IB CIA 1.

SAMIKSHA
AGARWAL
1820375

CANADA- PESTLE,
SWOT ANALYSIS
CANADA COUNTRY PROFILE

Canada is a rich and beautiful country full of agricultural land, but the majority of the
population resides in the southern provinces. In 1867, Canada became a recognized country
by the British North America Act. Nearly one hundred years later, the country chose their
official white flag: a maple leaf between two red stripes. Now, Canada has become the
second largest country in the world, following behind Russia.

PESTEL ANALYSIS OF CANADA

Political

Economical

Social

Technological

Legal

Environmental
POLITICAL ASPECT OF THE COUNTRY:

Type of Government: Parliamentary democracy and a federal system of parliamentary

government with strong democratic traditions.

Canada has a multi-party system in which many of the country's legislative practices derive
from the unwritten conventions of and precedents set by the United Kingdom's Westminster
Parliament.

The two dominant political parties in Canada at present are, the Conservative Party of Canada
and the Liberal Party of Canada, but smaller parties such as the social democratic New
Democratic Party, and the Green Party of Canada can exert their own influence over the
political process.

Liberalism has generated supporters and adversaries from the time the second Prime
Minister of Canada, Alexander Mackenzie, became a member of the Liberal Party all the
way up until today, where Liberalism continues to dominate the House of Commons.

Cabinet
Ministers (usually around thirty) chosen by the Prime Minister and appointed by the
Governor General to lead various ministries and agencies, generally with regional
representation. Traditionally most, if not all, cabinet ministers will be members of the leader's
own party in the House of Commons (see Cabinet of Canada); however this is not legally or
constitutionally mandated, and occasionally the Prime Minister will appoint a cabinet
minister from another party.

ECONOMICAL ASPECT OF THE COUNTRY:

One of the wealthiest nations of the world, Canada is a member of the Organization of the
Economic Cooperation and Development (OECD) and the G-8. Canada’s economy is
dominated by the service sector. One of the few nations in the world to be a net exporter of
energy, Canada finds its place amongst the top ten trading nations in the world.

Canadian inflation rate rose less than expected in December, ending the year at 2.4%
January 25, 2013
Nearly 70% of Canada’s Gross Domestic Product (GDP) is contributed by its service sector,
which employs over 75% of the country’s population. The country’s agriculture sector
contributes only 2% of the GDP, employing a similar proportion of its people.

Canada’s trade and economic integration with the United States has witnessed a dramatic
increase, following the signing of the 1989 US-Canada Free Trade Agreement (FTA) and the
1994 North American Free Trade Agreement (NAFTA). The US is Canada’s largest trading
partner, besides being its largest foreign investor through investments in mining, smelting,
petroleum, chemical and machinery segments. This has linked the Canadian economic policy
even more to the United States. Even a minor change in the US interest rates has
repercussions in Canada.

SOCIAL ASPECT OF COUNTRY:

Income

The average family income in 2000 was $66,160; Top 20% of families receive 43.6% of the
income, while the bottom 20% receives only 5.2% of the income. This level of inequality has
been maintained for 45 years. Clearly, Canada has less income disparity than the United
States

Schooling

Education is an important determinant of labor force participation, occupation and income,

and it is highly valued in Canada and other industrial societies. Although education is
generally conceived to be a right, there has not always been equal participation by women.
Lately, women have completed more schooling than men.

Gender

Women earn less income, accumulate less wealth and enjoy less occupational prestige than
men.

SOCIAL CLASSES IN CANADA

The Upper 3 to 5% of Canadians fall Much of their wealth is inherited, their children
Class into this class. go to private schools and they exercise great
power in occupational positions. Although this
group has historically been primarily of British
origin, it is now more widely distributed.
Upper- One percent belongs to an Primarily of "old money".
uppers upper-upper level
distinguished

Lower- The remaining 2-4% falls Depend more on earnings than inherited wealth.
uppers into the lower-upper level
and

The Middle Roughly 40-50% of the Because of its size it has tremendous influence
Class Canadian population falls on patterns of North American culture. There is
into this category. considerable racial and ethnic diversity in this
class and it is not characterized by exclusiveness
and familiarity. The top half of this category is
termed the "upper-middle" class with family
incomes of $50,000 to $100,000 earned from
upper managerial or professional fields.
According to the Social Diversity, the middle
class dominate the Calgary Stampede.
The This class comprises Have lower incomes than the middle-class and
Working about one-third of the virtually no accumulated wealth. Their jobs
Class population provide less personal satisfaction.

The Lower The remaining 20% of In 2001 roughly 15% of the Canadian
Class our population is population was labeled as poor. Many are
identified as the lower supported entirely by welfare payments while
class. others are among the "working poor" whose
incomes are insufficient to cover necessities like
food, shelter, and clothing.

POVERTY IN CANADA
Approximately 4.4 million Canadians live below the "poverty line," that point below which
people spend approximately 55% of pre-tax income on food, clothing, and shelter. A recent
United Nations report has criticized Canada for making no measurable progress in alleviating
poverty. A "wealthy" society finds 2 million people regularly making use of food banks and
soup kitchens.

