Investing in Canada: Potential of the Mining Sector

This paper analyzes the potential of investing in the mining sector of Canada and recommends it for Australian investors. It explores the business environment, ease of doing business, and the benefits of investing in Canada's abundant mineral resources.

Running head: ECONOMICS
Economics
Name of the student
Name of the university

2ECONOMICS
Table of Contents
Section 1: Executive summary...................................................................................................3
Section 2: Introduction...............................................................................................................3
Reasons to invest in the mining sector of Canada..................................................................3
Section 3: Analysis and discussion............................................................................................6
General business environment...............................................................................................6
Starting a business:.................................................................................................................6
Ease of doing business-..........................................................................................................7
Getting electricity-.................................................................................................................7
Registering property:..............................................................................................................8
Dealing with the construction permits:..................................................................................8
Protecting minority investors:................................................................................................8
Getting credit:.........................................................................................................................8
Enforcing contracts:...............................................................................................................9
Resolving insolvency:................................................................................................................9
Trading across borders:..........................................................................................................9
Getting electricity-...............................................................................................................10
Paying taxes:........................................................................................................................10
General conclusion:..............................................................................................................10
Economic growth and business cycle......................................................................................11
Unemployment.....................................................................................................................13
Average wage rate................................................................................................................14

3ECONOMICS
Human capital......................................................................................................................15
Inflation................................................................................................................................16
Real interest rate...................................................................................................................18
Government expenditures....................................................................................................19
Taxation policy of Canada...................................................................................................20
Exchange rate regime and exchange rate fluctuation...........................................................22
Two examples of monetary policies in your target country in recent years............................22
Effects of the Global Financial Crisis (GFC) on your target country......................................23
Section 4: Conclusion and recommendation............................................................................23
Recommendation..................................................................................................................25
Reference list............................................................................................................................26

4ECONOMICS
Investing in Canada
Section 1: Executive summary
This particular paper analyses the potential of investing in the mining sector of Canada. The
obtained results shows that the Australian should be investing in Canada since this country
has abundant of mineral resources. Therefore, investing in the mining sector would help the
Australians earn a huge amount of profit. The report have found that Canada is a very good
place to do business. Although Australia have some benefits over Canada, due to the end of
the commodity boom , the economy of Australia is facing a stagnant growth. Therefore, it is
highly recommended that the Australian investors should be investing in Canada.
Section 2: Introduction
The Canadian economy is a highly developed mixed economy with the 10th largest gross
domestic product by PPP in the world. The economy of the country is mostly dominated by
the service industry. The service sector is the largest which employs more than three quarters
of Canadians. Canada is a very good country for investing because of the strong geographic
and sectoral clusters. It also have one of the soundest banking system in the world. This
country is one of the world’s most open countries in terms of trade as well as investment in
case of mining. In the year 2015, Canada had been the world’s top destination for
exploration of the non ferrous minerals. Easy access to all the reliable suppliers and the
service contributes leads to the investment success for all the stages (Krupoves, Camus and
De Guire 2015). The top mineral products of Canada were gold, copper, potash, coal as well
as iron ore whose combines value had been more than $24 billion. Therefore, it can be said
that Australia should be investing in the mining sector in Canada since it is one of the
profitable sector for investing.

5ECONOMICS
Australia and Canada are known to grant each other preferential tariffs on a limited range of
products which are known to be under the Canadian Australia Trade Agreement.
This particular report is known to provide an insight that whether investing in the mining
sector of Australia will provide the company with significant returns that will be enough to
warrant the investment decisions.
Reasons to invest in the mining sector of Canada
Canada is known to be second largest country where the population is known to exceed more
than 30 million. The business presently benefits as a result of low rate of interest, availability
of credit along with the sound expanding economy. The banks in Canada also have a strong
balance sheet as result of regulation, conservative practice and strong capitalization in the
economy. Australia should be investing in Canada because of the attractive business
environment, strong growth record where Canada is known to lead all G7 countries in the
economic growth. Highly educated workforce, low tax rates, financial stability and incredible
market access. Canada is regarded as one of the best destinations in the world for the mineral
investment. The huge range of commodities along with stable investment climate makes
Canada the leading exporter of metals and minerals. The rich endowment of Canada led to
the development of major mining regions like Labrador Trough on the Quebec
Newfoundland, the nickel copper platinum group elements mines of Ontario, metallurgical
coal belt in Columbia are some of the examples which have abundant of mineral resources in
Canada. Canada has a n immense mineral potential ranging from aluminium to zinc. It is also
the world’s number one producer of potash and the leading producers of aluminium, nickel,
platinum, cobalt, diamond and uranium. Since the year 2002, Canada is known to rank 1st in

