Canada's economy: service jobs at home, resources for one buyer abroad

What Canada takes from the ground and the forest

Natural Resources Canada estimates that the natural resources sector accounted directly and indirectly for 16.0% of nominal GDP in 2024, worth $459 billion in Canadian dollars. Energy contributed 7.8% of GDP, minerals and metals 3.9% and the forest sector 1.0%, and the three together supported about 1.8 million jobs. The department counted 628 communities in 2021 that were economically reliant on at least one resource sector: 280 on forestry, 174 on energy and 154 on minerals and metals. Governments took an average of $33.7 billion a year from the sector between 2019 and 2023, not counting indirect taxes, and in September 2024 the department listed 504 major resource projects under construction or planned over the following ten years, worth $632.6 billion, 340 of them in energy.

The weight shows up most in trade. Resource exports rose from $370 billion in 2023 to $383 billion in 2024, and that was 53% of the value of everything Canada shipped abroad as goods. Three quarters of the resource exports went to the United States, with China taking 6%, the United Kingdom 4% and Japan 2%.

The list of what comes out of the ground is long. The Canadian Shield and the north hold iron, nickel, zinc, copper, gold, lead, molybdenum and uranium, and diamond mines have opened in the Arctic. Sudbury in Ontario sits on what geologists read as an ancient meteorite impact basin rich in metal. In 2025 higher output of copper, nickel, lead and zinc lifted mining in Newfoundland and Labrador by 62.0% and in British Columbia by 9.4%, while iron ore output in Nunavut fell 27.2% and the Eagle Gold Mine in Yukon moved into remediation.

The prairies grow wheat, canola, oats, barley and flax. Agriculture and agri-food manufacturing added $49.0 billion to GDP in 2015, 2.6% of the total. The boreal forest supplies lumber, pulp and newsprint, and nearly two thirds of Canada's forest products go to the United States. The forest is also the subject of the softwood lumber dispute, in which the United States alleges that Canada unfairly subsidises its forestry industry.

How the oil sands changed the country's reserves

Alberta's first commercial oil sands operation opened in 1967. The Canadian Encyclopedia records that including the oil sands raised Canada's estimated oil reserves from about five billion barrels to about 173 billion, 97% of them in the form of bitumen. The deposits cover about 140,000 square kilometres along the Athabasca River around Fort McMurray, roughly a fifth of Alberta. In 2012 extraction contributed an estimated $91 billion to Canadian GDP.

Bitumen is too thick to pump. Where it lies within 70 to 100 metres of the surface, operators strip off the forest and soil and dig it out of open pits with shovels and trucks; producing one barrel this way moves up to two tonnes of sand, uses two to five barrels of water and emits an estimated 35 kilograms of carbon dioxide. Deeper deposits, which make up most of the licensed area, are worked in situ, by injecting steam to heat the bitumen underground and pumping it up. Steam-assisted gravity drainage, which made this possible at scale from the early 2000s, emits an estimated 55 kilograms of carbon per barrel and burns 28 cubic metres of natural gas.

The costs are argued over in the name itself. Supporters say oil sands, which describes the product; critics say tar sands, which describes the material and the difficulty of extracting it. The oil and gas industry produces 27% of Canada's greenhouse gas emissions, and those emissions have risen 84% since 1990, mostly because of the oil sands. The Aboriginal communities of Fort McKay and Fort Chipewyan lie downstream of the operations on the Athabasca, while Fort McMurray, upstream, carries the boom town's other costs: a high cost of living, a young and mostly male workforce, and a local budget tied to the price of oil.

Oil and gas output still grew in 2025. Statistics Canada recorded extraction up 4.1% in Alberta, 7.3% in British Columbia and 14.8% in Newfoundland and Labrador, where it helped the provincial economy grow 3.5%. Output fell in Saskatchewan for a second year and in the Northwest Territories for a third.

Oil has also divided the country politically. The National Energy Program of the early 1980s set out to make Canada self-sufficient in oil and to hold prices level across the country, especially for the manufacturing east, and it made Alberta sell oil east at low prices. It proved deeply divisive and was eliminated in 1985 amid a collapse in world oil prices. The Economy of Canada survey on Wikipedia notes the opposite effect in good years: foreign money flowing into western oil pushes up the Canadian dollar and makes Ontario's factory exports dearer.

Why one customer buys most of it

Canada's trade has run north and south since the Automotive Products Trade Agreement of 1965 removed tariffs on cars and parts. The Canada-United States Free Trade Agreement took effect in 1989, the North American Free Trade Agreement added Mexico in 1994, and the United States-Mexico-Canada Agreement replaced it on 1 July 2020. The Office of the United States Trade Representative put American goods exports to Canada at US$333.6 billion in 2025 and total goods and services trade between the two at an estimated US$872.3 billion.

