Canada's silent power: How natural resources, cultural influence, and policy make it a global economic force in 2025
TOI-Online Canada's economic and cultural hubs, like Montreal and Calgary, exemplify the nation's strategic blend of resource wealth and cultural influence in 2025
As of May 2025, Canada's nominal GDP is approximately $2.545 trillion, positioning it as the ninth-largest economy globally. The Bank of Canada projects a real GDP growth rate of 1.8 per cent for 2025, driven by increased household spending and housing activity, despite challenges such as slowing population growth and trade uncertainties.Canada's economy is highly developed and diversified, encompassing sectors such as real estate, manufacturing, mining, and services. It is one of the few developed nations that are net exporters of energy, with significant reserves of oil, natural gas, and uranium. The country is also a leading exporter of agricultural products, including wheat and canola, and holds substantial mineral resources like gold, nickel, and potash.
Canada's trade relationships further underscore its economic significance. In 2022, the US and Canada engaged in over $962.9 billion in bilateral trade, making Canada the single largest global customer for American goods and services. Such robust trade ties highlight Canada's integral role in the North American and global economies.Alberta stands as Canada's leading oil-producing province, accounting for approximately 79.2 per cent of the nation's oil production. The province's vast oil sands contribute to Canada's position as holding the third-largest oil reserves globally. Alberta's energy sector significantly impacts exports and GDP, with oil and gas comprising a substantial portion of its exports. In 2022, Alberta's exports to the US were valued at $183.8 billion, reflecting its critical role in Canada's trade dynamics.Beyond energy, Alberta has been diversifying its economy, expanding into technology, renewable energy, tourism, and finance. This diversification aims to reduce dependence on oil and foster sustainable economic growth.
Quebec is renowned for its renewable energy capabilities, producing most of Canada's hydroelectricity and ranking as the second-largest hydroelectricity producer globally. In 2019, Quebec's electricity production amounted to 214 terawatt-hours, with 95 per cent derived from hydroelectric power stations. The province's public utility, Hydro-Québec, operates 63 hydroelectric power stations and 28 large reservoirs, positioning Quebec as a potential clean energy superpower.Quebec's forestry industry also plays a vital role in its economy. In 2024, the forest sector employed over 61,000 workers and exported $11.3 billion in forest products to global markets. The federal government announced a total investment of over $13.3 million in 2025 to boost the competitiveness and resiliency of Quebec's forest sector, supporting innovation and sustainable practices.Canada's abundance of natural resources extends beyond energy and forestry. The country is a significant producer of uranium, with Saskatchewan's McClean Lake and Cigar Lake mines supplying crucial uranium oxide concentrate for nuclear reactors. In 2022, France imported over 2,943 tonnes of Canadian uranium, highlighting Canada's strategic role in global energy security.
Moreover, Canada's participation in international organizations such as the United Nations, G7, G20, NATO, and the Commonwealth amplifies its voice on the global stage. The country's commitment to humanitarian and development goals, along with its reputation for good governance, enhances its soft power and influence in international affairs. Cities like Montreal exemplify the economic potential of cultural industries. Home to renowned festivals and institutions like Cirque du Soleil, Montreal's cultural sector contributes 6% to the city's GDP and provides over 130,000 jobs. This cultural capital not only boosts the economy but also enhances Canada's global influence.Canada's political landscape plays a crucial role in shaping its resource and cultural policies. The Conservative Party, under leaders like Pierre Poilievre, advocates for aggressive resource development, proposing initiatives like a national energy corridor and fast-tracked approvals for pipelines. This approach emphasizes economic sovereignty and aims to reduce dependence on US markets.
In contrast, the Liberal Party, led by Prime Minister Justin Trudeau, focuses on balancing traditional resource development with environmental sustainability. Trudeau's administration has faced criticism for policies perceived as hindering Alberta's oil industry, leading to tensions and discussions of provincial autonomy. Canada's bilingual framework, with French and English as official languages, reflects its commitment to inclusivity. French speakers constitute 23 per cent of the population but represent 29.2 per cent of the federal public service, including 32 per cent in management roles. This overrepresentation underscores the significant influence of French Canadians in shaping national policies.The integration of French cultural values into policymaking has led to a more inclusive and diverse approach to governance. This contrasts with the United States, where cultural and linguistic diversity is less institutionalized at the federal level. Comedian Bill Burr humorously remarked, "Just because you're north of the border, they're still white men," highlighting perceptions of homogeneity. However, Canada's official bilingualism and multicultural policies demonstrate a structured commitment to diversity.Canada faces several economic challenges, including a rising unemployment rate, which reached 6.9 per cent in April 2025, the highest since November 2024. This increase is attributed to US tariffs impacting key sectors like manufacturing. Additionally, the services sector has experienced contraction for five consecutive months, with the S&P Global Business Activity Index at 41.5 in April.Despite these challenges, Canada's economic fundamentals remain strong, with significant natural resources, a diversified economy, and robust trade relationships. Strategic development of northern territories and continued investment in cultural industries can further bolster Canada's economic resilience.
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A recalibration is indeed in order: one balancing security with openness and reaffirming the value of international students. Else the US could squander its role as a magnet for the world's brightest.—with Ajay SukumaranMust Watch
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