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Economy of Canada

Trade and Investment
The United States and Canada share the world's largest and most comprehensive trading relationship, which supports millions of jobs in each country. Canada is the leading export market for 35 of the 50 U.S. states and is a larger market for U.S. goods than all 27 countries of the European Union. The United States-Canada Free Trade Agreement (FTA), which went into effect in 1989, was superseded by the North American Free Trade Agreement among the United States, Canada, and Mexico (NAFTA) in 1994. NAFTA, which embraces more than 450 million people of the three North American countries, expanded upon FTA commitments to move toward reducing trade barriers and establishing agreed upon trade rules. It has also resolved long-standing bilateral irritants and liberalized rules in several areas, including agriculture, services, energy, financial services, investment, and government procurement. Since the implementation of NAFTA in 1994, total two-way merchandise trade between the United States and Canada has grown by more than 265%.

U.S. immigration and customs inspectors provide preclearance services at eight airports in Canada, allowing air travelers direct connections in the United States. During the 12 months ending in June 2007, nearly 21.9 million passengers flew between the United States and Canada on scheduled flights.

Canada is the single largest foreign supplier of energy to the United States--providing 20% of U.S. oil imports and 18% of U.S. natural gas imports. Recognition of the commercial viability of Canada's oil sands in Alberta has raised Canada's proven petroleum reserves to 170 billion barrels, making it the world's second-largest holder of reserves after Saudi Arabia. Canada and the United States operate an integrated electricity grid which meets jointly developed reliability standards and provide all of each other's electricity imports. Canada is a major supplier of electricity (mostly clean and renewable hydroelectric power) to New England, New York, the Upper Midwest, the Pacific Northwest, and California. Canadian uranium helps fuel U.S. nuclear power plants.

Bilateral trade disputes are managed through bilateral consultative forums or referral to World Trade Organization (WTO) or NAFTA dispute resolution procedures. For example, in response to WTO challenges by the United States, the two governments negotiated an agreement on magazines providing increased access for the U.S. publishing industry to the Canadian market, and Canada amended its patent laws to extend patent protection to 20 years. Canada has challenged U.S. trade remedy law in NAFTA and WTO dispute settlement mechanisms. The two countries negotiated the application to Canadian goods of “Buy America” provisions for state and local procurement under the American Recovery and Reinvestment Act. The United States has encouraged Canada to strengthen its intellectual property laws and enforcement. The United States and Canada also have resolved several major issues involving fisheries. By common agreement, the two countries submitted a Gulf of Maine boundary dispute to the International Court of Justice in 1981; both accepted the Court's October 12, 1984 ruling that delineated much of the boundary between the two countries' Exclusive Economic Zones.

The United States and Canada signed a Pacific Salmon Agreement in June 1999 that settled differences over implementation of the 1985 Pacific Salmon Treaty. In 2001, the two countries reached agreement on Yukon River salmon, implementing a new abundance-based resource management regime and effectively realizing coordinated management over all West Coast salmon fisheries. The United States and Canada reached agreement on sharing another trans-boundary marine resource, Pacific hake. The two countries also have a treaty on the joint management of albacore tuna in the Pacific, and closely cooperate on a range of bilateral fisheries issues and international high seas governance initiatives.

Canada and the United States have one of the world's largest investment relationships. The United States is Canada's largest foreign investor. Statistics Canada reports that at the end of 2007, the stock of U.S. foreign direct investment in Canada was $289 billion, or about 59% of total foreign direct investment in Canada. U.S. investment is primarily in Canada's mining and smelting industries, petroleum, chemicals, the manufacture of machinery and transportation equipment, and finance.

Canada is the fifth-largest foreign investor in the United States. At the end of 2006, the U.S. Commerce Department estimated that Canadian investment in the United States was $159 billion at historical cost basis. Canadian investment in the United States is concentrated in finance and insurance, manufacturing, banking, information and retail trade, and other services.

GDP (2008): $1.2 trillion.
Real GDP growth rate (2008): 2.7%.
Per capita GDP (2008): $47,131 (nominal); $37,722 (PPP).
Natural resources: Petroleum and natural gas, hydroelectric power, metals and minerals, fish, forests, wildlife, abundant fresh water.
Agriculture: Products--wheat, livestock and meat, feed grains, oil seeds, dairy products, tobacco, fruits, vegetables.
Industry: Types--motor vehicles and parts, machinery and equipment, aircraft and components, other diversified manufacturing, fish and forest products, processed and unprocessed minerals.
Trade: U.S. merchandise exports to Canada (2008)--$264.2 billion: motor vehicles and spare parts, industrial and electrical machinery, plastics, computers, chemicals, petroleum products and natural gas, and agricultural products. In 2008, 63% of Canada's imports came from the United States. U.S. merchandise imports from Canada (2008)--$347.9 billion: motor vehicles and spare parts, crude petroleum and natural gas, forest products, agricultural products, metals, industrial machinery, and aircraft. In 2008, 75% of Canada's exports went to the U.S.

