Canada's Macroeconomic Environment: A Report for Australian Investors

This report assesses the macroeconomic conditions of Canada for potential investment by Australian companies, focusing on the mining sector. It examines Canada's general business environment, including ease of doing business factors like starting a business, construction permits, electricity access, property registration, credit availability, investor protection, taxation, trade, contract enforcement, and insolvency resolution. The report also analyzes human capital trends, monetary policy, and the impact of the global financial crisis. Through data-driven analysis and evaluation of key macroeconomic variables, the report concludes that Canada presents a favorable environment for long-term investment, particularly in the mining sector, due to its stable economy, liberal trade policies, and robust fiscal system. However, the report suggests improvements in enforcing contracts and trading across borders. Desklib provides access to similar reports and solved assignments for students.

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

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Investing in Canada
Executive summary
The paper states that the Australian investors should be investing in the mining sector of Canada
as it will be quite profitable for them. The first part of the paper introduces about the mining
sector Canada which is world famous. The second part of the paper states the analysis and
evaluates how much profitable will investing in Canada be. Lastly, the paper concludes by
stating that the mining sector of Canada will be the perfect choice for investing.
Introduction
Canada is known as one of the world’s most open countries in terms of trade and investing in
case of mining. This country is known to be one of the world’s top destination for nonferrous
mineral exploration investment. Australia should be investing in the mining sector of Canada
since it one of the most successful sector in the country (Higham, Reis, & Cohen, 2016). Mining
is known as Canada’s one of the primary industries which involves extraction and refining of
valuable rocks and minerals. Canada also ranks high in terms of ease of doing business since it
has a good fiscal as well as monetary policy which is in favor of the investors. Canada is the
global leader in the production of potash. The diversified endowment of minerals provides a lot
of benefits for Canada.
Analysis
General business environment of Canada- Canada is a highly mixed developed economy in the
world with its 10th largest gross domestic product. The economy of Canada is well dominated by
the service industry (O'Connor, Du & Roos, 2015). Canada is known to maintain a liberal trade

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regime in the economy. There is also absence of restrictions of foreign exchange and the import
licenses are usually needed for a limited number of goods.
Ease of doing business- the ease of doing business is known as an index which is published by
the World Bank. It is known as the aggregate figure which is known to comprise of various
parameters that define the ease of doing business in a country. Canada ranks 22 ND in the ease
of doing business in a country.
Getting electricity- the price of electricity in Canada is 13.3 US cents per kWh and the name of
the utility is Toronto Hydro. Canada ranks 121 in getting electricity score. The fossil fuels are
known to provide around 20 percent of Canadian electric power (Explore Economies. 2019).
Only five provinces in Canada will be using coal for generating electricity. The electricity sector
of Canada is known to play a crucial role in the political as well as in the economic life of the
country. The second largest single source of power is the nuclear power where there are several
plants in Ontario.
dealing with construction permit – the construction regulation matters a lot for the safety of
public. When procedures seemed to be complicated, builders will be proceeding without any
permit. The construction industry is known to account for 6.5 percent of the gross domestic
product in most of the countries. Canada is known to rank 63 in dealing with the permit of
construction where the estimated value of the warehouse is CAD 2,882,527.50. The Toronto
Municipal code is very essential for requesting a building a permit which takes 30 days to
complete. The building permit is issued by the City of Toronto.

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registering property – Canada ranks 34 in terms of registering property. Registering property
evaluated the 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. The Toronto land registry office is charged for
immovable property registration in Canada. Registering a property is therefore considered as an
important aspect for doing business. Therefore, are presence of pre registering procedures like
checking for liens and paying for property transfer taxes.
getting credit- getting credit in the ease of doing business in known to explore two set of issues
which is the strength of credit reporting system. The other is the effectiveness of collateral and as

