Economic Analysis


Population 37.0 Million
GDP per capita 46,290 US$
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major macro economic indicators

  2017 2018 2019 (e) 2020 (f)
GDP growth (%) 3.0 1.9 1.5 -6,1
Inflation (yearly average, %) 1.6 2.3 2.0 1.7
Budget balance * (% GDP) -0.3 -0.4 -1.2 -1.4
Current account balance (% GDP) -2.8 -2.6 -2.0 -2.2
Public debt (% GDP) 90.1 89.9 87.5 86.2

(e): Estimate. (f): Forecast. *Fiscal year from April to March.


  • Abundant and diversified energy and mineral resources
  • Fifth-largest oil and gas producer in the world
  • Strong, well-capitalized and well-supervised banking sector
  • Fiscal rigour
  • Immediate proximity to the large US market
  • All-round development of trade relations (CETA with the EU)
  • Excellent business environment


  • Dependent on the US economy (1/2 of FDI stock, integration of the two countries’ automotive industries) and energy prices
  • Loss of competitiveness in manufacturing companies due to low labour productivity
  • Insufficient R&D expenditure
  • Decrease in the share of the working population, only just slowed down by high selective immigration
  • High household debt (170% of disposable income)/house prices very high although stabilising
  • Energy exports weakened by inadequate supply pipelines to the coasts and the United States, and by the US’s own resources


Headwinds to slow growth further

Growth is expected to continue to slacken in 2020 against a backdrop of trade tensions and a sharp slowdown in the United States. Activity will therefore remain largely driven by household consumption, thanks to a historically low unemployment rate (5.5% in October 2019), the substantial increase in real wages, which is being supported by recruitment difficulties, and the increase in the basic personal income-tax exemption threshold. The central bank may lower its key interest rate in 2020, after being forced to suspend monetary tightening and hold its rate at 1.75% in 2019 owing to international conditions. Residential construction is expected to recover – particularly in the provinces of Quebec and Ontario, where the unemployment rate is lower than the national average – after being held back in recent years by prudential rules aimed at curbing the risks associated with real estate loans. In contrast, business investment will continue to be severely affected by uncertainty linked to the international environment, despite a persistently high production capacity utilization rate (83% in industry in mid-2019). The energy sector will continue to be hampered by slightly lower oil prices and a lack of transportation capacity, as multiple infrastructure projects, including the USD 5.8 billion Trans Mountain pipeline expansion, are not expected to bear fruit until 2021. Conversely, since the government is pursuing an accommodative fiscal policy, public consumption will contribute positively to growth. Externally, exports will sharply slow, hurt by the economic situation in the United States (75% of total exports). The USMCA deal (renegotiated NAFTA) signed in September 2018 is expected to be ratified in 2020. Ratification would be a positive but not a decisive factor, as conditions are expected to remain unchanged in most sectors, with the exception of dairy products, where Canada has opened up 3.5% of its market to the United States. Although US customs duties on imports of steel and aluminium were dropped in May 2019, metallurgy will suffer from a slowdown in its main markets, particularly the automotive sector. At the same time, with imports rebounding in line with strong domestic demand, foreign trade will make a much smaller contribution to growth.


Expansionary 2020 budget following the elections

Following the elections, the government is set to implement an expansionary fiscal policy in 2020, with the first measure being the income tax cut (CAD 3 billion or 0.1% of GDP). In addition, increases in spending are expected in health, social and environmental issues – areas dear to the New Democratic Party (NDP), whose support could be important - as well as in public transport (0.1% of GDP, according to the prime minister’s programme). Apart from the 3% tax on digital companies (estimated revenues of CAD 500 million), no major additional measures have been announced on the revenue side. The public deficit is therefore expected to widen, while remaining small, and public debt (two-thirds of which is provincial or local) will slowly decline. However, after deducting the assets held by the Canada and Quebec Pension Plans, net public debt is only 27% of GDP. Most of the provincial debt is contracted by Ontario and Quebec, both of which have debt equivalent to 40% of GDP.

The current account deficit is expected to increase slightly in 2020, driven by the trade balance, which is set to deteriorate because of cooler exports. The balances of goods and services show a consistent deficit (about 1% of GDP each). With the income balance also in deficit (0.5%), mainly due to the repatriation of dividends from foreign portfolio investments, the country has a persistent current account deficit. This is financed by significant foreign investments, particularly portfolio investments. The substantial external debt (119% of GDP in mid-2019) is largely contracted by the private sector (40% of the total by banks, 33% by companies).