The shares moved sharply in 2025, the year the United States announced tariffs on Canadian goods. Statistics Canada reported that exports to the United States fell 5.8% while exports to every other country rose 17.2%, and gold did most of the work: exports of unwrought gold, silver and platinum group metals rose 41.7% on higher prices. Energy exports fell 6.9%, mainly on price. Canada ran a merchandise trade deficit of $31.3 billion with the world, its third annual deficit in a row.

The figures are Statistics Canada's, in Canadian dollars on a balance-of-payments basis. Seen from Washington the same trade looks different: the Trade Representative put American goods imports from Canada at US$381.9 billion in 2025, down 7.2%, and the American goods deficit with Canada at US$48.3 billion. Canada's leading exports south are energy products and vehicles, with more than US$40 billion in farm products. Beyond North America, Canada has free trade agreements in force with the European Union since 21 September 2017, with the members of the Trans-Pacific Partnership since 30 December 2018, and with the United Kingdom, South Korea, Ukraine and others.

Where Canada still makes things

Manufacturing is concentrated in southern Ontario and Quebec. Central Canada has branch plants of every major American and Japanese carmaker and parts makers of its own, Magna International and Linamar among them. Aerospace is the other large industry: in December 2025 exports of aircraft and other transportation equipment reached a record $3.5 billion in a month, led by business jets and aircraft engines sold to the United States.

The sector has shrunk as a share of the economy. It reached 29% of GDP at its wartime peak in 1944. The World Bank series puts it at 17.3% in 2000 and 9.3% in 2022. A Statistics Canada study in 2009 found that output volumes had kept pace with the whole economy from 1961 to 2005 even as the share fell, so the fall in share was relative; the Great Recession then brought a real decline in output. In 2025 manufacturing output fell in ten of the thirteen provinces and territories, by 4.0% in Quebec, 6.2% in Saskatchewan and 1.6% in Ontario.

Cheap power built some of it. British Columbia and Quebec have large aluminium industries because their geography gives them cheap hydroelectricity.

How services came to employ most Canadians

The service sector employs about three quarters of the workforce and produces about 70% of GDP. Retail is the single largest employer, with almost 12% of workers. Business services, finance, real estate and communications follow, concentrated in Toronto, Montreal and Vancouver. Education and health care are both large and both run mainly through the provinces.

Housing sits at the centre of it. Real estate made up more than 13% of GDP by sector in 2024, and housing investment accounted for 25% of national wealth in 2024, up from 21% in 2021. In March 2015 the International Monetary Fund named household debt and an overheated housing market as the two weak points of the Canadian economy, and total household credit reached $2.2 trillion in July 2019.

Tourism and the industries that serve it contributed more than $100 billion to the economy in 2024. The public sector, education, health care and public administration, was among the main contributors to growth in 2025, although growth slowed in most provinces and output of Ontario's community colleges fell 10.6% as the cap on international students continued.

What hydroelectric power does for industry

Electricity is organised province by province, and in most provinces a large government-owned utility generates, transmits and distributes it. Hydroelectricity supplied 59% of all generation in 2016. Large projects since 1960 in Quebec, British Columbia, Manitoba and Newfoundland and Labrador built most of that capacity. Nuclear plants in Ontario and one in New Brunswick supplied 15%, and fossil fuels 19%, about half of it coal. Alberta, Saskatchewan and Nova Scotia used coal for close to half their power; Nunavut and much of the Northwest Territories run on diesel generators.

The grids are joined to the American ones. In 2017 Canada exported 72 terawatt-hours of electricity to the United States and imported 10. The World Bank puts the share of Canada's electricity from renewable sources at 67.0% in 2021.

How Canada's economy has grown this century

The World Bank puts Canada's GDP at $744.8 billion in current United States dollars in 2000 and $2.32 trillion in 2025, and GDP per person at purchasing power at $66,746 in 2025. Real growth turned negative twice in that span, by 2.9% in 2009 and 5.0% in 2020, and reached 6.0% in the rebound of 2021. It was 1.7% in 2025 by the World Bank's measure. Statistics Canada's industry-based measure gave 1.6% for 2025, with the Prairie provinces, home to 19% of the population, accounting for about a third of it.

The Bank of Canada has targeted inflation since the early 1990s, at 2%, the midpoint of a 1 to 3% range. Inflation reached 6.8% in 2022 and eased to 2.1% by 2025. Unemployment was 6.9% in 2025. The IMF put general government gross debt at 113.5% of GDP in 2025. That total includes every level of government: in the fiscal year 2019, 47% of consolidated government liabilities were federal and most of the rest provincial.