Canada’s well-regulated economy is highly integrated with that of the United States, which absorbs 79% of exports and sources 65% of imports. Canada is the biggest foreign supplier of U.S. energy, including oil, gas, uranium and electricity. Integration has intensified through various regional trade agreements, culminating in the 1994 North American Free Trade Agreement (NAFTA), which includes Mexico.
Widespread public support for continuing close ties with the U.S. economy is occasionally dampened by economic nationalism, and Canada’s otherwise good levels of openness are reduced by state and federal restrictions on foreign ownership. For example, there are some remaining tariffs in agricultural products, usually concentrated in politically-sensitive areas, notably Ontario and Quebec.
These strong Economic Competitiveness scores are slightly compromised by exceptionally low business ownership rates, indicating a lack of entrepreneurial vitality. Relatively few Canadians take the risk of going into business themselves, which may have a dampening effect on innovation.
Nevertheless, capital investment is substantial, and excellent educational standards have facilitated the diversification of the economy beyond its traditional strengths in commodities and agricultural exports. Canada has the highest rate of adults with post-secondary education in the G8, according to Statistics Canada. The government is trying to improve productivity through skills training, particularly in technology, and the innovation scores testify to good (but not outstanding) performance in research, patents and high-tech exports.
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Most Canadians enjoy an excellent standard of living and high incomes. Most of Canada’s indigenous population, which constitutes 3.8% of the total population, live in approximately 900 small communities. According to Statistics Canada, social indicators are significantly depressed in these communities: employment, for instance, is only 60% of the national average.
Canada’s healthcare system, which is based on public provision and private top-ups, provides excellent standards of healthcare at a far cheaper cost (9.5% of GDP) than that of the United States (16%), with health-adjusted life expectancy at 72 years.
With an average population density of only 3.5 per square kilometre, Canadians benefit from a splendid natural inheritance. However, nearly half of Canadians register dissatisfaction with environmental protection, according to the Gallup World Poll. Nonetheless, in general, government effectiveness and democracy score highly.
In common with many of the countries at the top end of the table, Canada suffers from a cold climate. However, at such high levels of income the impact on Comparative Liveability is minimal, as most can afford high-quality housing. Similarly, high levels of divorce and low levels of religious faith seem to characterise many of the top 15 countries for Comparative Liveability, but Canada’s overall scores for family and religious life remain high, particularly the extent of charitable giving.
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