Quebec

Ontario

Saskatchewan

British Columbia

Nova ScotiaAlberta

ManitobaPrince Edward Island

New Brunswick

Newfoundland

Canada is divided into 10 provinces.

A province is a political boundary that divides Canada into different regions. Provinces are equivalent to our states.

Canada is a parliamentary democracy and a constitutional monarchy. This means Canadians recognize The Queen as their Head of State. The Governor General, Adrienne Clarkson, carries out Her Majesty’s duties in Canada. The Prime Minister is the Head of Government. Together, they make up the Executive Branch of the Government.

Queen Elizabeth II Adrienne Clarkson Jean Chetien

LEGAL SYSTEM

LAW-MAKING JURISDICTION

Provincial GovernmentLegislature

*law-making jurisdiction bys. 92 Constitution Act 1867

Federal GovernmentParliament

Senate*law-making jurisdiction

By s. 91 Constitution Act 1867

Municipal Governments*law-making jurisdiction byThe Provincial Legislature

Territorial Governments*limited self government

*subject to federal control

Monetary Policy Actions of the Bank of Canada

Expansionary Policy Restrictive PolicyTools (stimulate business (slow down business activity

activity and increase the and decrease the moneymoney supply) supply)

Open Buy government securities: Sell government securities:

Market (increases bank reserves (decreases bank reserves

Operations enabling banks to make loans limiting the banks' abilities to businesses and to make loans to businesses

consumers) and consumers)

Lower the bank rate: Raise the bank rate:(increase the willingness of (decrease the willingness of

Bank Rate banks to borrow, more loans can banks to borrow, fewer loans canbe made to businesses and be made to businesses and

consumers) consumers)

With its great natural resources, skilled labor force, and modern capital plant Canada enjoys solid economic prospects. Canada has changed from being a rural, agricultural society to being primarily industrial and urban.

The Bank of Canada

• The central bank of Canada

• Managed by a Board of Governors

• Regulates operations of the chartered banks

• Manages the economy by manipulating the money supply to expand or restrict the economy

So what, then, is money?1. Money is a medium of exchange

- that is, it works as a vehicle for the exchange of goods and services.

- this eliminates the need for a “ double coincidence of wants.”

vs.

What is the difference between money and currency?

Money is the product of markets

It is defined by the function it performs (which we will see shortly)

“Money is a mental tool used for economic calculation that ingeniously enables each of us to communicate

what we value in an exchange.”

The Bank of Canada is responsible for the design and distribution of Canadian bank

notes.

Canadian bills are called “notes.”

The Bank of Canada must be prepared to supply financial institutions with enough bank notes to satisfy public demand.

• The Canadian dollar (C$) is a

paper currency of 100 cents.

There are coins of 1,5,10 25,

and 50 cents,1 dollar and 2

dollars, and notes of 2,5,10,20,50,

100,and 1,000 Canadian dollars.• US currency is usually

accepted ,especially in major cities

and along the border.

Canadian currencyCanadian currency

Instead of using notes to represent One and Two Dollars, coins are used instead. They are referred to as a “Loonie” for one dollar, and a “Twoonie” for two dollars.

Loonie

Twoonie

The Loonie was designed to replace the country's supply of one-dollar bills, which was costing the Government of Canada over $16.6 million to replace each year. The thin paper dollars had only a one-year life span, while the coins were each expected to last as long as twenty years.

Exchange Rates and Trade• Exchange rates influence the willingness of Canadians

to invest abroad and buy imported items (or vice versa)

• A trade surplus occurs when Canada is exporting more products than it is importing (likely to occur when the dollar is undervalued)

• A trade deficit occurs when Canada is importing more products than it is exporting (likely to occur when the dollar is overvalued)

Exchange Rate Over Time

Composition of Revenues for 2013–14

Composition of Expenses for 2013–14

Canada’s economy is related to producing goods and services. This is done through importing and exporting goods. Importing goods is when Canada buys, then sells goods that are developed in other countries, such as the United States. Exporting goods, is when Canada ships their goods to other countries to be sold.

automobile industry

aircraft industry

With a long coastal line, Canada has the 8th largest commercial fishing and

seafood industry in the world.

78% of GDP

12% of 12% of CanadiansCanadians12% of 12% of

CanadiansCanadians

EXPORT AND IMPORT• Canada is the 10th largest exporter and 12th largest importer in the world. • Agricultural products, crude oil, chemicals, electricity, durable consumer goods, machineries.

• Total value of exports(2014): $528 billion

• Primary exports partners: US ($396 billion), UK ($63 billion), China ($42.3 billion)

• Total value of import(2014): $523 billion

• Primary imports partners(2014): US ($349 billion), European Union ($49 billion), China ($35 billion).

Which country does Canada import most of its goods from?

Fruits and Vegetables Plastics

Motor Vehicles

Office Machinery

Aircraft

Where does Canada export most of its goods to?

Wheat

Lumber

MetalsCorn

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