6ECONOMICS
the non ferrous mineral exploration budgets. In the year 2015, more than 40 companies from
13 countries have known to invested in the mining sector of Canada.
Canada is known to maintain an open economy which is based on the principles and
recognition of the effectiveness of the marketplace. This place can also meet the huge
demand for minerals in the world. This country is the producer of more than sixty different
types of minerals where it is known to produce metals with more than two hundred mines.
For this reason, it can be said that Canada is one of the leading sectors of mining in the world.
This particular country is rich in natural resources. In the year 2017, Canada have produced
more than $8 billion of the mine products which is known to include coal, copper, silver,
molybdenum and other mining products. British Columbia is mainly the centre of mineral
exploration and the world leader in mine health and safety practices. This country is also
known to have a robust venture capital market with a culture of innovation. The Canadian
cities like Toronto as well as Vancouver is known to provide regional bases in order to
support mining as well as allied activities through the financial and other service sectors.
The government of Canada is known to work for accelerating the pace of innovation in the
mining sector through large number of programs which will be encouraging the collaboration
with the private sector companies. For this reason, the foreign mining firms will be able to
take advantage of the Canada’s expertise through research and development programme.
Potica structure: Canada is one of the most politically stable countries in the world. The
budget deficit of Canada is moderate relative to any other jurisdiction in the world. The BoP
of Canada is also quite small enough. This country is known to enjoy a huge trade surplus in
its trade. The volatility in Canada is also comparatively small in nature. over the past few
years Canada also had the smallest downturn of any of the G7 counties.

7ECONOMICS
An economy to bank on : Canada is known to rank 13 out of the 144 countries in the world
economic forum’s global competitiveness index. The competitiveness of Canada is mainly
fuelled by the strong financial market development. Canada is also known to rank first as it
have the soundest banking system out of the 144 global economies.
Mining sector: Canada is known to be the world’s largest source of many minerals which
includes zinc, nickel uranium and lot more. There are than 60 companies in S&P/ TSX
matrials sector (Krupoves, Camus and De Guire 2015). Canada is also known to bee the
major gold producer in the word. For this reason, it can be said that investing in the mining
sector becomes a very resourceful way for investing in the emerging markets without
presence of any political risk since the Canadian listed companies are known to be subject to
the investment rules and regulations of Canada.
Least corrupted country: Canada is known to rank 9th in terms of least corrupted country in
the world. According to the 2018 corruption Index, it can be said that Canada ranks 9th in
terms of least corrupted nation out of the 175 countries. The index is reported by thee
Transparency International. The corruption index in Canada is known to be 8.38 till the year
2018.
sound banking system: the rating agencies ranks Canadas’ banking system as number one in
the world for the financial strength as well as for safety. The world economic forum is also
known to rank Canada’s banking system to be the soundest in the world. During the time of
the global financial service, none of the Canadian bank nor the insurance company had been
affected. The banks in Canada usually operates in oligopoly which leads to very high profit
margins and there is also an implicit promise of the government protection in case of any
drop off.

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Canada means business: Canada is known to rank 7th in terms of the best country to do
business in the world. This country is known to rank first in the world for personal freedom,
third in the world for red tape, sixth in terms of investor protection. Canada is known to rank
7th in the world of trade freedom and 9th in the world for tax burden and property rights. The
stable economy, high standards of living, high quality education and a successful business
culture promotes growth and innovation attracts foreign investors.
Section 3: Analysis and discussion
General business environment
Canada is known to be a highly mixed developed economy in the world where it is ranked to
be the 10th largest in terms of the gross domestic product. The manufacturing, mining and the
service sector mainly dominates the Canadian economy. It has been found out that Canada
maintains a liberal trade regime in the economy. There are no restrictions in case of foreign
exchange. There is however a need of the import license for only a limited number of goods.
Starting a business:
starting a business takes into account the number of procedures, cost, time and minimum
capital needed for a small to medium sized company too start up and also formally operate
in each of the economy’s largest business city. This particular indicator is known to measure
the procedures for legally starting and also formally operating a company. It helps in
registration in the economy’s largest business city. Canada is known to rank in terms of
starting a new business. The paid in minimum capital requirement is CAD 0 that takes place
in Toronto (Doingbusiness.org. 2019). Officially there are no cost and no bribes for
completing the procedure and no professional fees are taken until and unless the service
required by the law or are commonly practiced. The funds which are deposited in the bank or
with the third party before registration up to 3 months after the incorporation.

