Services - Secondary: Manufactured goods. - Primary: Raw Materials. - Every man-made product is composed of natural resources to some degree. # Examples - Skate - Leather - Agriculture - Stainles Steel - Mining - Plastic - Mining - Cotton/Nylon - Agriculture # We get everything from Agriculture, Mining, Fishing, and Forestries. # Three Sector Theory - Means that for a country to develop, it must move from primary, to secondary, to tertiary. - Tertiary makes the most money. - Primary to secondary is called industrialization. | 1900 (Energy) | 1950 (Education) | 2000 (Technology) | |---|---|---| | Lay $205 | Dining Table $1200 | Architected $450/hr | # Trade is the only way to earn money. # Why do nations trade? - Access to goods and services (X > M) - Help balance of trade - Lower Prices.