The comparison between the economies of Canada and the United States is generally far more of a concern to Canadians than to Americans.

Canada is under constant pressure to remain competitive with the United States. If it does not then forces such as the brain drain will occur, where the top Canadians emigrate to the U.S. If Canada falls behind corporations will also leave for the United States. The U.S. has far less to fear as any losses to Canada can be easily managed. A brain drain or human capital flight is an emigration of trained and talented individuals for other nations or jurisdictions, due to conflict or lack of opportunity or health hazards where they are living. ...

Despite the contrasts listed below Canada and the United States are extremely similar economically. They are both developed countries and are thus vastly closer to each other than to the majority of the world's countries. Canada also is by almost all economic indices closer to the United States than it is to Europe. A developed country is a country that has achieved (currently or historically) a high degree of industrialization, and which enjoys the higher standards of living which wealth and technology make possible. ...

Boom and bust cycles in Canada and the United States are closely linked as are many indices such as inflation and interest rates. Demographic patterns are also similar, with a slightly higher birth rate in the U.S. and a higher immigration rate in Canada. An interest rate is the rental price of money. ... A demographic or demographic profile is a term used in marketing and broadcasting, to describe a demographic grouping or a market segment. ...

Geography

In its quest to remain competitive Canada starts at an immediate disadvantage. Canada's harsh climate leads to high costs for such things as heating. Workers are less likely to immigrate to Canada and the wealthy are more likely to leave for tropical climates.

The climate of Canada also contributes to higher transportation costs as planes, trains, and automobiles are all more expensive to operate than in much of the United States. Canada's low population density also makes transportation costs higher. More of a historical concern was that much of the country lacks natural river systems that could be easily used for transportation. Canada's terrain is also somewhat more rugged than the United States. The Rocky Mountains are more of an obstacle, and the mass of the Canadian Shield provides a formidable barrier to any links between Ontario and Manitoba. Rocky Mountain National Park (photo courtesy of NPS) The Rocky Mountains, often called the Rockies, are a broad mountain range in western North America. ... Canadian Shield The Canadian Shield is a large craton in eastern and central Canada and adjacent portions of the United States, composed of bare rock dating to the Precambrian Era (between 4. ... Motto: Ut Incepit Fidelis Sic Permanet (Loyal it began, loyal it remains) Other Canadian provinces and territories Capital Toronto Largest city Toronto Lieutenant Governor James K. Bartleman Premier Dalton McGuinty (Liberal) Area 1,076,395 km² (4th)  - Land 917,741 km²  - Water 158,654 km² (14. ... Motto: Gloriosus et Liber (Glorious and free) Other Canadian provinces and territories Capital Winnipeg Largest city Winnipeg Lieutenant Governor John Harvard Premier Gary Doer (NDP) Area 647,797 km² (8th)  - Land 553,556 km²  - Water 64,241 km² (14. ...

Canada does have some distinct geographic advantages. The large river systems in the north are sources of cheap hydro-electric power. The main advantage is Canada's vast supplies of natural resources. While the United States has large supplies of resources, these are not enough to meet domestic demands and they are forced to import many raw materials, a great deal of which come from Canada. By contrast Canada is a net exporter of resources. This leads to an important difference as increases in the price of resources boosts the Canadian economy while hurting the American. For example a rise in oil prices generally causes a fall in the Dow Jones but an increase in the TSX. Hydroelectric dam diagram The waters of Llyn Stwlan, the upper reservoir of the Ffestiniog Pumped-Storage Scheme in north Wales, can just be glimpsed on the right. ... Oil is a generic term for organic liquids that are not miscible with water. ... Dow Jones & Company (NYSE: DJ), based in the United States is a publishing and financial information firm. ... The Toronto Stock Exchange (TSX) is Canadas largest stock exchange, and the division of the TSX Group that holds senior equities. ...

Government

Differences between government intervention in the economies of the two countries is most closely examined in Canada, because some feel that policies that more closely emulate the U.S. are preferable, while others disagree.

