Pages 242-265
Chapter 12: Canada and the Global Economy
Key Terms Economy Pre-industrial society Industrial stage Post-industrial stage Globalization Transnational corporations Capitalism Demand economy Command economy Mixed economy GDP Free trade Protectionism Fair Trade
Canada: An Industrialized NationCanada can be described as encompassing
many places.To get the “big picture” you must consider
Canada’s role within the world economy.There are also many differences within
Canada which make things complicated.This chapter looks to the past for the
context and toward the future for possible changes
Canada Within the World EconomyHere is how we categorize our countries:1. More developed country (one that is
technologically advanced and wealthy)2. Less developed country (one that is at
a relatively early stage in the process of economic development).
Stages of Economic DevelopmentThere are 3 stages to Canada’s economic
growth:1. Pre-industrial (primary)2. Industrial (secondary)3. Post-Industrial (tertiary and quaternary)
Pre-IndustrialMost workers are involved in primary industry
(agriculture, collecting and using natural resources).
After European contact most of Canada’s economy was pre-industrial
INDUSTRIAL STAGE:Secondary activities dominate the economy:
processing raw materials (mining and agriculture)Tertiary activities start to become more important
(provide services ie) insurance, banking, and retailing.
During the 19th century railways were built to connect the regions of Canada.
Canada safeguarded these industries through protective tariffs (taxes on imported goods)
Post-Industrial StageMost people work in tertiary and quaternary
activities.Quaternary activities are based on knowledge
and information (research and development).Post-Industrialzation and globalization require
easy interaction among economies and highly efficient transportation and communication systems.
Protective tariffs are reduced are eliminated (1970s).
See page 245 of your text to see how Canada’s economy is post-industrial
Economic Divisions within CanadaEconomic development is uneven.Different regions are at different stages of
development. This is often referred to as Regional Disparity.
Heartland vs. Hinterland (point of view on regional disparity).
Heartland refers to a centre of dense population and economic power. Ex) Tertiary and Quaternary Dominate
Hinterland refers to one that is distant from the heartland and has les economic activity (geographic regions).
Ex) Primary and Secondary activities dominate
How Does Canada’s Economy Work?Canada’s economy is very complex. Here are
some KEY CONCEPTS that will help you understand:
Consumer-based economy (what we buy and prices)
Demand economy (government doesn’t intervene)
Command Economy or Planned economy (central government decides what is produced. Gov’t owns everything, everyone's needs are met; wants are less important. (communist or socialist)
Demand Vs. MixedCanada falls into a mixed economyThink of this as the political spectrum
Command economy would fall on the left.Demand is on the rightMixed is in the middle
GlobalizationKey Question: How does being a part of a
global economy help and harm Canadian society and its economy?
Globalization brings increased foreign investment.
TNC’s may set up factories, but may also buy up more Canadian businesses.
Pros DrawbacksFactories are more
productive when owned by TNC’s
More innovativeAdvanced technologyEmployed more
skilled workersConducted more
research and development
Paid better wagesLower prices
Too much power in the hands of TNC’S
Weaken countries, influence national governments
Less sovereignty, especially in smaller countries
Smaller businesses cannot survive (ex. Wal-Mart, Home Depot)
Poor treatment of workers Low wages Child labour Weak environmental policies TNC’S have no stake in society just
want $ Commitment to society is weakened
can pick up and move at any time Could lead to greater inequality,
instability, and conflict
Foreign Investment in Canada
StatisticsFrom 1985-2005 almost 4,000 foreign
owned companies set up facilities in Canada.
In 2005 alone, there were 554 foreign takeovers or new businesses set up in Canada.
Foreign investment is crucial in the survival of the Canadian economy.
Assignment Define all key terms in chapter 13.
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