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Ease of doing business-
this particular index is known to be published by the world bank. In terms of ease of doing
business Canada is known to rank 22nd. The ease of doing business is the figure which
mainly includes the different parameters that is known to define the ease of doing business in
a country.
Getting electricity-
Canadian electricity sector plays an important role in both the economic as well as in the
political life of the country. The electricity price in Canada is 13.3 US cents per kWh.
Toronto Hydro is the name of the utility. The fossil fuels in Canada is known to provide more
than 20 percent of the electric supply. Canada is known to rank 121 in terms of getting
electricity which states that it does not rank very well in terms of getting electricity. It have
also been found out that only five of the provinces in Canada is known to use coal in order to
generate electricity.
Registering property:
the Toronto Land Registry office is known to look after the immovable property registration
in Canada. In terms of registering property Canada is known to rank 34. Registering a
property evaluated steps and the time taken in registering property and assuming a
standardized case for the entrepreneur who will be purchasing a land as well as a building
that has been already registered and is also free of title disputes. In order to do a business,

10ECONOMICS
registering a property is very essential. There are also presence of procedures of pre
registration like checking for liens along with paying for property transfer taxes.
Dealing with the construction permits:
the regulation of construction is known to matter a lot for the public safety. When the
procedures will be getting too much complicated, builders can proceed without any permit. In
most of the countries.
Protecting minority investors:
Canada is known to rank 11th in terms of protecting the minority investors
(Doingbusiness.org. 2019) The protection of minority investors is the score which is used for
measuring the strength of the protections of the minority shareholders against the mis usage
of the corporate asses for their personal gain. The Board of Directors is known to take
decisions in order to approve the transaction of both the buyer as well as the sellers.
Getting credit:
this particular criteria is known to explore any of the two sets of issues related to the
strength of the credit reporting system. The other issue is the effectiveness of collateral and
the laws which are very well related to bankruptcy in order to facilitate lending. Therefore,
for getting credit in order to do business, Canada is known to rank 12th. thee credit score is the
three digit number which is known to allow the lender to determine the credit risk for the
potential borrowers. Thee name of the two famous credit bureaus are Equifax and
TransUnion.
Enforcing contracts:
the enforcing contracts claim value of Canada is CAD 110,205 where the court’s name is
Ontario Superior Court of Justice. The time taken for enforcing contracts is more than 900
days. Canada is known to rank 96 in terms of enforcing contracts.

11ECONOMICS
Resolving insolvency:
this is the time, cost as well as the outcome recovery rate in case of a commercial insolvency
along with the strength of the legal framework for the insolvency. For determining the
present value of the amount that is known to be recovered by the creditors, doing business in
known to use the lending rates from the international monetary fund. Canada is known to
rank 13 in terms of resolving insolvency.
Trading across borders:
The trading across borders is known to take into account the time and cost needed for
exporting the products of comparative advantage and then import the auto parts. The doing
business is known to measure the cost and time associated with the three set of producers
which are the documentary compliance, domestic transport as well as border compliance.
This takes place within the overall process of exporting and importing the shipment of goods
(Doingbusiness.org. 2019). The documentary compliance is known to obtain, prepare and
submit the documents during the time of transportation , inspection and clearance it is known
to cover all the documents that is required by law and practice which also incudes electronic
submission of information. Here in this case of trading across borders Canada is known to
rank 50.
Getting electricity-
Canadian electricity sector plays an important role in both the economic as well as in the
political life of the country (Doingbusiness.org. 2019). The electricity price in Canada is 13.3
US cents per kWh. Toronto Hydro is the name of the utility. The fossil fuels in Canada is
known to provide more than 20 percent of the electric supply. Canada is known to rank 121
in terms of getting electricity which states that it does not rank very well in terms of getting
electricity. It have also been found out that only five of the provinces in Canada is known to
use coal in order to generate electricity.