Prime Minister Trudeau’s minority government

Justin Trudeau managed to keep his post as Prime Minister in the October 2019 parliamentary elections, but will now be forced to govern as a minority, as his centre-left Liberal Party won only 157 of the 338 seats (-27 seats compared with the 2015 elections). Although on the rise, the right-wing Conservative Party was unable to regain power and will remain the main opposition party with 121 seats (+22). The big winner in the election was the separatist Bloc Québécois (BQ), which became the third largest political force in Parliament with 32 seats (+22), taking 32.5% of votes in Quebec. Despite a significant decline in results (24 seats, -20), the left-wing NDP should also play a leading role. Justin Trudeau has decided to govern as a minority, refusing to form a formal coalition but building different alliances on an issue-by-issue basis. The NDP and the BQ supported the government during the first test of confidence in December (votes on supplementary spending estimates). While minority governments are inherently less stable (none of the 13 previous minority governments has seen out its entire term), holding new elections soon would not seem to be in the interest of any of the main parties, since all but the BQ recorded disappointing results in 2019.


Last update: Février 2020


A single law governs bills of exchange, promissory notes and cheques throughout Canada; however this law is frequently interpreted according to common law precedents in the nine provinces or according to the Civil Code in Quebec. As such, sellers are well advised to accept such payment methods unless where long-term commercial relations, based on mutual trust, have been established with buyers.

Centralised accounts, which greatly simplify the settlement process by centralising settlement procedures between locally based buyers and sellers, are also used within Canada.

SWIFT bank transfers are the most commonly used payment method for international transactions. The majority of Canadian banks are connected to the SWIFT network, offering a rapid, reliable and cost-effective means of payment, notwithstanding the fact that payment is dependent upon the client’s good faith insofar as only the issuer takes the decision to order payment.

The Large Value Transfer System (LVTS) –introduced by the Canadian Payments Association in February 1999 – is a real time electronic fund transfer system that facilitates electronic transfers of Canadian dollars countrywide and can also handle the Canadian portion of international operations.

The letter of credit (L/C) is also frequently used.

Debt Collection

Canada’s Constitution Act of 1867, amended in April 1982, divides judicial authority between the federal and provincial Governments. Therefore, each province is responsible for administering justice, organizing provincial courts and enacting the civil procedure rules applicable in its territory. Though the names of courts vary between provinces, the same legal system applies throughout the country, bar Quebec.

Within each province, provincial courts hear most disputes of all kinds concerning small claims, and superior courts hear large claims – for example, the Quebec superior court hears civil and commercial disputes exceeding CAD 70,000 and jury trials of criminal cases. Canadian superior courts comprise two distinct divisions: a court of first instance and a court of appeal.

At federal level, the Supreme Court of Canada, in Ottawa, and only with “leave” of the Court itself (leave is granted if the case raises an important question of law), hears appeals against decisions handed down by the provincial appeal courts, or by the Canadian Federal Court (stating in appeal division), which has special jurisdiction in matters concerning maritime law, immigration, customs and excise, intellectual property, disputes between provinces, and so on.

The collection process begins with the issuance of a final notice, or “seven day letter”, reminding the debtor of his obligation to pay together with any contractually agreed interest penalties.

Ordinary proceedings

Ordinary legal action – even if the vocabulary used to describe it may vary within the country – proceeds in three phases.

Firstly, the “writ of summons” whereby the plaintiff files his claim against the defendant with the court, then the “examination for discovery”, which outlines the claim against the defendant and takes into account the evidence to be submitted by each party to the court and, finally, the “trial proper” during which the judge hears the adverse parties and their respective witnesses, who are subject to examination and cross-examination by their respective legal counsels, to clarify the facts of the case before making a ruling.

Enforcement of a Legal Decision

In most cases, except when the judge decides otherwise, each party is required to bear the full cost of the fees of his own attorney whatever the outcome of the proceedings. As for court costs, the rule stipulates that the winning party may demand payment by the losing party based on a statement of expenses duly approved by the court clerk.

The change precisely concerns institution of a standard “originating petition” (requête introductive d’instance), with the payment of judicial costs joined, introducing a 180-day time limit by which the proceedings must be scheduled for “investigation and hearings” (pour enquête et audition), delivery of a judgement on the content within a timeframe of six months after the case was heard and encouragement of the parties to submit to a conciliation stage during legal proceedings, with the judge presiding over an “amicable settlement conference” (conférence de règlement à l’amiable).

Insolvency Proceedings

The two primary pieces of insolvency related legislation in Canada are the Companies' Creditors Arrangement Act (the CCAA) and the Bankruptcy and Insolvency Act (the BIA). The BIA is the principal federal legislation in Canada applicable to bankruptcies and insolvencies. It governs both voluntary and involuntary bankruptcy liquidations as well as debtor reorganisations. The CCAA is specialized companion legislation designed to assist larger corporations to reorganise their affairs through a debtor-in-possession process.

Insolvency trend Canada
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