Canada's Economic Ties with the United States: An In-depth Analysis of Dependency and Ownership
Canada and the United States share one of the largest trading relationships in the world, with nearly $1.3 trillion in bilateral trade and goods and services exchanged in 2022. This economic alliance is built on a complex web of dependencies and ownership that extends far beyond simple transactional exchanges.
The Surface and Underlying Ownership of Canada
It is often stated that Canada has a large amount of Canadian ownership, but this is far from the truth. Figures show that companies such as Bill Gates are major stakeholders in Canada, owning vast amounts of land and shares in major Canadian corporations. Similarly, international buyers have acquired significant chunks of Canada's real estate, such as the Banff Springs Hotel and McDonald Hotel in Edmonton. This raises questions about how much of Canada actually belongs to its citizens.
Foreign ownership of Canadian companies is extensive. Large corporations like Tangerine Bank, FortisBC, and even renowned entertainment companies like Cirque du Soleil are partially or wholly owned by international investors. In many cases, these foreign owners benefit directly from the Canadian market, taking significant portions of profits when Canadian companies succeed.
The Evident Dependence on the American Economy
The question is not just about ownership but also about dependency. Significant sectors of Canada's economy are heavily dependent on the U.S. market. Petroleum is a prime example, as the U.S. is Canada's primary export market for oil. However, given oil's global nature, this dependency has some limits.
Other areas, such as energy (including natural gas, thermal electricity, nuclear electricity, and hydroelectricity), vehicle manufacturing, and certain metals, demonstrate intricate ties with the U.S. For instance, American energy needs drive much of Canada's energy sales, making Canada a reliable supplier despite global fluctuations. Automotive exports directly impact both economies, with American consumer demand significantly influencing Canadian vehicle sales and manufacturing.
Metal markets are also cyclic but show strong trade relationships with the U.S. Canada's lumber market is closely tied to overall U.S. demand, while paper products still have a significant export market globally.
Aircraft and machinery manufacturing also shed light on dependency. The U.S. is the leading market for both, and demand often mirrors the health of the American economy. These sectors highlight how intertwined the Canadian and U.S. economies truly are.
Strategies to Mitigate Dependency on the U.S. Market
Despite the strong connection, Canada has been implementing strategies to reduce its dependency on the American market. Efforts are ongoing to diversify export markets and negotiate new trade treaties with other nations. Canada currently maintains trade deals with a multitude of countries, giving its businesses access to the largest markets globally.
Future forecasts suggest that while the U.S. will remain a significant market, Canada's diversification efforts will help to stabilize its economy. The Canadian government has set ambitious targets to increase non-American exports by 50% by 2025, aiming to bolster its position in the global economy.
Conclusion
The economic relationship between Canada and the United States is multifaceted and complex. While there is significant interdependency, it is not entirely one-directional. Both countries benefit from the trade relationship, but the question remains: how much of Canada’s prosperity and ownership is truly in the hands of its citizens?
The current and future economic landscape shows that Canada is actively working to diversify its markets and strengthen its position on the global stage. This will undoubtedly play a key role in shaping the country's economic future.