Taxation

The average tax rate in Canada is higher than in the United States. In Canada total tax revenue for every level of government equals about 36.8% of GDP, in the U.S. this is closer to 30%. There is some regional variation, however. A resident of oil rich Alberta pays less in taxes than a resident of high tax Massachusetts. Tax - Wikipedia, the free encyclopedia /**/ @import /skins-1. ... Motto: Fortis et Liber (Strong and free) Other Canadian provinces and territories Capital Edmonton Largest city Calgary Lieutenant Governor Norman Kwong Premier Ralph Klein (PC) Area 661,848 km² (6th)  - Land 642,317 km²  - Water 19,531 km² (2. ... State nickname: Bay State Other U.S. States Capital Boston Largest city Boston Governor Mitt Romney (R) Official languages English Area 27,360 km² (44th)  - Land 20,317 km²  - Water 7,043 km² (25. ...

The taxes are applied differently as well. Canada's tax system is more heavily biased against the highest income earners, thus while Canada's tax rate is higher on average, the bottom fifty percent of the population is roughly as taxed as in the United States.

Canada also has a national sales tax of 7% on all purchases, while the U.S. federal government relies almost entirely on income taxes. A sales tax is a tax on consumption. ... Income tax is a direct tax which is levied on the income of private individuals. ...

Canada has no inheritance tax while the United States still does, but the U.S. tax is currently scheduled to be abolished. Inheritance tax, also known in some countries outside the United States as a death duty and referred to as an estate tax within the U.S, is a form of tax levied upon the bequest that a person may make in their will to a living person or organisation. ...

Social Programs

For its higher taxes Canada has a more complete system of social programs than the United States. These differences include having all major universities receive government funding, having a national broadcaster in the CBC and, most notably, having a fully government-funded health care system. The United States, however, spends far more on the military than Canada. A university is an institution of higher education and of research, which grants academic degrees. ... The Canadian Broadcasting Corporation, commonly known by the abbreviation CBC, is Canadas government-owned radio and television broadcaster. ... Health care or healthcare is an industry associated with the the prevention, treatment, and management of illness along with the promotion of mental, physical and spiritual well-being through the services offered by the medical and allied health professions. ...

The greatest difference in social programs is in health care. The United States spends far more of its per capita GDP on health care than does Canada. Canadians, however, receive comparable care and most figures such as life expectancy and infant mortality are better in Canada. Another advantage is that the Canadian health care system is also very attractive to employers, as in Canada health care is mostly paid through income taxes, while in the United States most companies have to extend health benefits to full-time employees, something they do not have to do in Canada. The main disadvantage of the Canadian system are the long lines and waiting periods, especially for procedures of less importance. Due to this, many Canadians go to the United States to buy quick medical treatment. Life expectancy is the most likely number of years remaining for a living being (or the average for a class of living beings) of a given age to live. ... For early system failures, see failure rate. ... Insurance is the business of providing protection against financial aspects of risk, such as those to property, life, health and legal liability. ...

See also: Canadian and American health care systems compared The comparison of the health care systems of Canada and the United States is of great importance to both nations. ...

Anti-trust

The United States has since the Sherman Anti-Trust Act been strongly opposed to monopolies. In Canada this has been far less of an issue and Canada has never had rigorously enforced rules against monopolization. The Sherman Antitrust Act was the first government action to limit trusts (A combination of firms or corporations who agree not to lower prices below a certain rate for the purpose of reducing competition and controlling prices throughout a business or an industry). ... This article is about economic monopoly. ...

Fiscal and Monetary Policy

Canada is generally forced to follow American monetary policy quite closely, any large difference in interest rates could quickly lead to large problems for the Canadian economy. The U.S. Federal Reserve and the Bank of Canada both staunchly believe in fighting inflation while neither aggressively pursue policies of full employment. One difference that has emerged recently is that while Canada is still hewing closely to the balanced budgets policies of the 1990s the United States has moved into a heavy deficit, a policy both countries followed in the 1970s and 1980s. Monetary policy is the process of managing a nations money supply to achieve specific goals—such as constraining inflation, achieving full employment or more well-being. ... An interest rate is the rental price of money. ... The Federal Reserve System is headquartered in the Eccles Building on Constitution Avenue in Washington, DC. The Federal Reserve System (also the Federal Reserve; informally The Fed) is the privately-operated central banking system of the United States. ... The Bank of Canada Building in Ottawa The Bank of Canada is Canadas central bank. ... In economics, full employment has more than one meaning. ... Budget generally refers to a list of all planned expenses and revenues. ... A budget deficit occurs when an entity (often a government) spends more money than it takes in. ...