Children are more likely to be poor than any other age group. 15.6% of people under the age
of eighteen are officially classified as poor. Canada is on average very low but improves over
time as they acculturate to Canadian society.

The poverty rate for the elderly has been declining but as the boomers retires; we will see a
rise in the absolute number of elderly poor.

TECHNOLOGICAL ASPECT

Internet

The internet becomes an important source of information, marked by the popularity of such
sites as Wikipedia and Google Earth. Many articles have been contributed to both the English
and French language versions of Wikipedia by Canadians and many of these relate to
important aspects of Canadian life. There are thousands of Canadians who use the service
every day in both English and French. Google Earth, a virtual globe, is an on-line feature
offered by Google since 2005. It provides aerial views of the earth, including Canada and is
viewed by thousands of web users every day including many Canadians. Another internet
information service, a telephone directory, Canada 411.ca has become very popular since
introduced in recent years, so much so that the delivery of the residential paper telephone
book which was introduced to Canada in 1878, will cease in major cities in 2010.

Digital Communication / HD TV (Delivery)

Two Toronto-based companies, Sirius Canada and XM Canada introduced direct-to-

home/car, digital satellite radio service in December 2005 and by 2008 had 750,000 and
400,000 subscribers respectively. In 1999 Telesat launched the first of four Nimiq direct
broadcast satellites which provide the space-based satellite transmitters for these services.
In 2003 Bell Canada introduced an improved speech recognition system for its 310-2355
customer routing service in Ontario. Bell Canada users speak with the programme through
"Emily" a young female-sounding artificial voice. In 2005, Skype, a voice-and-moving-
picture-over-internet technology became available to users around the world, including
Canadians. The technique, which bypasses the traditional telephone network, allows people
to use the internet as a type of telephone and to both talk to and see each other during calls. It
is used mainly for long-distance communication.

Digital Courts

The University of Montreal has recently experimented with ways to improve the
administration of justice by creating a digital court room in which mock trials are held using
modern technology to speed the proceedings. The "courtroom" has facilities for filing
documents electronically. Witnesses can testify by video link or holographic ally from a
remote location. Documents can be served on parties through social media. According to
those involved with the project, barriers to its application in real courtroom settings are not
technological but rather emotional, with judges and lawyers being resistant to change.

ENVIRONMENTAL ASPECT OF THE COUNTRY:

Environment Canada (EC), legally incorporated as the Department of the Environment

under the Department of the Environment Act (R.S., 1985, c. E-10), is the department of the
Government of Canada with responsibility for coordinating environmental policies and
programs as well as preserving and enhancing the natural environment and renewable
resources.

Duties includes

(a) the preservation and enhancement of the quality of the natural environment, including
water, air and soil quality; (b) renewable resources, including migratory birds and other non-
domestic flora and fauna; (c) water; (d) meteorology; (e) the enforcement of any rules or
regulations made by the International Joint Commission; and (f) the coordination of the
policies and programs of the Government of Canada respecting the preservation and
enhancement of the quality of the natural environment.
Environment Canada continues (2005-present) to undergo a structural transformation to
centralize authority and decision-making, and to standardize policy implementation.

LEGAL ASPECT OF COUNTRY

The Canadian legal system has its foundation in the British common law system, inherited
from being a former colony of the United Kingdom and later a member of the
Commonwealth of Nations. Quebec, however, still retains a civil system for issues of private
law. Both legal systems are subject to the Constitution of Canada.

Common law

All provinces and territories within Canada, excluding Quebec, follow the common law legal
tradition. Equally, courts have power under the provincial Judicature Acts to apply equity.

Only the Supreme Court of Canada has authority to bind all courts in the country with a
single ruling. The busier courts, such as the Court of Appeal for Ontario, for example, are
often looked to for guidance on many local matters of law outside the province, especially in
matters such as evidence and criminal law.

Criminal offences are found within the Criminal Code of Canada or other federal/provincial
laws, with the exception that contempt of court is the only remaining common law offence in
Canada.

Civil Law

For historical reasons, Quebec has a hybrid legal system. Private law follows the civil law
tradition, originally expressed in the Coutume de Paris as it applied in what was then New
France. Today, the jus commune of Quebec is codified in the Civil Code of Quebec. As for
public law, it was made that of the conquering British nation after the fall of New France in
1760, which is the common law.

It is important to note that the distinction between civil law and common law is not based on
the division of powers set out in the Constitution Act, 1867. Therefore, legislation enacted by
the provincial legislature in matters of public law, such as the Code of Penal Procedure,
should be interpreted following the common law tradition. Likewise, legislation enacted by
the federal Parliament in matters of private law, such as the Divorce Act, is to be interpreted
following the civil law tradition and in harmony with the Civil Code of Quebec.