12ECONOMICS
Paying taxes:
the topic of paying the taxes is known to record the taxes along with the mandatory
contributions which a medium sized company should be paying or withholding in a given
period of time. The administrative burden of paying the taxes and the contributions comply
with the post filing procedures. This particular indicator is known to measure the tax
payments for a manufacturing company in the year 2017. It also takes into account the total
number of taxes and the contribution paid or withheld. The three most important kind off
taxes are value added tax, sales tax and the goods and service tax. Canada is known to rank
19 in terms of paying taxes.
General conclusion:
from the above categories from doing business it can be said that Canada is a very suitable
place for doing business. It is known to rank third in terms of starting a new business which
implies that there will be no difficulty in investing in the mining sectors of Canada. There is
absence of any cost for starting a new business in Canada. However, in terms of getting
electricity Canada is known to rank 121, which means getting electricity is little difficult
here. In terms of trading across border Canada is known to rank 50 which states that the
difficulty in exporting and importing business will be little difficult in nature. in terms of
payment of tax Canada is known to rank 19 which is also quite good in nature. Canada ranks
11th in terms of protecting the minority businesses. Therefore the small to medium sized
companies will not be facing too much difficulty in terms of starting a new business.
Registering a new property is also not very difficult in Canada although it is known to rank
34.

13ECONOMICS
Economic growth and business cycle
2013 2014 2015 2016 2017
0
0.5
1
1.5
2
2.5
3
3.5
% of GDP growth
Canada
Australia
The economic growth of a country is usually measured by the gross domestic product. When
the gross domestic product of the country increases, it leads to the economic growth of the
country. The economic growth of the country is usually measured by the rise in the total
output of the country or rise in the real gross domestic product. GDP is also stated as one of
the primary indicators which is used for gauging the health of the country’s economy.
Presently, the gross domestic product is 1.65 lakh crores USD which have increased by more
than 3 percent from the previous year. When the growth of GDP declines, it means the
country is producing less amount of goods. producing less also indicates that the economy is
either shrinking or declining. The manufacturing firms and the service business are creating
less number of products which means it needs fewer works. This results to less amount of
income to the investors. For a healthy economy, the growth of the GDP should be 2 percent
or more. Here in this case, the growth of gross domestic product of Canada is more than
2percent which is a good sign for the investors. The growth of the gross domestic product is
known to influence the financial markets. Therefore, investors will be investing in healthier
economy in order to maximize profit. A healthy economy is the one which have the growth
rate of gross domestic product of more than 2 percent. Since the growth rate of Canada is

14ECONOMICS
more than 2 percent, it will be quite profitable for the Australian investors to invest in
Canada.
Year Canada
Australi
a
2013
2.47500
2
2.63948
2
2014
2.85573
9
2.55833
8
2015
1.00088
2
2.35113
6
2016
1.41410
3
2.82731
1
2017
3.04735
1
1.95757
5
From the above table it can be said that the percent of gross domestic product growth in
Australia had been comparatively less than that of Canada.. it can bee seen that the growth is
the gross domestic product in case of Australia had been revolving around two percent. And
then in the year 2017, the growth went slightly. The percent growth of GDP therefore is the
same. and every year it increases only by 2 percent.
Unemployment
2013 2014 2015 2016 2017
0
1
2
3
4
5
6
7
8
% of unemployment
Canada
Australia

15ECONOMICS
The unemployment level of Canada basically is around 5 to 7 percent. From the above graph
it can be said that unemployment level currently is decreasing. Less unemployment means
there is an economic growth and also presence of inflation in the country. For this reason it
can be said that investing in Canada will be profitable as the country will eb having good
economic growth. It can also be said that when the foreign direct investment in the country
increases, the economy performs much well. Presently, the unemployment level in Canada is
less than 5 percent. There is a relationship between the unemployment level and investment.
An increase in the desire to save lead to decrease in the rate of interest which also increases
the investment level. The Australian investors should be investing in Canada since the
interest rates are becoming low, unemployment rates are slowly increasing which helps inn
expanding the economy.
Year Canada
Australi
a
2013 6.914 5.663
2014 6.906 6.078
2015 6.999 6.056
2016 6.34 5.711
2017 5.92 5.594
The unemployment rate for both canada and Australia is quite similar in nature. Canada’s rate
have decreased a little from 6 percent. In case of Australia the rate of unemployment is
relatively lesser than that of Canada.

