The Economy of Canada: An Explainer

Real estate, manufacturing, and mining are key drivers of Canada’s economy

Reviewed by Somer Anderson
Fact checked by Kirsten Rohrs Schmitt

Canada’s economy is highly developed and one of the largest in the world. In 2023, the country’s annual gross domestic product (GDP) was $2.14 trillion in current USD, according to the latest available World Bank data, and it projects that by the end of 2024, GDP will reach $2.21 trillion. That makes Canada the world’s tenth-largest economy.

Canada’s economy is highly dependent on international trade with exports and imports of goods and services each comprising about one-third of GDP. The country’s three largest trading partners are the U.S., China, and the U.K.

Its three largest industries, measured by their contributions to GDP, are real estate, rental, and leasing; manufacturing; and mining, quarrying, and oil and gas extraction.

Canada is home to the e-commerce company Shopify Inc., major banks such as the Royal Bank of Canada, and energy transportation and distribution company Enbridge Inc.

Some of the statistics below may vary between sources because each source uses its own methodology for defining and calculating statistics.

Key Takeaways

• Canada has the tenth-largest economy in the world as of 2024, with a GDP of $2.14 trillion in USD in 2023.
• International trade, including both exports and imports, is a large component of Canada’s economy, each making up about one-third of GDP.
• Canada’s largest trading partners are the U.S., China, and the U.K.
• The three largest industries in Canada are real estate, mining, and manufacturing.

The Canadian Economy by the Numbers

• Canadian 2023 GDP: $2.14 trillion (World Ranking: #9).
• Canadian 2023 GDP per Capita: $53,371.7 (World Ranking: #22).
• Canadian 2024 GDP Growth: 1.3%.
• Canadian 2024 Consumer Price Index (CPI) Inflation: 2.4%.
• Canada’s 2023 Merchandise Balance of Trade: a deficit of $1.9 billion because imports were greater than exports.
• Canada’s Largest Export Destination in 2023: the U.S. (77% of goods exported).
• Canada’s Largest Import Origin as of July 2023: the U.S. (49% of goods imported).
• Canada’s Largest Goods Export by % of the total as of 2023: energy (29%).
• Canada’s Largest Goods Import by % of the total as of 2023: consumer goods (19%).

Canada’s Top Industries: Real Estate, Manufacturing, and Mining

Real Estate, Rental, and Leasing

Canada’s real estate, rental, and leasing industry is comprised of establishments engaged in the following types of activities: real estate management; selling, renting, or buying real estate for others; appraising real estate; rental and leasing of tangible assets such as automotive equipment; and leasing of nonfinancial intangible assets such as copyrighted works.

GDP for the industry, which employed about 290,850 people, rose 1.45% in 2023, according to the Government of Canada.

Some of the biggest companies in the industry are real estate investment trusts (REITs), including Canadian Apartment Properties REIT, RioCan REIT, and Allied Properties REIT.

Manufacturing

Canada’s manufacturing industry is engaged in the physical or chemical transformation of materials or substances into new products. These products may either be finished goods for consumption or semi-finished goods to be used in manufacturing processes.

Canada’s industries manufacture food, chemicals, petroleum, fabricated metal products, machinery, transportation equipment, and other products. GDP for the industry, which employed approximately 1.6 million people in 2023, decreased by 0.59% in 2023, according to the Government of Canada.

Some major Canadian manufacturers include ATS Automation Tooling Systems, a custom engineer and manufacturer of industrial automated manufacturing systems; Ballard Power Systems Inc., a manufacturer of hydrogen fuel cells; and NFI Group Inc., a manufacturer of heavy-duty transit buses.

Mining, Quarrying, and Oil and Gas Extraction

Canada’s mining, quarrying, and oil and gas extraction industry is primarily engaged in the extraction of naturally occurring minerals. The industry is dominated by oil and gas extraction, but other types of mining activity include mining coal and a range of metals, including gold, silver, copper, nickel, and more. Stone, sand, gravel, clay, and ceramic mining and quarrying are also part of the industry, as well as mining for potash.

GDP for the industry, which employs approximately 213,014 people, increased by 0.16% in 2023, according to the Government of Canada.