Political Turbulence

Over the last few decades the Canadian economy may have been hurt by the threat of Quebec separatism, and Quebec's economy was almost certainly damaged. In an earlier era turbulence in the United States from the civil rights movement and Vietnam War may have hurt that country's economy. This also sometimes benefited Canadians as draft dodgers during the Vietnam War created a reverse brain drain that lasted for many years. Quebec The Quebec sovereignty movement is a movement calling for the attainment of sovereignty for Quebec, a province of the country of Canada. ... Civil rights or positive rights are those legal rights retained by citizens and protected by the government. ... The Vietnam War or Second Indochina War (Vietnamese: known as the American War Chiến Tranh Chống Mỹ Cứu Nước, literally the War Against the Americans to Save the Nation) was a war between the governments of North and South Vietnam and their domestic and foreign political... Their actions were criminal offences and once they had left the country draft dodgers could not return or they would be arrested. ... The Vietnam War or Second Indochina War (Vietnamese: known as the American War Chiến Tranh Chống Mỹ Cứu Nước, literally the War Against the Americans to Save the Nation) was a war between the governments of North and South Vietnam and their domestic and foreign political... A brain drain or human capital flight is an emigration of trained and talented individuals for other nations or jurisdictions, due to conflict or lack of opportunity or health hazards where they are living. ...

Market Size

One of the most important differences historically between Canada and the United States was the size of the two markets. When both nations had high tariffs the two countries did not have a unified market. Canada's smaller market led to higher prices and greater inefficiency.

A good example of this is the automobile industry, which can be clearly demarcated into two periods: before and after the free trade creating Auto Pact of 1969. Before Canada had its own production lines creating each of the models that would be sold in Canada. These branch plant factories would only make small production runs of each vehicle, requiring frequent, and expensive retoolings. The factories would also generally be smaller. Fewer varieties were available to Canadian consumers and prices were generally higher. However, these cars were almost all still made by American companies. After the Auto Pact, the industry was transformed as a unified North American market was created. The Canadian factories were rebuilt to be much larger, but to make only one model that would be sold in both countries creating large economies of scale. The prices of cars fell in Canada as wages and total employment in the automobile sector increased. The Canada-United States Automotive Agreement more commonly known as the Auto Pact was an important trade agreement between Canada and the United States. ... 1969 was a common year starting on Wednesday (the link is to a full 1969 calendar). ... The branch plant economy is a term used to describe the phenomonon of U.S. companies building factories (branch plants) in Canada, primarily to sell products in the Canadian market. ... ...

After the Second World War tariffs between the two countries gradually fell, with full free trade being established by the 1988 Canada-United States Free Trade Agreement. Some industries are still protected, however. These are mostly sensitive areas such cultural industries including publishing, television, and newspapers, which all of have stringent foreign ownership rules. Other areas such as the transport industry are also protected with Canadian control of the airlines and trains being viewed as in the national interest. Mushroom cloud from the nuclear explosion over Nagasaki rising 18 km into the air. ... Free trade is an economic concept referring to the selling of products between countries without tariffs or other trade barriers. ... 1988 is a leap year starting on a Friday of the Gregorian calendar. ... The Free Trade Agreement (FTA) was a trade agreement reached by Canada and the United States in October of 1987. ...

This tends to create far more monopolies in Canada. For instance the air travel industry in Canada is dominated by a single airline, Air Canada. Canada has long had to make a trade-off between monopolization and efficiency which the United States has not. The United States can support a number of airlines that are big enough to operate efficiently, and still have a competitive market. Canadians are forced to choose between small inefficient airlines that would be competitive, or one monopolistic airline that will generate its own inefficiency. Air Canada, (IATA: AC, ICAO: ACA, and Callsign: Air Canada) is owned by ACE Aviation Holdings Inc. ...

