Canada's Industries, the Economy and the World

Hook: what does Canada really make?

If someone asked you what Canada's economy is built on, you might say maple syrup, hockey sticks, oil and lumber. Those matter, but the biggest parts of the economy are things you might not picture first: real estate, manufacturing, construction, health care, retail and finance. To understand which industries matter most, geographers look at data, and they look at it in more than one way.

Remember from Grade 8: the four sectors

• Primary: taking resources from nature (farming, fishing, forestry, mining, oil and gas).
• Secondary: making things (manufacturing, construction, food processing).
• Tertiary: services (retail, health care, transportation, tourism).
• Quaternary: knowledge and information (research, software, finance and data).

Statistics Canada groups industries into goods-producing (primary and secondary industries plus utilities) and service-producing (tertiary and quaternary). In 2023, service-producing industries made up about 73.9% of Canada's GDP and goods-producing industries about 26.1% (Statistics Canada Table 36-10-0434-01, as reported by Transport Canada).

How important are natural resources?

Directly, mining, oil and gas, and agriculture, forestry and fishing look fairly small in the GDP chart. But they support many other industries: trucks and trains carry resources, factories process them, and banks finance the projects. Natural Resources Canada (10 Key Facts on Canada's Natural Resources, 2024 data) reports that the natural resources sector:

• accounted, directly and indirectly, for 16.0% of Canada's nominal GDP;
• supported about 1.8 million jobs (direct and indirect);
• made up 53% of Canada's merchandise exports;
• provided major income to 628 communities that relied on at least one resource sector (2021 data).

This shows why how you measure matters. Judging only by the extraction industries in the GDP chart, resources look small (NRCan counts processing such as sawmills, refineries and smelters as part of the sector too: 12.7% of GDP directly, 16.0% with indirect effects); judging by exports or by the economies of small towns in northern Ontario, they are huge.

Connected to the world

Canada trades a lot because its population is small compared with what it produces. Statistics Canada reports that in 2024, the United States was the destination for 75.9% of Canada's total merchandise exports and the source of 62.2% of its imports.

Trade agreements shape these connections:

• CUSMA (Canada-United States-Mexico Agreement), in force since 2020, replaced NAFTA.
• CETA with the European Union.
• CPTPP with countries around the Pacific, such as Japan, Australia and Vietnam.

Integrated supply chains: in the auto industry, materials and parts can cross the Canada-U.S. border several times before a vehicle is finished. This makes industries on both sides interdependent: a problem on one side (a strike, a bridge closure, a new tariff) affects factories on the other. In 2025, the United States placed tariffs on many Canadian goods, including steel, aluminum and vehicles (many goods that met CUSMA rules were exempted, and the rates changed several times during the year), which showed how much Canadian jobs depend on trade with one country. Many businesses and governments responded by looking for ways to diversify trade with other countries.

Investment and companies: foreign companies own many plants in Canada (most auto assembly plants in Ontario belong to companies headquartered in Japan, the U.S. or Europe), and Canadian companies, especially mining companies, operate around the world.

Value-added: Canada often exports raw or lightly processed resources (crude oil, logs, ore concentrates) and imports finished goods. Processing more at home, such as turning critical minerals into batteries, would keep more jobs and value in Canada.