Canada has an advanced and diversified mixed economy. The nation relies upon its abundant natural resources and well-developed international trade networks. PDF version As of 2026, it is the eleventh-largest in the world in nominal terms. Its GDP per capita in purchasing power parity (PPP) terms ranks third among G7 countries. Among OECD members, Canada has a highly efficient and strong social security system; social expenditure stood at roughly 23.1% of GDP. The country's average household disposable income per capita is "well above" the OECD average. The Government of Canada formulates economic policy while the Bank of Canada functions as its central bank and implements monetary policy.

The Canadian economy ranks low in corruption and income disparity while ranking highly on economic freedom and stability. Canada ranks among the lowest of the most developed countries for housing affordability. It maintains a highly developed banking sector with the Toronto Stock Exchange ranked the tenth-largest stock exchange in the world by market capitalization. Its cooperative banking sector is pronounced with the world's highest per-capita membership in credit unions. Among G20 members, Canada has the second-largest foreign direct investment to GDP ratio and the lowest net debt-to-GDP ratio in the G7.

Contemporary era overview

Since the early 20th century, the growth of Canada's manufacturing, mining, and service sectors has transformed the nation from a largely rural economy to an urbanized, industrial one. The Canadian economy is dominated by the service industry, which employs about three-quarters of the country's workforce. Among developed countries, Canada has an unusually important primary sector, of which the forestry and petroleum industries are the most prominent components. Many towns in northern Canada, where agriculture is difficult, are sustained by nearby mines or sources of timber. Canada spends around 1.70% of GDP on advanced research and development across various sectors of the economy.

Canada's economic integration with the United States has increased significantly since World War II. The Automotive Products Trade Agreement of 1965 opened Canada's borders to trade in the automobile manufacturing industry. In the 1970s, concerns over energy self-sufficiency and foreign ownership in the manufacturing sectors prompted the federal government to enact the National Energy Program (NEP) and the Foreign Investment Review Agency (FIRA). The government abolished the NEP in the 1980s and changed the name of FIRA to Invest in Canada to encourage foreign investment. The Canada – United States Free Trade Agreement (FTA) of 1988 eliminated tariffs between the two countries, while the North American Free Trade Agreement (NAFTA) expanded the free-trade zone to include Mexico in 1994 (later replaced by the Canada–United States–Mexico Agreement). As of 2023, Canada is a signatory to 15 free trade agreements with 51 countries.

Canada is one of the few developed nations that are net exporters of energy. Atlantic Canada possesses vast offshore deposits of natural gas, and Alberta hosts the fourth-largest oil reserves in the world. The vast Athabasca oil sands and other oil reserves give Canada 13% of global oil reserves, constituting the world's third or fourth-largest. Canada is additionally one of the world's largest suppliers of agricultural products; the Canadian Prairies are one of the most important global producers of wheat, canola, and other grains. The country is a leading exporter of zinc, uranium, gold, nickel, platinoids, aluminum, steel, iron ore, coking coal, lead, copper, molybdenum, cobalt, and cadmium. Canada has a sizeable heavy manufacturing sector centred in southern Ontario and Quebec, with automobiles and aeronautics representing particularly important industries. The country's fishing and tourism industries are also key contributors to the economy.

Monetary policy The mandate of the central bank—the Bank of Canada—is to conduct monetary policy that manages inflation to ensure the Canadian dollar's long-term purchasing power.

Under the inflation-targeting monetary policy that has been the cornerstone of Canada's monetary and fiscal policy since the early 1990s, the Bank of Canada sets an inflation target. The inflation target was set at 2%, which is the midpoint of an inflation range of 1 to 3%. They established a set of inflation-reduction targets to keep inflation "low, stable and predictable" and to foster Canada's sustained economic growth, employment gains and improved standard of living.

Following the Great Recession, the narrow focus of inflation-targeting as a means of providing stable growth in the Canadian economy was revised. By 2011, the then-Bank of Canada Governor Mark Carney argued that monetary policy would allow for a more flexible inflation-targeting in specific situations, specifically those favorable to employment or economic gains.

The Bank of Canada reassessed their mandate 15 years later in 2026 in response to the COVID-19 pandemic and a trade war with the United States. Their framework was adjusted to prioritize reducing inflation, rising housing costs, and protection against supply shocks.

Key industries

In 2024, the Canadian economy had the following relative weighting by the industry as a percentage value of GDP:Gross domestic product (GDP) at basic prices, by industry, annual average (x 1,000,000), Statistics Canada, Table 36-10-0434-03, 2025.