SWOT ANALYSIS

Strengths

Strong Financial Sector

The whole world is aware of the stability and security of Canadian financial institutions due
to the 2008 economic crisis. While other countries were faced with credit and housing crises,
Canadians were relatively protected due to, “conservative spending practices and strong
capitalization.” (CIA World Fact Book, Economy Overview section, n.d.) In fact, Canada’s
banking system is now known as the, “envy of the world.” (McRobie, 2009)

Large Services Sector

Most businesses in the service sector are small enterprises with less than fifty employees
(Statistics Canada, Majority of Canadians section). 76% of Canada’s workforce is in the
services sector (CIA World Fact Book, Economy section). Therefore, small service-oriented
businesses comprise the largest employer in Canada. In fact, “[s]ince 1961, services have
increased from just over half to two-thirds of Canada’s gross domestic product.” (FITT, 2013,
p. 35) Canada’s ability to leverage its service oriented small businesses in international trade
is key to Canada’s growth.

Oil Sector

Another sector that the world may envy is Canada’s abundance of natural resources, in
particular, our domestic oil supply. Canada ranks third, behind Saudi Arabia and Venezuela,
in proven oil reserves. (CIA World Fact Book, Economy section) Canada is the number one
supplier to the United States in oil.

NAFTA and Canada’s close proximity to the United States

Canada has the great fortune of being a neighbor of the United States. The United States is
the most powerful economy in the world. Since the creation of the North American Free
Trade Agreement (NAFTA) Canada has had a, “substantial trade surplus with the US, which
absorbs about three-fourths of Canadian merchandise exports each year.” (CIA World Fact
Book, Economy section)

Weaknesses

 Heavy Trade Reliance on the United States: While Canada’s proximity to the United
States is certainly an asset, Canada’s reliance on the United States as a trading partner
can be considered a weakness. 74.5% of Canada’s exports are sent to the United
States. (CIA World Fact Book, Economy section) Conversely, US imports of
Canadian products equates to only 14.1% of America’s overall imports. The United
States imports more from China (19% of overall imports) than from Canada.
Canada’s exports during the US recession took a huge hit and a diversification of
Canadian exports should be explored (Lane, 2014, Innocent Bystander section).
 Canada’s Transportation Infrastructure: Another weakness to the Canadian
economy that has been in the news lately is Canada’s transportation infrastructure.
From trains, pipelines, bridges and major roads, Canada is facing a crisis point.
Montreal has had a series of road and overpass collapses in recent history sparking an
investigation into mafia connections in the construction industry and bribery of public
officials. Canada’s railroad system faced a major disaster with the Lac Megantic train
derailment that caused 47 deaths and extensive damage to the small Quebec
community. Lastly,

Opportunities

 Service Sector: While Canada’s service sector accounts for 69.9% of Canada’s GDP
(CIA World Fact Book, Economy section), exports in the service sector shrank by 1%
in 2012 (DFATD, 2013, Executive Summary section). This means that Canada has a
lot of potential to export services.
 Emerging Markets: Canada should explore exporting to emerging markets.
According to DFATD, in 2012, “global inflows declined by 18.2 percent, with
inflows into developed economies declining by almost a third and overtaken, for the
first time, by inflows into developing economies.” (DFATD, 2013, section 6) With
the slow growth in the United States and European Union, the potential for exporting
 to emerging markets should not be ignored. For example, the Canada-Indonesia
Business Council has stated that Indonesia needs everything Canadians are good at
supplying including education, medical services and technologies. (Smith, 2014)

Threats

 Appreciation of the Canadian Dollar: The strong Canadian dollar compared to other
countries such as China makes Canadian exports more expensive to purchase. This is
evidenced by the United States which has increased its imports from China
dramatically in the past decade.
 EU Debt Crisis: Another potential threat to the Canadian economy is the continued
European economic stagnation due to the sovereign debt crisis. While Canada is
signing a free trade agreement with Europe, it will not do any good if Europe cannot
afford to buy Canadian products.

BUSINESS OPPURTUNITIES IN CANADA

The transportation and storage industry comprises passenger transportation services and
the shipping of goods, as well as warehousing and storing products. One nice thing about
this industry is you can start small, purchasing a single truck and soliciting a handful of
customers, then you can easily expand by hiring more drivers and putting more trucks on the
road as your customer base grows.

Reasons:

 According to the Canadian government, more than 86 percent of small- and medium-
sized enterprises engaged in transportation and storage are profitable as of 2016, with
average yearly revenues exceeding $279,000.
 Canada has huge opportunities for the services sector and has received a lot of
investments and subsidies for it.
 Canada, being a cold country faces storage issues for a large portion of the year. Thus
this is beneficial for the economy.
 An Example in this business could be Tow-Truck Services
REFERENCES:-

http://www.international.gc.ca/economist-economiste/performance/state-
point/state_2013_point/index.aspx?lang=eng#1.0

http://www.bankofcanada.ca/2014/09/are-we-there-yet/

http://www.theguardian.com/commentisfree/cifamerica/2009/mar/19/canada-us-economy

http://www.theglobeandmail.com/report-on-business/international-business/asian-pacific-
business/indonesia-ripe-for-smaller-canadian-business/article20720057/

http://www41.statcan.gc.ca/2006/0163/ceb0163_000-eng.htm

https://en.wikipedia.org/wiki/Agriculture_in_Canada