Lytton Advisory is travelling in Canada and the United States during February. It presents an opportunity to compare and contrast two dynamic economic systems, as well as look at the underlying structure of these economies and how some of the cities operate (or don’t).
The economy of Canada is closely tied to that of the United States, as the two countries have a highly integrated trading relationship. However, there are some key differences between the two economies.
In terms of size, the United States has a larger economy than Canada. The GDP of the United States at around US$24 trillion is around 10 times larger than that of Canada.
In terms of composition, the economies of the two countries are similar, with both relying heavily on services and manufacturing. However, the United States has a larger agricultural sector, while Canada has a larger natural resources sector, particularly in oil and gas.
Both countries are heavily oriented towards external trade, with the United States and Canada being each other’s largest trading partners. However, the United States has a more diversified trade portfolio, with significant trade relationships with countries all over the world, while Canada’s trade is more heavily concentrated with the United States.
In terms of investment, the United States is generally considered to be a more attractive destination for foreign investment than Canada. The United States has a larger and more developed economy, as well as a more business-friendly environment. However, Canada is also a popular destination for foreign investment, particularly in the natural resources sector.
In terms of ease of doing business, the United States generally ranks higher than Canada. The World Bank’s Ease of Doing Business Index, the United States is ranked 7th while Canada is ranked 18th. However, there are some specific areas in which Canada is considered to be more business-friendly, such as labor laws and regulations.
Such a broad brush consideration of two large economies masks significant regional variations in each economy. It does identify some major themes however.
As a starting point, are these kinds of comparisons relevant, valid or useful? Let us know in the comments below.
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