Industry in Canada benefits from access to the huge north american markets and lowest business costs among highly industrialised countries. The North American Free Trade Agreement (NAFTA) has practically integrated Canadian and US business economies.
Labour and Utility costs are lowest in Canada compared to other developed countries. Labour being the dominant business cost, Canada has thus become the lowest cost producer among them.
The dependence on exports also means that if it goes down, industrial growth could be affected adversely. However, rising domestic demand could offset this impact.
We look now at the important industry sectors in Canada
With a vast land area, agriculture has naturally developed in Canada. With industrialisation, agriculture has slipped from primary economic contributor to just one among the top five industries, contributing more than 8 percent of the GDP. The sector includes Food Service, Food Retailing & Wholesaling, Food & Beverages Processing and Primary Agriculture.
Primary Agriculture includes Red Meat, Dairy & Poultry, Grains & Oilseeds, Fruits & Vegetables and other farm produce.
With access of US and other world markets, the industry continues to prosper. It is supported by a network of R&D clusters and an efficient transportation infrastructure – extending from the Atlantic to the Pacific.
Information and Communication Technology
Canada has developed a vast communications and IT infrastructure. The ICT sector is growing faster than other sectors in Canada. It accounted for 5.6% of Gross Domestic Product in 2005. The industry consists of both manufacturing and services. Manufacture includes Computers and Communication Equipment, Audio & Video Equipment, Electronic Components etc. Services include Software & Computer Services, Telecommunication Services and Cable& Other Program Distribution.
Revenues from this sector, consisting of both manufacturing, services and rentals, is estimated at over $60 billion. ICT exports was growing at the time of this writing.
Auto industry is the largest manufacturing sector industry in Canada. Canada manufactures light and heavy vehicles, auto components and systems. The industry accounted for 12% of manufacturing GDP. The focus is on domestic sales. Business opportunities are in auto electronics, steering, climate control & fuel systems, and drivetrain components.
Canada has one of the largest aerospace businesses in the world, with a turnover exceeding $21 billion. 77 percent of the output is exported to world aerospace markets, mostly to neighboring United States.
With 400 firms and 75000 skilled employees, this sector contributes significantly to the economy.
Chemical industries in Canada (including petrochemicals utilising the low cost hydrocarbon stocks) enjoy the highest profitability and also generated $13 billion in export revenues.
Availability of resources, a large pool of highly educated employees (over 1000 chemical engineers graduate every year) and access to the US market has made Canada a highly attractive location for chemical industries.
With a sound science base, attractive business environment with active government support, skilled workforce, cost advantages and access to the world’s richest market biotechnology industry has developed rapidly in Canada.
The industry now has nearly 400 companies and generates nearly $4 billion in revenues. Canada is top in biomedical R&D and clinical trials.
The industry covers synthetic resins for making plastic products, plastic processing machinery, moulds & dies for shaping plastics and finally plastic products themselves. The industry is highly export oriented with $17 billion exported out of the production of $30 billion. Nearly 3000 companies were engaged in the industry.
Oil and Gas
Canada’s oil reserves are the second largest in the world, after Saudi Arabia’s. The country also has large reserves of untapped natural gas and oil sands. Oil & Gas Equipment manufacture also comes under this sector.
Medical devices equipment manufacture is a growing industry, offering infrastructural, cost and market access advantages. The industry receives federal funding for R&D, in which Canada has recognised strengths.