How Does The Canadian Dollar Affect Canada's Economy

Canada is currently sitting at a population of over 30 million people and is ranked 11th in the world in terms of exports (Canada: Economic Freedom, 2017). The economy in the country seems to be thriving very well with many skilled workers and plenty of jobs for most individuals in the civilian labor force. For the most part, Canada has always done pretty well in terms of having a successful economy. Starting in the early 50s Canada was thriving primarily off of the waterways unlike today the country thrives off selling petroleum, cars, and other things other countries need and want. Although this shift from a farm based economy too much more industrialization did not happen until after the Great War, it wasn't until the 1920s until Canada

21. What do many Canadian businesspeople NOT buy into with respect to the value of the Canadian dollar?

1. a) i) The content of the table is about Canada’s economic and financial situation divided into four sectors: real sector, fiscal sector, financial sector, and external factor. Each of the four sectors is divided into smaller categories. For example: real sector is divided into national accounts, production index, labor market, prices indices. The other three factors are also divided into smaller categories just like the real sector. In addition, this table has the most recent GDP to show the success of Canada’s economy. The overall goal of the data is to show Canada’s recent economic situation.

An inflation-control target range is 1% to 3%. The Bank of Canada targets to maintain inflation at 2% which is the midpoint of inflation-control target range. (Inflation, n.d.) In Canada, the inflation rate in December 2015 is 1.6%. It is the highest inflation rate in Canada since November 2004. Based on what we have learnt, inflation is an increase in the overall price level. In December 2015, the price level of imported goods and weak oil price increase due to the consequence of lower loonie. Besides, consumers pay 3.7% more on food as the price of vegetable and fruit become higher. They also pay more on shelter cost such as home, mortgage insurance and electricity. (Golubova, A., 2016) The higher the inflation rate, the lower the currency.

It is recommended that Canada adopt and implement a more active fiscal policy and cut interest rates to ensure the prices of commodities remain low. Low commodity prices can potentially stimulate demand over time and boost exports, benefiting the country’s economy, including its beleaguered commodities sector. At the same time, tax incentives for business and consumers to pursue alternative energy projects could further stimulate the economy and lead to strong consumer confidence in the levels of permanent income increasing over time. Buttressing short-term efforts such as cutting interest-rates with tax incentives to promote long-term growth and a shift toward a more diverse economy could help Canada address both its short-term and longer-term economic woes. Moreover, this two-tiered approach would likely generate an increase in consumer spending as the government’s approach would promote greater confidence in a more diverse Canadian economy being able to grow over time, thus providing individuals with greater spending

On the whole, Canada’s economy is in leading position. Since the World War Ⅱ，the economy of Canada has got a rapid increase. Canada’s population has doubled in the past 40 years from 1940 to 1980, but the GDP went up more than 20 times. In 1997, the GDP of Canada is 227,000,000,000 dollars, and in 2012, the number increase to 1,563,664,000,000 dollars. Now Canada is one of the richest countries in the world.

Currently, Canada has begun to slowly regain economic growth since the financial crisis and oil price decline (Lane 2015). To help increase economic growth the Bank of Canada has been providing a monetary stimulus (Lane 2015). The monetary stimulus has not helped to reach the point where the Canadian economy growth is self-sustaining. For the Canadian economy to reach self-sustaining growth it is important that the source of growth will have shift from consumption to an increase in exports. As you mentioned before, it is important for a policy to be introduced that helps increase the amount of investment. In addition, Canada needs to also implement a policy that will help increase exports.

The main part of the article is that inflation is rising faster than ever before. Because it is rising faster than before, and by a lot it is of great concern to Canadian citizens and requires attention.

The exchange rate is the currency of a country expressed in terms of another currency, for example, US dollar or other nation’s currency compared to Canadian dollar. Canada has a flexible system when it comes to exchange rate system. Canada targets inflation to maintain the domestic value of the Canadian dollar. The exchange rate for the Canadian dollar against US dollar and other currency can be affected by supply and demand for Canadian dollar in foreign exchange market. Canada competes with many other countries for the share of US market, which is one of their top traders. However, many factors can affect the currency of the Canadian dollar with dominant role of different point in time. These factors include; the world prices for commodities.

The Canadian dollar has dropped to a nearly record low, as the dollar and the oil prices are declining in tandem. Oil prices affect the Canadian dollar because oil extraction and refining account for a large part of Canada’s GDP and is a main economic driver. However, as a result of the weak Canadian dollar, Canadian exports have become very attractive and demand for non-energy exports has increased. Similarly, Canadian imports are becoming more expensive, resulting in a negative impact on consumers. The GDP of Canada is expected to decrease by $15-billion per year commencing at the end of 2016 (The Canadian Press, 2016). This is expected because most of foreign investment into Canada is made into the oil and gas sector, and as this sector becomes less attractive, reduced investment occurs. The Canadian stock market has declined 20% since mid-2014, the same time as the decrease in oil prices

Since the 1990s, Canada’s monetary policy has been built on a framework of stabilizing inflation at a target rate of two percent (Bank of Canada n.d.). Through expansionary or recessionary monetary policy, Canada must maintain its inflation rate to ensure that inflation is manageable. Canada’s currency, the

Canada’s prosperity and success can be attributed to many different events in history, in many different points in time. In this essay, I will be discussing how the Statute of Westminster, which was a British law that stated Canada’s new political powers (Hillmer, Norman. "Statute of Westminster." The Canadian Encyclopedia. Web. 27 Apr. 2015); the Bank of Canada, which solidified Canada’s economy during the Great Depression ("The Bank 's History." - Bank of Canada. Web. 27 Apr. 2015); and WWII, and how it changed Canada into a key part in the future. (C.P. Stacey. "Second World War (WWII)." The Canadian Encyclopedia. Web. 27 Apr. 2015); all contributed to the changing of Canada. During the period 1930 to 1945 Canada gave and developed as an independent country due to the Statute of Westminster giving us independence; the Bank of Canada, and how it stabilized our economy; and, our participation in WWII earning us more recognition and boosting our economy.

Canada’s currency has followed a similar movement to oil prices. In the decade before the oil price boom, Canada’s currency was never worth more than $0.75 when measured in American dollars. It declined in the late 90s and early 2000s and in August of 2002 was worth just $0.625 US. it rose greatly in the next five years-reaching a peak of $1.10 US in November 2007. Like oil, it has fallen since then but, has not reached levels seen in the 1990s. Today, Canadian-American exchange rate is still $0.91 and is projected to rise when oil prices do so(Bank of Canada)

The focus of this paper is to discuss the factors influencing the Gross Domestic Product (GDP) of Canada in the last five years. The discussion will cover details about the historical background of Canada’s economy; the factors contributing to the fluctuation of GDP; the impact of these factors on GDP; the economic trends that have contributed to this fluctuation of GDP; and the future of Canada’s GDP.

First time in the history of 30 years finally in 2007 in September, the Canadian dollar saw its peak against the U.S. dollar at 1.0052, from where it went on to see a hit at US$1.1024 at the time of trading, and again witnessed a high recently after China made an official announcement that it would branch out its approx. 1.44 trillion United States Dollar reserve from the U.S. dollar. However November saw the Canadian dollar come at same level with the value of the U.S. dollar, and in December the dollar had moved back to 0.98 United States Dollar, with reducing rate of interest rates implemented by the Bank of Canada because of their apprehension vis-à-vis its exports to the U.S. Canadian dollar went on to gain fame and Time magazine conferred the recognition of Canadian Newsmaker of the Year for 2007.