Geography of Canada

Location: Northern North America, bordering the North Atlantic Ocean and North Pacific Ocean, north of the conterminous US Geographic coordinates: 60 00 N, 95 00 W Map references: North America
total: 9,976,140 sq km land: 9,220,970 sq km water: 755,170 sq km Area-comparative: slightly larger than the US Land boundaries: total: 8,893 km border countries: US 8,893 km (includes 2,477 km with Alaska) Coastline: 243,791 km Maritime claims: continental shelf: 200 nm or to the edge of the continental margin exclusive fishing zone: 200 nm territorial sea: 12 nm Climate: varies from temperate in south to subarctic and arctic in north Terrain: mostly plains with mountains in west and lowlands in southeast Elevation extremes: lowest point: Atlantic Ocean 0 m highest point: Mount Logan 5,950 m Natural resources: nickel, zinc, copper, gold, lead, molybdenum, potash, silver, fish, timber, wildlife, coal, petroleum, natural gas Land use: arable land: 5% permanent crops: 0% permanent pastures: 3% forests and woodland: 54% other: 38% (1993 est.) Irrigated land: 7,100 sq km (1993 est.) Natural hazards: continuous permafrost in north is a serious obstacle to development; cyclonic storms form east of the Rocky Mountains, a result of the mixing of air masses from the Arctic, Pacific, and North American interior, and produce most of the country's rain and snow Environment-current issues: air pollution and resulting acid rain severely affecting lakes and damaging forests; metal smelting, coal-burning utilities, and vehicle emissions impacting on agricultural and forest productivity; ocean waters becoming contaminated due to agricultural, industrial, mining, and forestry activities Environment-international agreements: party to: Air Pollution, Air Pollution-Nitrogen Oxides, Air Pollution-Persistent Organic Pollutants, Air Pollution-Sulphur 85, Air Pollution-Sulphur 94, Antarctic Treaty, Biodiversity, Climate Change, Desertification, Endangered Species, Environmental Modification, Hazardous Wastes, Marine Dumping, Nuclear Test Ban, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands, Whaling signed, but not ratified: Air Pollution-Volatile Organic Compounds, Antarctic-Environmental Protocol, Climate Change-Kyoto Protocol, Law of the Sea, Marine Life Conservation Geography-note: second-largest country in world (after Russia); strategic location between Russia and US via north polar route; nearly 90% of the population is concentrated within 160 km of the US/Canada border

Government of Canada

Canada is a constitutional monarchy with a federal system, a parliamentary government, and a democratic tradition dating from the late 18th century. The Charter of Rights and Freedoms, enacted in 1982, guarantees basic individual and group rights. Queen Elizabeth II, as Queen of Canada, is the head of state. She appoints the governor general, who serves as her representative in Canada, on the advice of the prime minister, usually for a 5-year term. The prime minister is the leader of the political party in power and is the head of the cabinet. The governing party remains in office as long as it retains majority support (“confidence”) in the House of Commons.

Canada's Parliament consists of an elected House of Commons and an appointed Senate. Legislative power rests with the 308-member Commons. According to Canadian law, elections are held every fourth October, but it is possible for the governor general to dissolve Parliament early if the cabinet loses the confidence of the House of Commons. The next election is scheduled for October 15, 2012, but as there is a minority government in the House, an election may take place before that date. Vacancies in the 105-member Senate, whose members serve until the age of 75, are filled by the governor general on the advice of the prime minister.

Criminal law, based largely on British law, is uniform throughout the nation and is under federal jurisdiction. Civil law is also based on the common law of England, except in Quebec, which has retained its own civil code patterned after that of France. Justice is administered by federal, provincial, and municipal courts.

Each province is governed by a premier and a single, elected legislative chamber. A lieutenant-governor, appointed by the governor general on the advice of the prime minister, represents the Queen, who is the legal head of state of each province.

Principal Government Officials
Head of State--Queen Elizabeth II
Governor General--Michaëlle Jean (Governor General-designate David L. Johnston assumes office October 1, 2010)
Prime Minister--Stephen Harper
Minister of Foreign Affairs--Lawrence Cannon
Ambassador to the United States--Gary Doer
Ambassador to the United Nations--John McNee

Canada maintains an embassy in the United States at 501 Pennsylvania Avenue, NW, Washington, DC 20001 (tel. 202-682-1740).

