The Canadian Economy Canadian Economy is currently on its strongest period of economic growth in its history.

It is approaching a new era. The one major factor that affects Canadian economy is the economy translation of United States of America. Canadian economy is heavily influenced upon the decisionsA of United States of America. Because Canada and USA are strong trading partners, Canadian economy is directly proportional to USAs economy. But there is more than one factor that affects any countrys economy. Canadas strong labour force, natural recourses, investments, monetary system, and employment rate made them stronger economically then US. As seen on the above chart, Canadian financial position has been stronger from past few years. Bank of Canada has implemented monetary policy which is closely linked to the system through which payments clear and settle daily. The Bank of Canada establishes a target rate for the overnight interest rate within an operating band in order to influence other short-term interest rates and the exchange rate. The ability to influence other short-term rates partly reflects the fact that inventories of money market securities are generally financed with overnight funds. However other factors such as

changing market expectations and exchange rate developments also affect how other interest rates, including those with relatively short terms to maturity, respond to changes in the target rate.[2] As mentioned early trade is essential part of the Canadian economy. Any penalty from USA will create big shift in many industries. Canada produces and supplies many things to USA. Therefore, if USAs economy goes down, they will decrease the trading. That will result in increase of unemployment. But The labour market is in its best shape in a generation with the 5.9% unemployment rate with 400,000 new jobs; Todays labour market shortages provide us a glimpse of the tight labour markets that will likely result from population aging and as seen in the chart population aging will dramatically reduce labour force growth. The extraordinary growth in our labour supply over the last 50 years due to the Baby Boom -- will fall off dramatically over the next 50 years.[2] While this occurrence is probable to happen in all developed economics, it will be especially pronounced in Canada. Canadian household net worth and corporate profits are near record highs. Moreover, Canadas real income per capita has risen by more than 20% since the end of 2001, more than double that of the U.S. over this period. [1] Inflation rate refers to a general rise in prices measured against standard level of

purchasing power. The most well-known measures of inflation are the CPI which measurers

consumers price, and GDP deflator, which measures inflation in the whole of domestic economy. The above shows Canadas inflation rate chart. The inflation rate in Canada was last reported at 2.9 percent in October of 2011. From 1915 until 2010, the average inflation rate in Canada was 3.26 percent reaching an historical high of 21.60 percent in June of 1920 and a record low of -17.80 percent in June of 1921. [3] All the above stats prove that Canadas economy is in great shape. References Canadas Economic Outlook and Policy Framework - Presentation . (n.d.). Department of

Finance Canada * Ministre des Finances Canada. Retrieved December 1, 2011, from http://www.fin.gc.ca/activty/pubs/epfrmwrk08_-eng.asp Howard, D. (n.d.). The Canadian Monetary System. Home Page. Retrieved December 1, 2011, from http://wfhummel.net/canadiansystem.html TradingEconomics.com., & Canada, S. (n.d.). Canada Inflation Rate. TradingEconomics.com Economic Data for 196 Countries. Retrieved December 1, 2011, from http://www.tradingeconomics.com/canada/inflation-cpi