Some of Canada’s biggest mining companies include Nutrien Ltd., a producer and distributor of potash, nitrogen, and phosphate products; Barrick Gold Corp., a gold mining company; and Teck Resources Ltd., a natural resource company that mines for zinc, copper, molybdenum, gold, and metallurgical coal.

Below is a closer look at Canada’s 10 biggest industries by contribution to the economy. Together, they are an important reflection of Canada’s economy because they contribute about three-quarters of the nation’s GDP.

^{Source: Statistics Canada (industry GDP and employment data); industry GDP contributions based on seasonally adjusted chained 2012 Canadian dollars.}

Canada’s Top Trading Partners

In 2023, Canada’s trade balance for goods and services was CAD$1.9 billion deficit. Inventories, gross fixed capital formation, and exports each comprise roughly a third, respectively, of Canada’s GDP, according to the Government of Canada.

The country’s top three trading partners in 2023, by total volume of exports and imports of goods and services, were the U.S., China, and the U.K.

#1 Trading Partner: The U.S.

In 2023, the value of imports with the United States was $277.04 billion. The value of exports was $439.6 billion. Canada’s biggest exports to the United States in 2023 were mineral fuels, oils, distillation products; vehicles other than railway, machinery, nuclear reactors, and boilers. Canada’s biggest imports from the U.S. were vehicles other than railway; machinery, nuclear reactors, boilers, mineral fuels, oils, and distillation products

6.5%

Canada’s unemployment rate as of September 2024.

Canada’s trade relationship with the U.S., as well as Mexico, is governed by the United States-Mexico-Canada Agreement (USMCA), which came into force on July 1, 2020. The agreement includes key provisions in areas such as dairy and agriculture, automobiles, intellectual property, and labor. USMCA replaced the North American Free Trade Agreement (NAFTA), the trade agreement that had governed trade relations between the three countries since 1994.

# 2 Trading Partner: China

In 2023, Canada ran a trade deficit with China. Total imports from China amounted to $66.08 billion while total exports amounted to $22.6 billion. Canada’s biggest imports from China in 2023 were electrical and electronic equipment; machinery, nuclear reactors, boilers, furniture, lighting signs, and prefabricated buildings. Canada’s biggest exports to China were ores slag and ash; mineral fuels, oils, and distillation products, and oil seeds, oleagic fruits, grain, seeds, and fruits.

#3 Trading Partner: The U.K.

In 2023, Canada had a surplus in trade with the U.K. Total exports amounted to $10.49 billion while total imports amounted to $6.95 billion. Canada’s top exports to the U.K. in 2023 were pearls, precious stones, metals, and coins; mineral fuels, oils, and distillation products, and inorganic chemicals, precious metal compounds, and isotopes. Its top imports from the U.K. were machinery, nuclear reactors, and boilers; vehicles other than railway, mineral fuels, oils, and distillation products.

The Canada-United Kingdom Trade Continuity Agreement (Canada-UK TCA) came into effect on April 1, 2021. Following Brexit, the U.K.’s exit from the European Union (EU), the Canada-UK TCA preserves the main benefits of Canada’s trade agreements with the EU as outlined under the Canada-European Union Comprehensive Economic and Trade Agreement (CETA).

What Is Canada’s Rank in Economy Size?

As of 2024, Canada ranked tenth in terms of economic size. Countries with an economy larger than Canada were the U.S., China, Japan, Germany, the U.K., India, France, and Russia.

Is Canada Richer Than the U.S.?

Canada is not richer than the U.S. While Canada does have one of the largest economies in the world, its economy is much smaller than that of the U.S., which has the largest economy in the world as of 2024. The U.S. had a GDP of $27.36 trillion while Canada had a GDP of $2.14 trillion.

Why Is Canada Wealthy?

Canada is a wealthy nation because it has a strong and diversified economy. A large part of its economy depends on the mining of natural resources, such as gold, zinc, copper, and nickel, which are used extensively around the world. Canada is also a large player in the oil business with many large oil companies. The country also has a large financial sector with many banks and other financial institutions, as well as a large real estate industry.

The Bottom Line

Canada is a highly developed nation with one of the largest economies in the world, impacting much of global trade. Its largest industries are real estate, mining, and manufacturing, and it is home to some of the largest mining companies in the world. A large portion of its GDP comes from international trade, with its largest trading partners being the U.S., China, and the U.K.