16ECONOMICS
Average wage rate
The above chart shows the average wage rate of Canada.
The average wage rate is little lower in Canada compared to that of Australia. The wage is
the monetary compensation that is being paid to the employees in exchange of the work done.
The wages in Canada known to have increased to 25 CAD/Hour in the month of February
2019.

17ECONOMICS
The average wage of Australia is comparatively much higher when compared to Canada. The
above data although provides the weekly data.
Human capital
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
59
60
61
62
63
64
65
66
67
68
% of school enrollment
The graph state that the percent of school enrolment in Canada have increased from 2015.
Presently it is quite high which states that the literacy rate is quite high in Canada. The rate of
literacy is probably one of the main indicators of the economic growth of a country.
Accumulation of human capital is one of the main factor behind the growth of a country.
Rise in the formation of human capital in the long run generally leads to high growth in the
economy. According to the researchers, the level of educational infrastructure is one of the
key factor of economic development. The quality of education also directly affects the
earnings of individuals. There is a strong relationship between human capital and economic
growth. Canada ranks high in world economic forum human capital report. The annul capital
index rates Canada ninth out of 130 countries and ranks second in the G20 countries. The
Canadian adults also ranks second for the post secondary education. As human capital affects
the economic growth through knowledge and skills of people, in this term Canada is well
ahead of many nations.

18ECONOMICS
Inflation
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
% of inflation
Canada
Australia
Canada’s rate rate of inflation is comparatively quite low and is within the targeted rate of
inflation. Inflation in Canada mostly revolved around 1 to 2 percent for the past ten years.
Therefore, it can be said that the inflation level is normal here. The rate of inflation can be
stated as one of the crucial factors which influences the inflow of investment. When the
inflation rate will be high, it will signify that there is economic stability in the country that is
also associated with the inappropriate government policies in the country. High rate of
inflation generally distorts the economic activities, leading to lesser inflow of capital. High
rate of inflation also negatively affects the mining industry. On the other hand, a low as well
as stable inflation is a sign of internal economic stability in the country. The reason behind
this is that it leads to the reduction in uncertainty and boosts the people’s confidence.
Therefore, it can be said that a stable inflation is very much desirable for attracting foreign
capital as the inflation rate in Canada is stable, investing in Canada will be highly profitable
in nature.
year Canada
Australi
a
2007
2.13838
4
2.32761
1

19ECONOMICS
2008
2.37027
1
4.35029
9
2009
0.29946
7
1.77111
7
2010
1.77687
2 2.91834
2011
2.91213
5 3.30385
2012
1.51567
8 1.76278
2013
0.93829
2
2.44988
9
2014
1.90663
6
2.48792
3
2015
1.12524
1
1.50836
7
2016 1.42876
1.27699
1
2017
1.59688
4
1.94864
7
the rate of inflation in Australia is very much similar to that of Canada. For both the countries
it can be noticed that they have similar rate of inflation. The inflation rate of Australia is also
between 1 to 2 percent. Therefore it can be said that both the countries have very much
similar inflation rate.
Real interest rate
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
-1
0
1
2
3
4
5
6
7
% of real interest rate
Canada Australia

20ECONOMICS
The real interest rate is that rate of interest which is known to b adjusted for removing the
inflation effects to reflect the rea cost of funds to the borrower. The graph shows that
presently the real interest rate is below 1 percent. The real interest rate tend to decrease from
2015. In the previous years also the interest rate had been fluctuating many times. The
investors generally tends to maximize returns on their investment. Higher rates of interest
increases the value of a given currency of country. On the other hand, lower rate of interest is
known to be unattractive to the foreign investment which also decreases the relative value of
currency. Presently the real interest rate of Canada is 2 percent, a drop from the previous
year rate (de Lange, Walsh and Sheeran 2018). The interest rates are one of the critical
determinants affecting foreign investment. When the rate of interest increases, the inflation
tend to be lower, economic growth tends to be slower, there can be rise in unemployment.
However, it can be said that higher interest rate attracts investment. Therefore, since
Canadian interest rate is lower, it works against investment.
year Canada
Australi
a
2007 2.69592
3.02960
8
2008
0.69630
4
4.19348
1
2009
4.80020
9
0.96888
2
2010
-
0.26236
6.04501
2
2011
-
0.23445
1.39170
7
2012
1.75728
7
5.00670
8
2013
1.39276
7
6.34708
5
2014
1.00956
6
4.44603
4
2015
4.03119
8
6.34925
4
2016 2.19684
5.90627
4
2017
0.20011
1 1.48122

