Canadian Economy: Top Industries

When 45% of Canada’s GDP is contributed by Exports, mostly Oil & Gas, to the United States (79% of Canada’s total exports), we start believing that Canada cannot survive without Oil & Gas. It is in part true. Look at the International trade deficit. As of Dec 2015, Canada recorded 584.90 CAD Million in trade deficits. The surplus trade started faltering after the financial meltdown of 2008 when cash was in short supply; American consumers stopped spending, and eventually from 2014, the oil prices started falling.

If you look at the industries that contribute towards the GDP, there are a few surprises. Unlike the ‘less government’ cry from the majority of US Citizens, Canadian government workers, specifically the ‘Health Care and Social Assistance’ & the ‘Public Administration’ department combined contribute the most towards Canada’s GDP.

The top three industries are:

1. Real Estate and Rental and Leasing
2. Manufacturing
3. Mining, Quarrying, and Oil and Gas Extraction

Unfortunately, real estate has a high correlation with the health of the Economy, which is driven by the employment opportunities. Oil & Gas extraction and related industries contribute the most towards Employment. Since the Financial Meltdown in 2008, the government has diversified the economic portfolio to a large number of industries. Manufacturing has slowly taken the lead.

It is true that Petroleum & Coal Products is the third largest industry within Manufacturing with the 2014 data showing $83.1 billion in Sales, but the two leading industries in Manufacturing are Transportation Equipment ($112.6 billion Sales), and Food Processing (107.1 Billion Sales).

Despite the US losing out on Auto manufacturers, Canada has steadily attracted world’s leading auto manufacturers. For instance, in 2005, Toyota invested $2 billion for their manufacturing plant in Woodstock, Ontario, which now contributes the largest share of workers in manufacturing (25%). The government attracted the investment by reducing the tax rate to 9.1% for new investments in Manufacturing – lowest among the G7 Countries where the US charges 31.7%.

Canada has a history of slow evolving trade agreements. For instance, in 2006, Canada had free trade agreement with just five countries (US, Mexico, Israel, Costa Rica and Chile), but as of 2015, the reach has widened to 44 countries, mostly the Euro Zone, South America and South Korea.

The CETA (Canada–European Union Comprehensive Economic and Trade Agreement), planned to diversify the dependence of Canada on the US Economy, is a landmark agreement between Canada and the European Union. CETA is expected to contribute $20 billion annually towards the Canadian economy. Unfortunately, Canada is still largely dependent on the US. The manufacturing sector exports $237.75 billion worth of goods to the United States, 20 times the amount from China, the 2nd largest importer of Canadian products.

Why learning about Top Industries is Important for MBA Applicants?

Switching Industries after an MBA is not easy, but understanding competition and the supply side of jobs would make you a smarter applicant. When you target a school, more than the brand, the networks that the career service team has built over the years will define your post-MBA success. There are a few exceptions, but for Canadian schools, not all of which rank in the top 10, but rank in the top 50, understanding local influence and the employment opportunities in each province would make your job search much more productive. There are no ready to take jobs. Your networking skills and knowledge of the Canadian job market would help you convert those casual networking events to concrete leads.

Let us look at the 10 Canadian provinces, and evaluate the best fit for you, post-MBA.

Download: Why Canada(A Complete Career Guide for MBA Applicants)