Another example of this trade off is the book industry which has recently switched models. Until the 1990s Canada had many small and fairly inefficient book stores. Then Chapters entered the market and quickly created a near monopoly, eliminating the inefficiencies of smaller stores but potentially leading to a monopolistically set price and limited choice of books. // Events and trends The 1990s are generally classified as having moved slightly away from the more conservative 1980s, but keeping the same mind-set. ... Chapters is a bookstore chain throughout Canada. ...

The larger market of the United States also contributes to the brain drain. Top Canadians will often find greater opportunities in the United States. An example of this is the entertainment industry. If Jim Carrey had remained in the Canadian entertainment industry, he would have made far less money and would not be world famous. The Canadian film industry will never be able to match the American one because Canada’s thirty million people cannot buy enough tickets to allow hundred million dollar budgets and stars that earn twenty million dollars per film. Jim Carrey James Eugene Carrey (born January 17, 1962, Newmarket, Ontario, Canada) is a Canadian/American actor and comedian. ...

Banking

Canada and the United States have long had very different banking systems. The United States' was copied from England while Canada's was taken from Scotland. The United States traditionally has had a plethora of banks, all with very few branches. This has lead to a competitive but unstable system, with many thousands of banks having collapsed during U.S. history. Canada has always had far fewer banks per capita, but the banks have been larger and quickly became nationwide. Canadian banks have many branches and distributed assets and Canada has only had one major bank, the Homestead Bank, collapse in its history. This disbursement has continued to this day. In 2002 in Canada the six largest banks controlled 90 percent of Canadian domestic assets, while the five largest U.S. banks controlled only 9.7 percent of their domestic assets. Royal motto: Dieu et mon droit (French: God and my right) Englands location within the UK Official language English de facto Capital London de facto Largest city London Area  - Total Ranked 1st UK 130,395 km² Population  - Total (2001)  - Density Ranked 1st UK 49,138,831 377/km² Ethnicity... Scotland (Alba in Scottish Gaelic) is a country in northwest Europe and a constituent nation of the United Kingdom. ...

In real terms Canadian banks are much smaller. In 2003 the three largest banks in America had assets equal to the entire 67 banks (only 14 domestic) operating in Canada. In relative size Canadian banks are more competitive. The largest Canadian bank has 1300 branches while in the U.S. the four largest banks have just over 2000 branches each.

Canada's banks have traditionally been much fiercer competitors internationally. In part this is rooted in Canada's smaller market. For Canadian banks international exchange was always a central concern. For American banks domestic banking was paramount. In the 1920s in the American economic centre of New York Canadian banks dominated the international banking sector due to greater expertise and focus. Thus Canadian banks came to have far wider spread networks. Much of the banking system in the West Indies is controlled by the Canadian banks. Canadian banks also have far more of a presence in the United States than American firms do in Canada. In part this is because American firms cannot buy Canadian banks, but Canadian banks have, at times, been able to buy American ones. Since the large Canadian banks already operated nationwide chains of a thousand or more branches, they find it relatively easy to integrate smaller chains of American banks into their systems. In recent years this advantage has disappeared as American banks have also grown substantially in size and today have many branches. Sometimes referred to as the Jazz Age or primarily in North America as the Roaring Twenties. // Events and trends Technology John T. Thompson invents Thompson submachine gun, also known as Tommy gun John Logie Baird invents the first working television system (1925) Charles Lindbergh becomes the first person to fly... State nickname: Empire State Other U.S. States Capital Albany Largest city New York Governor George Pataki (R) Official languages None (English is de facto) Area 141,205 km² (27th)  - Land 122,409 km²  - Water 18,795 km² (13. ... The Caribbean or the West Indies is a group of islands in the Caribbean Sea. ...

