Lesson 16 — Activity 1: Our Economy

Canadians enjoy a high standard of living, have excellent communication and transportation systems, and are a highly educated and skilled labour force. Canada is a successful trading nation whose leading industries include manufacturing of automobiles, pulp and paper, iron and steel, machinery and equipment, as well as mining, extraction of fossil fuels, forestry, and agriculture.

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In a free-market economy, decisions about what should be produced and in what quantity is controlled by the price mechanism. This means that consumers choose whom to buy from and how much they are willing to pay. Individuals may invest in or operate their own businesses to make profits. This is like the supply and demand concept you learned about in a previous lesson.

In a free market, buyers and sellers come together to decide on what products to produce, sell, and buy, as well as how resources such as labour and capital should be used.

Canada's Economy

In Canada's mixed economy, all the features of the free market economy are present, but the government oversees the whole process to help maintain a healthy balance for all parties. This is why our economy is known as a mixed economy, because it is a system that combines private (businesses) and public (government) enterprises.

The government helps the market in many ways, such as health care, environmental care, education, etc., in order to maintain the economy of Canada. In Canada, people privately own the industries, and there are some industries and companies that are publicly owned by the government so citizens take their own responsibility to make smart choices, which helps both them and the country. The government also helps people in many ways, like building facilities for homeless or disabled people who aren't stable enough to take care of themselves and their families. Canada is viewed as having a mixed economy because it combines private ownership and government control.

Each province has a document called a Labour Act that clearly outlines the rules and regulations governing working conditions for employees. Aspects such as the total number of hours in a work week, required breaks, etc. are included. Provincial governments also set a minimum basic wage for workers.

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Did you know?

You may have heard that Canada's banks escaped much of the meltdown that occurred near the end of 2009 with banks in other countries. This is because of government regulation of the banking industry in Canada. These regulations proved to be so successful that governments in other countries are now basing their systems on the Canadian system.

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In a mixed economy such as Canada's, a government may offer incentives for an industry to establish itself in an area where there is a high rate of unemployment. The laws of supply and demand determine what, how, and where goods and services will be produced and who will consume them and when. To maintain a healthy economy that benefits all Canadians, Canada's governments at several levels oversee the complete process of passing laws, establishing rules and regulations, and offering assistance, etc. to ensure that the system is fair to all.

Click here to visit a website where you can read about how the Government of Canada supports economic development in the western provinces (Alberta, British Columbia, Saskatchewan, and Manitoba).

Self-check!