The Conservative Party leader, Stephen Harper, was sworn in as Canada's twenty-second Prime Minister on February 6, 2006, succeeding Paul Martin of the Liberal Party. Harper rose from the ranks of Progressive Conservative political party staffers, and was a member of Parliament for the defunct Reform Party and Canadian Alliance. He was elected the first leader of the Conservative Party of Canada when it was created in 2003 through the merger of the Canadian Alliance and the Progressive Conservative Party. The January 23, 2006 election victory by the Conservative Party ended 12 years of Liberal Party rule under Jean Chretien and Paul Martin. In the most recent federal election on October 14, 2008, the Conservatives formed a second minority government with 143 seats in the House of Commons and 38% of the vote. (As of September 2010, they held 144 seats.) The Liberals won 26% of the vote and 77 seats in the House of Commons. As the party with the second-largest number of seats, the Liberals form the "official opposition." In December 2008, the three opposition parties explored deposing the Harper government and replacing it with a Liberal-New Democratic coalition supported on confidence and budgetary matters by the Bloc Quebecois. The Liberal Party ultimately backed away from the plan in the face of strong public opposition in the English-speaking provinces.

The Conservatives made unexpected gains in Quebec by winning 10 seats in the January 2006 election, but failed to increase their number of seats in the province in the 2008 election. The Bloc Quebecois, a party advocating Quebec sovereignty, holds 48 of Quebec’s 75 seats. The social democratic New Democratic Party (NDP) now has 37 seats. One independent sits in Parliament.

Policy priorities of the Conservatives under Prime Minister Harper have remained fairly consistent since 2006: lower federal taxes, especially on consumption; reducing crime; increasing defense spending; asserting sovereignty in the Arctic; and raising the profile of Canada's role abroad, through its combat mission in Afghanistan, contributions to earthquake relief in Haiti, and renewed engagement in the Americas.

Quebec, which represents 23% of the national population and has 75 of the 308 seats in the House of Commons, seeks to preserve its distinctive French-speaking nature, and is perceived by the western provinces as wielding undue influence on the federal government. At least until the January 2006 election of Albertan Stephen Harper as Prime Minister, the western provinces had often expressed concern that Ottawa did not attend to their interests. Based upon a pledge of what it called “open federalism,” the Harper government ceded some power in the cultural and social domains while seeking to strengthen the federal role in economic areas such as inter-provincial trade and the regulation of securities.

National Unity
Popular support for sovereignty has declined in Quebec over the past decade. However, pride in that province's unique cultural and linguistic identity remains very strong and continues to be one of the central issues in the province’s politics. While most Quebec voters still aspire to constitutional reform recognizing Quebec’s distinctiveness, they generally appreciate the economic benefits of “Confederation” and aim to advance their francophone identity within the federal system. In the December 2008 provincial election, the ruling provincial Liberals garnered 42% of the vote, and Premier Jean Charest heads a narrow majority government with 66 of the 125 seats in the National Assembly. The opposition Parti Québécois holds 51 seats, and the third party, Action démocratique du Québec, holds 4 seats.

Type: Federation, parliamentary democracy, and constitutional monarchy.
Confederation: July 1, 1867.
Constitution: The British North America Act of 1867 patriated to Canada on April 17, 1982, the Charter of Rights and Freedoms, and unwritten custom. The British North America Act and the Charter of Rights and Freedoms are collectively referred to as the Constitution Act.
Branches: Executive--Queen Elizabeth II (head of state represented by a governor general), prime minister (head of government), cabinet. Legislative--bicameral Parliament (308-member House of Commons; 105-seat Senate). Judicial--Supreme Court.
Federal-level political parties: Liberal Party, Conservative Party of Canada, Bloc Quebecois (BQ), New Democratic Party (NDP).
Subdivisions: 10 provinces, 3 territories.

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History of Canada

Canada may have been populated as early as 10,000 years ago, according to carbon-dating of remains found by archeologists. It is believed that travel between Asia and Alaska took place during an ice age when a land bridge formed through the Bering Strait. Many diverse ethnic and cultural indigenous groups formed throughout Canada, the most well-known being the Inuit Indians of the Arctic region. Other indigenous groups include the Iroquois, the Huron, the Cree, the Bella Coola, and the Kwakiul.

The various cultures also had numerous languages and are usually grouped into common language families, from the Salish-speaking peoples of western Canada to the Iroquoian peoples of the east. Each culture also had unique social systems, ranging from bands of a few related families of the Inuit to the Iroquois Confederacy that united five separate tribes.

The American Indian population in Canada was decimated following the arrival of Europeans; in the mid-1980s they made up only 1% of the entire population. By the 1990s, however, the indigenous population had risen to 1.5%, and it is believed that this trend will continue.