Despite these foreign ownership rules, Canadian banks have been far less strictly regulated than their American counterparts. Canadian banks are far freer to participate in the financial planning and insurance industries than their American counterparts. Canadian banks have not faced laws against usury, or interest guarantees on deposits. Profits for Canadian banks are generally higher. Usury (from the Latin usus meaning used) was defined originally as charging a fee for the use of money. ...

However, service charges are also lower in Canada, and Canada's banking system also provides better service by most measures. Canada has more branches and more ATMs per capita than the United States. Cheques take less time to clear, as do most other transactions. Canadian banks have been far more active in promoting debit cards and internet banking, and both services are used far more often by Canadians. Outdoor ATMs may be free-standing, like this kiosk, or built into the side of banks or other buildings An automatic teller machine or automated teller machine (ATM) is an electronic device that allows a banks customers to make cash withdrawals and check their account balances without the need... Typical cancelled personal cheque as used in the U.S. A cheque (British English) or check (American English), thought to have developed from Persian Ú†Ùƒ chek, is a negotiable instrument instructing a financial institution to pay a specific amount of a specific currency from a specific demand account held in the... This article needs to be cleaned up to conform to a higher standard of quality. ... Online banking (Internet banking) is a term used for performing transactions, payments etc. ...

Prices

In Canada prices have long tended to be higher. This is partly because of structural issues in Canada such as low population density and harsher weather, and partly due to Canada's tax system, which depends more heavily on sales taxes relative to income taxes than the U.S. This has contributed to problems such as cross-border shopping and a reduced standard of living. Since the early 1990s this has not been the case, as the Canadian dollar had fallen low enough that it more than made up for price differences. Today prices are somewhat lower in Canada, the Big Mac Index shows that in 2003 a Big Mac cost $2.65 in the States and only $2.41 in Canada (both figures in USD). // Events and trends The 1990s are generally classified as having moved slightly away from the more conservative 1980s, but keeping the same mind-set. ... The Canadian dollar, CAD or C$, is the unit of currency of Canada. ... McDonalds Big Mac The Big Mac index is an informal way of measuring whether one currency is at the theoretically correct exchange rate with another currency. ... McDonalds Big Mac The Big Mac is a type of hamburger sold since 1968 by the McDonalds chain of fast food restaurants. ... The United States dollar is the official currency of the United States. ...

Fuel prices have always been higher in Canada, even though Canada is a net exporter of energy. This is partly for the same reasons as above and partly because of environmental taxes levied specifically on fuel. Unlike many oil producers, particularly those in the developing world, Canada does not heavily subsidize fuel, so prices are based on the world market price. For the workstation, see SGI Fuel. ...

Productivity

By most measures Canadians workers are less productive, although some of this difference is caused by Americans tending to work longer hours. Canadian levels of mechanization are also not always as high.

For the last thirty years the productivity gap has been closing, in large part because of the elimination of the smaller market problem through free trade. From 1961 to 1973 labour productivity rose annually by 3.3 percent in Canada and 1.7 percent in the United States. From 1973 to 1995 it was 1.1% in Canada and 0.8% in the States.

Unemployment

Canada has a higher unemployment rate than the United States with the Canadian number being around 7 to 8% while the U.S. tends to be around 5%. During the 1980s when this gap first emerged it was a controversial issue. Canada's higher income taxes and more generous benefit programs were blamed. It has recently been noted that about half of the difference is caused by the two countries measuring the unemployment rate differently. Carig Riddell, a UBC economist, found that the unemployment gap had averaged about 2% over the last several years. His numbers show that 0.9% of the difference was caused by differing measurement systems. Other factors explaining the remaining difference are the large number of seasonal workers in trades such as fishing and logging who are unemployed for a portion of the year. Canada's more restrictive labour laws, increased role of unions, and greater unemployment benefits have also all been blamed for creating some of the difference. However, when unemployment insurance and welfare were sharply cut in many parts of Canada during the 1990s there was little gain relative to the Americans. // Events and trends The 1980s marked an abrupt shift towards more conservative lifestyles after the momentous cultural revolutions which took place in the 60s and 70s and the definition of the AIDS virus in 1981. ... UBC can refer to the University of British Columbia the Union Bank of California United Baptist Convention Used Beverage Containers (i. ... Fishing from a Pier Fishing is a term applied to any activity which aims to capture fish or shellfish for subsistence, scientific, commercial or recreational purposes. ... For another article about a different type of logging, see data logging. ... Unemployment benefits are sums of money given to the unemployed by the government or a compulsory para-governmental insurance system. ... Welfare - Wikipedia, the free encyclopedia /**/ @import /skins-1. ...