21ECONOMICS
The value of the real interest rate shows presently the rate of interest have declined in case of
Australia and also in case of Canada. Though during 2009 and 2010, the interest rate had
been negative in Canada. In case of Australia, the rate of interest is slightly better than
Canada.
Government expenditures
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
0
5
10
15
20
25
General government final consumption
expenditure (% of GDP)
The government final consumption expenditure of Canada is around 21 percent of the gross
domestic product in 2017. The expenditure of government is one of the most important factor
which affects the gross domestic product of the country. When the government expenditure
rises, the gross domestic product of the country will also rise which will also lead to growth
in the economy (Data.worldbank.org. 2019). Higher GDP indicates rise in the economic
growth in the country. When the economy is performing well, it will be profitable for the
investors to invest in Canada. The Canadian government is known to invest in the clean
technology in case of mining. The government have invested a lot through the scientific
research and experimental development tax incentive program. The government of Canada
known to have contributed positively t the policy developments and also in investments in

22ECONOMICS
order to support the mining sector of Canada. Therefore, it can be said that the government
should be spending more in order to promote the mining sector of Canada so that it will be
attracting foreign investors like Australia.
year Canada
Australi
a
2007
19.3010
4
3.19137
2
2008
19.7685
6
3.02195
5
2009
22.0202
1
4.18765
2
2010
21.5260
4
1.73942
7
2011
21.1953
4 3.419
2012
21.1086
4
3.63252
5
2013 20.7558
0.33759
2
2014
20.3145
9 1.51808
2015
20.9263
4 2.36136
2016 21.0632
4.21755
6
2017
20.7169
7
4.06756
6
The Canadian government spends a lot more compared to the Australian government. The
chart above shows that the government of Canada have spent more than 20 percent in the
expenditures compared to the Australian government which have spent only 4 percent.

23ECONOMICS
Taxation policy of Canada
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
0
5
10
15
20
25
30
Tax revenue (% of GDP)
Canada
Australia
The tax revenue of the government had been around 11 percent. However recently, the tax
revenue of the government have increased to 12 percent (Data.worldbank.org. 2019). Tax
revenue of the government can be increased when the rate of taxation will be increasing.
However it should be kept in mind, that high taxes will be discouraging work, savings as well
as investments. When the tax rate in the economy will be too high, the investors will not be
investing in Canada since, and it will discourage them. The government revenue is the
amount of money received by the government and is also considered to be an important tool
in the fiscal policy of the government (Hoogeveen 2015). The government can also increase
its revenue by seigniorage which is the method by which the value of the currency is known
to be deflated. The money which the government collects for the services are usually pad by
the people. Therefore rise in the tax revenue means increase in taxation. And increase in tax
negatively affects investment. When the rate of tax will increase, it will discourage the
investors to invest in the mining sectors in Canada.
year Canada
Australi
a
2007
13.3694
1 24.1423

24ECONOMICS
2008
12.4210
3
24.2961
6
2009
12.3355
4
22.0932
7
2010
11.7604
4
20.5654
2
2011
11.8315
4
20.3692
6
2012
11.6925
6
21.2362
4
2013 11.6524
22.0596
5
2014
11.8363
7
22.0276
5
2015 12.4186
22.0428
1
2016
12.4550
4
22.2892
9
2017
12.5212
4
22.2131
8
The tax revenue earned by the Australian government is constant at 22 percent. While it is 11
to 112 percent for Canada. For this reason, it can be said that the Canadian government
probably charges less tax compared to the Australian government. Therefore, investing in
Canada will be profitable as they are known to charge less tax compared to Australia.