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well as laws related to bankruptcy for facilitating lending. Canada ranks 12th in terms of getting
credit. This country is known to rank 9th in terms of strength of legal rights index. The credit
score is known as the three digit number which allows the lenders for determining the credit risk
for the potential borrowers(O'Connor, Du & Roos, 2015. The two national credit bureaus are
Equifax and the other one is TransUnion.
protecting minority investors Canada ranks 11th in protecting the minority investors. This score is
known to measure the strength of the protections of the minority shareholder against the misuse
of the corporate assets by the directors in case of personal gain. The Board of directors is known
to take decision for approving the transaction of buyer and seller.
paying taxes – the different kinds of taxes paid by Canadians every year are the profit tax, labour
taxes and contributions and the other type of tax. Canada is known to rank 19 in terms of paying
taxes (Explore Economies. 2019). The paying taxes is known to calculate payments, time, total
taxes for a firm in order to comply with the regulations of tax along with the process of post
filling.
trading across borders Canada ranks quite low in terms of trading across borders where it is
known to rank 50. The component traded are the vehicles except railways and tramways from
USA through Buffalo border crossing.
enforcing contracts- the claim value of enforcing contracts in Canada is CAD 110,205 where the
name of court is Ontario Superior Court of Justice and it takes more than 900 days. Canada ranks
96 for enforcing contracts.

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resolving insolvency Canada ranks 13 in terms of resolving insolvency in the world. Resolving
insolvency includes time cost and recovery rates of commercial insolvency.
Year
Ores
and
metal
export
2012
7.55444
3
2013
7.23953
1
2014
7.33295
2
2015
7.33388
8
2016
7.11278
8
2017 7.40572
2012 2013 2014 2015 2016 2017
6.8
6.9
7
7.1
7.2
7.3
7.4
7.5
7.6
Ores and metal export
The value shows that the ores and metal exports have declined in 2013 and 2016. However, it
was high in 2012amd in 2014. After 2016, the ores and metal export will be rising in the present
years.

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Human capital
Year
School
enrollme
nt %
2013 64.16662
2014 65.60953
2015 66.00291
2016 65.28307
2017 67.04385
2013 2014 2015 2016 2017
62.5
63
63.5
64
64.5
65
65.5
66
66.5
67
67.5
School enrollment %
School enrollment %
The graph above shows that the percentage of school enrolment ratio have increased till 2015,
however after in 2016, it declined sharply (World Bank Open Data | Data. 2019). Presently the
percentage of school enrolment is rising at an increasing rate.
Monetary policy in Canada- the monetary policy helps to preserve the value of money by
keeping inflation low stable as well as predictable in nature. One of the measure is the inflation
control target which makes sure that the inflation within its limit in the economy that is 2

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percent. The other measure is the The target for the overnight rate which is the policy for the
interest rate, it tries to control the rate of interest in Canada.
Impact of global financial crisis
Canada did not suffer much during the financial crisis which took place in 2008. The economic
growth of Canada had been quite concrete and better than most of the countries (Higham, Reis,
& Cohen, 2016).. Canada was the only G-7 country able to escape a financial crisis because of
the stability of the Canadian banks. None of the Canadian banks had been acquired, nationalized
or declared bankrupt during the event of financial crisis. Canada always had a strong fiscal
policy and resilient fiscal system.
Conclusion and recommendation
As Canada ranks 22nd in the ease of doing business, Australia should be investing in the mining
sector. Mining is known as Canada’s one of the primary industries which involves extraction and
refining of valuable rocks and minerals. The economy of Canada is well dominated by the
service industry. Canada is known to maintain a liberal trade regime in the economy. Canada did
not suffer much during the financial crisis which took place in 2008. The economic growth of
Canada had been quite concrete and better than most of the countries. Canada is known to rank
19 in terms of paying taxes. This country is known to rank 9th in terms of strength of legal rights
index. The above ranks suggest that it is profitable for Australia in investing in Canada since the
monetary as well as the fiscal policy is in the favour of the people who wants to invest. However,
the high ranks of enforcing contracts and trading across borders suggest that the government
should be working in these sectors.

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Reference list
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http://www.doingbusiness.org/en/data/exploreeconomies/canada#DB_ri
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