Balance of trade

While the United States has in recent years had a large trade deficit Canada has recently maintained a trade surplus. The Canadian surplus is almost entirely due to trade with the United States. Canada has trade deficits with the countries of Europe and Asia, just as the Americans do. In 2002 Canada exported about 100 billion dollars worth of goods more than they imported to the U.S. With the rest of the world it had a trade deficit of $83 billion creating an overall surplus of some $17 billion. Balance of trade figures are the sum of the money gained by a given economy by selling exports, minus the cost of buying imports. ... Balance of trade figures are the sum of the money gained by a given economy by selling exports, minus the cost of buying imports. ... 2002 is a common year starting on Tuesday of the Gregorian calendar. ...

Income

Canadian GDP per capita is lower than that in the United States and median income is lower in Canada. Wealth in the United States is more highly concentrated and the higher per capita GDP is almost entirely a difference among the wealthiest 1% of the two countries. In probability theory and statistics, the median is a number that separates the highest half of a sample, a population, or a probability distribution from the lowest half. ...

The GDP gap has also been shrinking. From 1961 to 1973, real GDP grew at an average annual rate of 5.5 percent in Canada and 4.0 percent in the United States. From 1973 to 1995 it was 2.6% in Canada and 2.3% in the States.

Standard of Living

Standard of living is perhaps the hardest measurement to make since a wide array of factors have to be taken into account. The United Nations Human Development Index has traditionally listed Canada higher than the United States, with only a few exceptions. Other independent groups, such as the Economist rank Canadian cities as better places to live than American ones. The Standard of living refers to the quality and quantity of goods and services available to people. ... The United Nations, or UN, is an international organization established in 1945 and now made up of 191 states. ... Front cover, February 21, 2004 The Economist is a weekly news and international affairs publication of The Economist Newspaper Limited in London. ...

Canada ranks higher than the U.S. in statistics such as life expectancy, infant mortality, and literacy. The United States has more major consumer goods per capita than Canada. For instance, while Canada had only 714 televisions per 1000 people in 1996, the United States had 805. Life expectancy is the most likely number of years remaining for a living being (or the average for a class of living beings) of a given age to live. ... For early system failures, see failure rate. ... Literacy is the ability to read and write. ... 1996 is a leap year starting on Monday of the Gregorian calendar, and was designated the International Year for the Eradication of Poverty. ...

The income gap in the United States is larger. There is sometimes a racial element to poverty in the United States. African-Americans and Hispanics, on average, have a lower standard of living than the rest of the population. Canada's French-Canadians also used to be a much poorer group, but since the Quiet Revolution in the 1960s this has mostly been remedied. Aboriginal peoples in Canada, a comparatively smaller percentage of the population, have a far lower standard of living than the majority. African Americans, also known as Afro-Americans, Black Americans, or blacks, are an ethnic group in the United States of America whose ancestors, usually in predominant part, were indigenous to West Africa. ... Hispanic, as used in the United States, is one of several terms used to categorize U.S. immigrants for whose background hail either from Spain, the Spanish-speaking countries of Latin America or the original settlers of the traditionally Spanish-held Southwestern United States. ... This is a disambiguation page — a navigational aid which lists other pages that might otherwise share the same title. ... Jean Lesage, Daniel Johnson Sr. ... The 1960s, or The Sixties, in its most obvious sense refers to the decade between 1960 and 1969, but the expression has taken on a wider meaning over the past twenty years. ... Aboriginal peoples in Canada is a collective name for the original inhabitants of the region of North America that is now Canada, and their descendants. ...

See also:

• Canadian and American politics compared
• Economy of Canada
• Economy of the United States