Vikings are believed to have landed in Canada in the 10th century. In 1497, John Cabot reached Newfoundland and claimed for Britain a large portion of the Atlantic seaboard. Cabot was followed by French explorer Jacques Cartier, who landed at the mouth of the St. Lawrence River in 1534 and claimed the Gaspe Peninsula for France. Canada's early history was dominated by rivalry between France and Britain.

While the British settled along the coast, the French pushed rapidly into the interior. For more than a century, Canada was a French colony. The founder and settler of French Canada was Samuel de Champlain, who founded Quebec City in 1608 and established a number of other settlements along the Bay of Fundy and the St. Lawrence River. Explorers, traders, and missionaries, including Marquette, Joliet, and La Salle, extended the French influence in "New France."

Following the early years of settlement, the French and English pioneers engaged in the highly competitive fur trade. Canada's political shape began to emerge from the Battle of the Plains of Abraham at Quebec, where the British defeated the French in 1759 and took over the French colonies in North America. The memory of that event still resonates for French-Canadians. Although New France came under British control, it was permitted to retain its religious and civil code. Canada is still attempting to find a constitutional formula that will satisfy the aspirations of French-speaking Quebec.

During the American Revolution, French and British colonists in Canada rebuffed the overtures of American leaders and chose British rule over independence in association with the United States. A colonial raid on Quebec in 1775 was unsuccessful. In the War of 1812, U.S.-British rivalry in North America again resulted in the invasion of Canada.

Several events accelerated the union of the British colonies in Canada into a new nation. First, the political uprisings of 1837 in both English Upper Canada and French Lower Canada led to the creation of local governments and to greater citizen participation in the government. Second, at the end of the American Civil War, it was feared that the United States might turn against British North America. Finally, the expansion of the American west and the slower settlement of the Canadian west encouraged the development of a Canadian transcontinental railroad and the perception among eastern Canadian political leaders that a Canadian federation from the Atlantic to the Pacific had to be achieved if western Canada was to avoid absorption by the United States.

The British North America Act of 1867 created the new nation of Canada, comprising four provinces--Ontario, Quebec, New Brunswick, and Nova Scotia. It provided for a federal union and for a parliamentary system of government. Six other provinces eventually entered the confederation; the last was Newfoundland in 1949.

People of Canada

Of Canada's 33.7 million people, 80% live within 160 kilometers (100 mi.) of the U.S. border, and half live in the southeastern part of the country near the Great Lakes and the St. Lawrence River. The population of Canada is less than three people per square kilometer. Canada's more than 6 million French-speaking citizens are primarily descendants of colonists who settled the country three centuries ago. The English-speaking community has increased mostly as a result of immigration from the United Kingdom. The largest influx from the United States occurred during the American Revolution when thousands of "Empire Loyalists" fled to Canada. Other Canadians have indigenous, other European, and Asian origins.

Four major influences have helped shape Canadian culture: a multicultural heritage (including aboriginal); English-French bilingualism; sustained government funding for artistic and literary pursuits; and the abundance and availability of U.S. cultural productions.

Canadians view their country as a cultural mosaic and not as a melting pot. Inuit (Eskimo), Indian nations, French speakers, English speakers, and immigrant groups have all sought to maintain their unique cultural identities. Such efforts have been encouraged by extensive government funding of the arts. The government-funded Canada Council has become the major patron of all forms of creative endeavor in Canada.

Canada has a rich literary tradition, with many influential writers in both English and French. Other prominent Canadian artists include a school of painters known as "The Group of Seven;" Canadian filmmakers such as Harry Rasky and Bill Mason, who are world leaders in producing documentaries; and a number of world-class dance troupes, orchestras, and repertory theaters.

Nationality: Noun and adjective--Canadian(s).
Population (2009 est.): 33.7 million.
Ethnic groups: British/Irish 28%, French 23%, other European 15%, Asian/Arab/African 6%, indigenous Amerindian 2%, mixed background 26%.
Religions: Roman Catholic 43.6%, Protestant 29.2%, other Christian 4.3%, Muslim 2.0%, Jewish 1.1%, Buddhist 1.0%, Hindu 1.0% other 1.3%, none 16.5%.
Languages: English (official) 57.8%, French (official) 22.1%, other 20.1% (including Chinese and aboriginal languages).
Education: Literacy--99% of population aged 15 and over has at least a ninth-grade education.
Health: Infant mortality rate--5.4/1,000. Life expectancy--77.7 yrs. male, 82.5 yrs. female.
Work force (2009, 18.4 million): Goods-producing sector--25%, of which: manufacturing 15%; construction 6%; agriculture 2%; natural resources 2%; utilities 1%. Service-producing sector--75%, of which: trade 16%; health care and social assistance 11%; educational services 7%, accommodation and food services 7%; professional, scientific, and technical services 7%; finance 6%; public administration 5%; transportation and warehousing 5%; information, culture, and recreation 5%; other services 4%.