Industry Share of GDP Real estate and rental and leasing 13.16% Manufacturing 8.96% Health care and social assistance 8.03% Finance and insurance 7.42% Professional, scientific and technical services 7.33% Construction 7.23% Public administration 7.21% Educational services 5.44% Wholesale trade 5.42% Retail trade 5.26% Mining, quarrying, and oil and gas extraction 5.02% Transportation and warehousing 4.44% Information and cultural industries 3.47% Administrative and support, waste management, and remediation services 2.66% Accommodation and food services 2.22% Utilities 2.04% Other services (except public administration) 1.95% Agriculture, forestry, fishing, and hunting 1.89% Arts, entertainment and recreation 0.82% Management of companies and enterprises 0.04%

Real estate, rental, and leasing

Canada's real estate market is the backbone of the economy, comprising over 13% of the GDP by sector in 2024. In 2024, housing investment accounted for 25% of national wealth, up from 21% in 2021. It is difficult to discern the actual contribution of other sectors (such as construction, Investment and financial services, manufacturing, and forestry) to real estate, rental and leasing, as these industries are intrinsically linked in a complex economy. The Bank of Canada has increased its mortgage bond holdings to target 50% of the fixed-rate primary issuances.

Construction

Defence

Canada's defence sector is a high-tech, export-driven industry, comprising nearly 600 firms that contribute over $9.6 billion in GDP. Centered heavily on aerospace, simulation, advanced manufacturing and cyber technology, the industry exports close to $8 billion annually.

Service sector

The service sector in Canada is vast and multifaceted, employing about three quarters of Canadians and accounting for 70% of GDP. The largest employer is the retail sector, employing almost 12% of Canadians.Wallace, Iain, A Geography of the Canadian Economy. Don Mills: Oxford University Press, 2002. The retail industry is concentrated mainly in a small number of chain stores clustered together in shopping malls. In recent years, there has been an increase in the number of big-box stores, such as Walmart (of the United States), Real Canadian Superstore, and Best Buy (of the United States). This has led to fewer workers in this sector and the migration of retail jobs to the suburbs.

The second-largest portion of the service sector is the business service, and it employs only a slightly smaller percentage of the population. This includes financial services, real estate, and communications industries. This portion of the economy has been rapidly growing in recent years. It is largely concentrated in the major urban centres, especially Toronto, Montreal and Vancouver.

The education and health sectors are two of Canada's largest, but both are primarily under the influence of the government. The health care industry has been quickly growing and is the third-largest in Canada.

Canada has an important high tech industry, and a burgeoning film, television, and entertainment industry creating content for local and international consumption (see Media in Canada). Tourism attracts millions of visitors and supports approximately 10% of the national labor force. In recent years, statistics show that Canada has received over 20 million international tourists annually. The summer months are especially popular for travelers both domestically and internationally. Tourism and supporting industries contributed over $100 billion to the Canadian national economy in 2024. The sector supports nearly 1.8 million Canadians working in tourism-related fields.

Banking and finance

Education

Healthcare

Retail and hospitality

Telecommunications

Tourism

Manufacturing

The general pattern of development for wealthy nations was a transition from a raw material production-based economy to a manufacturing-based economy and then to a service-based economy. At its World War II peak in 1944, Canada's manufacturing sector accounted for 29% of GDP, declining to 10.37% in 2017. Canada has not suffered as greatly as most other rich, industrialized nations from the pains of the relative decline in the importance of manufacturing since the 1960s. A 2009 study by Statistics Canada also found that, while manufacturing declined as a relative percentage of GDP from 24.3% in the 1960s to 15.6% in 2005, manufacturing volumes between 1961 and 2005 kept pace with the overall growth in the volume index of GDP. Manufacturing in Canada declined significantly during the Great Recession. As of 2017, manufacturing accounts for 10% of Canada's GDP, a relative decline of more than 5% of GDP since 2005.

Central Canada is home to branch plants to all the major American and Japanese automobile makers and many parts factories owned by Canadian firms such as Magna International and Linamar Corporation.

Automotive

Pharmaceutical

Pulp and paper

Steel

Canada was the world's nineteenth-largest steel exporter in 2018. In year-to-date 2019 (through March), further referred to as YTD 2019, Canada exported 1.39 million metric tons of steel, a 22 percent decrease from 1.79 million metric tons in YTD 2018. Based on available data, Canada's exports represented about 1.5 percent of all steel exported globally in 2017. By volume, Canada's 2018 steel exports represented just over one-tenth the volume of the world's largest exporter, China. In value terms, steel represented 1.4 percent of the total goods Canada exported in 2018. The growth in exports in the decade since 2009 has been 29%. The largest producers in 2018 were ArcelorMittal, Essar Steel Algoma, and the first of those alone accounted for roughly half of Canadian steel production through its two subsidiaries. The top two markets for Canada's exports were its NAFTA partners, and by themselves accounted for 92 percent of exports by volume. Canada sent 83 percent of its steel exports to the United States in YTD 2019. The gap between domestic demand and domestic production increased to −2.4 million metric tons, up from −0.2 million metric tons in YTD 2018. In YTD 2019, exports as a share of production decreased to 41.6 percent from 53 percent in YTD 2018.

In 2017, heavy industry accounted for 10.2% of Canada's greenhouse gas emissions.

Mining

Canada is one of the largest producers of metals (as of 2019): MetalWorld rankPlatinum4Gold5Nickel5Copper10Iron (ore)8Titanium4Potash1Niobium2Molybdenum7Cobalt7Lithium8Zinc8