25ECONOMICS
Exchange rate regime and exchange rate fluctuation
The exchange rate of both the countries is quite similar for both the countries. Currently one
Australian dollar can purchase 0.93 Canadian dollar which is quite similar. The currency of
Canada is stated as the Canadian dollar and the currency of Australia is stated as the
Australian dollar. The Canadian dollar is known as the fifth most held reserve currency in the
world (Hoogeveen 2015) The Canadian dollar is also very popular in Central bank. From the
above graph it has been found out that the last ten years one Australian dollar could purchase
a Canadian dollar worth from $0.9 to $1. For this reason it can be said for both the countries
the exchange rate is quite similar.
Two examples of monetary policies in your target country in recent years
The monetary policy of Canada is known to comprise of two key components which is
known to work together. One is the inflation control target and the other is the flexible
exchange rate. The two of the targeted monetary policies help the policies to be readily

26ECONOMICS
understandable and it also helps the bank for demonstrating its accountability to the
Canadians. One of the main objectives of the monetary policies is to preserve the value of
money by keeping the rate of inflation low (Bansah, Sakyi-Addo. and Dumakor-Dupe 2016).
Therefore, it can be said that the monetary policy helps us for preserving the value of money
by keeping the inflation level low and stable along with predictable in nature. the inflation
control target aims in keeping the rate of inflation within its limit in the economy to 2
percent. Another measure of the monetary policy is the target for overnight rate which states
that the policy for interest rate which is known to control the rate of interest in Canada.
Effects of the Global Financial Crisis (GFC) on your target country
The global financial crisis took place between 2007 and 2008. It was one of the worst crises
and have severely damaged the financial system of many countries. However, Canada luckily
did not suffer much during the financial crisis that took place in the year 2008 (Hoogeveen
2015). Thee economic growth of Canada had been quite concrete and better in Canada
compared to most of the countries. Canada is also known to be the only country in the G 7
countries to have escaped from the financial crisis. The reason is because of the stability of
banks. None of the banks in canada had to be acquired, bankrupted, nationalized during the
period of global financial crisis. Because of the strong fiscal policy as well as the resilient
fiscal system, Canada have not been affected much due to the financial crisis.
Section 4: Conclusion and recommendation
Throughout the paper, after discussing and analysing the macroeconomic factors of canada
we can come to the conclusion that,
The financial system of candida is very stable in nature compared to many countries with
zero corruption level in the entire system. The stable and sound banking policies attracts
investors and makes Canada one of the best countries to invest in.

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The mining boom in Australia have faded which took place during the year 2011. As a result
of that the Australian investors can now invest in the mining sector of Canada which is
known to be one of the best industries to invest in. Canada had been the world’s top
destination for exploration of the non-ferrous minerals. The government of Canada is known
to work for accelerating the pace of innovation in the mining sector through large number of
programs which will be encouraging the collaboration with the private sector companies. For
this reason, the foreign mining firms will be able to take advantage of the Canada’s expertise
through research and development programme. For this reason, it can be said that investing in
the mining sector becomes a very resourceful way for investing in the emerging markets
without presence of any political risk since the Canadian listed companies are known to be
subject to the investment rules and regulations of Canada.
The taxation policy is also quite favourable towards the investors as Canadian government do
not impose too much tax on them. Canada is known to be a highly mixed developed economy
in the world where it is ranked to be the 10th largest in terms of the gross domestic product.
The manufacturing, mining and the service sector mainly dominates the Canadian economy.
It have been found out that Canada maintains a liberal trade regime in the economy. There is
no restrictions in case of foreign exchange. There is however a need of the import license for
only a limited number of goods. in case of the ease of doing business Canada also known to
rank 22nd which is also quite good in nature. however, in terms of getting electricity Canada
ranks a lower which might a problem for the investors.
Canada is known to rank 7th in terms of the best country to do business in the world. This
country is known to rank first in the world for personal freedom, third in the world for red
tape, sixth in terms of investor protection. Canada is known to rank 7th in the world of trade
freedom and 9th in the world for tax burden and property rights

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The percent growth of gross domestic product of Canada is also higher compared to Australia
that is 3 percent. The growth in the gross domestic product means that the economy is
growing. As the economy is expanding, it will be very profitable to invest in Canada.
Recommendation
The mining boom in Australia have come to an end, for this reason the economy of Australia
has been experiencing steady growth in the present years. On the other hand, the mining
industry in Canada is flourishing and is considered to be one of the best in the world.
Therefore, it is advised that the Australian investors should be investing in the Canadian
mining sector.

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