Population 37.5 million
GDP 46,272 US$
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major macro economic indicators

  2018 2019 2020 (e) 2021 (f)
GDP growth (%) 2.4 1.9 -5.7 3.7
Inflation (yearly average, %) 2.3 1.9 0.7 1.6
Budget balance (% GDP)* -0.6 -1.8 -17.7 -6.0
Current account balance (% GDP) -2.3 -2.1 -1.9 -2.2
Public debt (% GDP) 89.5 88.4 110.7 115.0

(e): Estimate (f): Forecast *Fiscal year from April 1 to March 30 - 2021 Data: FY 2021/22


  • Abundant and diversified energy and mineral resources
  • Fifth-largest oil and gas producer in the world
  • Strong, well-capitalised and well-supervised banking sector
  • Fiscal rigour
  • Immediate proximity to the large U.S. market
  • Development of trade relations (CETA with the EU)
  • Excellent business environment


  • Dependent on the U.S. economy (1/2 of FDI stock, integration of the two countries’ automotive industries) and energy prices
  • Loss of competitiveness in manufacturing companies due to low labour productivity
  • Insufficient R&D expenditure
  • Decrease in the share of the working population, only just slowed down by high selective immigration
  • High household debt (158% of disposable income in mid-2020)
  • Rapid growth in property prices
  • Energy exports weakened by inadequate supply pipelines to the coasts and the United States, and by the U.S.’s own resources


After the crisis, a gradual rebound

After suffering its sharpest contraction on record in 2020 because of the COVID-19 pandemic, Canadian growth is expected to bounce back in 2021. Pent-up demand in 2020 owing to restrictions to limit the spread of the disease is expected to make household consumption (almost 60% of GDP) the main driver of the rebound. Household confidence is expected to improve, particularly if a vaccine is rapidly deployed, and incomes should be lifted by the decline in the unemployment rate from its peak in April 2020 (13.7%) and by budgetary support measures to respond to the crisis. Nevertheless, the retail and clothing sectors, whose difficulties have been exacerbated by the crisis, are expected to continue to see numerous bankruptcies. While the government should gradually withdraw support measures, public consumption should still fuel growth in 2021. Exports will benefit from the combined effect of improved economic conditions in the United States and higher oil prices. Nevertheless, prices will still be relatively low and this, combined with a lack of transport capacity, will mean that the energy sector continues to underperform. In this regard, uncertainties surrounding the completion of oil pipeline projects remain, as demonstrated by the U.S. President Joe Biden's decision to cancel the permit for the Keystone pipeline on his first day in office. The oil sector is expected to be a drag on the rebound in corporate investment, which will, moreover, be constrained by increased balance sheet vulnerability in the wake of the crisis. Conversely, low mortgage rates, with the central bank expected to keep its policy rate at a record low 0.25% in 2021 (-150 basis points in 2020), and property demand will support residential investment. A wave of personal bankruptcies was avoided in 2020 thanks to government support and payment deferrals, but vulnerabilities associated with household debt will continue to be monitored.


The recovery plan will maintain a large budget deficit

In the aftermath of the COVID-19 pandemic, the unprecedented support measures taken by the government in response to its impact, coupled with the revenue decline, resulted in a record budget deficit. In fiscal year 2021/22, the deficit is expected to narrow significantly, benefiting from an increase in revenues associated with the rebound in activity and a reduction in expenditure as temporary support measures expire. Employment Insurance (EI) benefits are set to decline, while the Recovery Benefit (for those ineligible for EI) and Emergency Wage Subsidy (to allow employers to partially cover employee wages) programmes are set to expire in 2021. Although shrinking, the deficit is expected to remain high, with the government pledging between CAD 70 and 100 billion (between 3 and 4% of GDP) of spending over three years to stimulate the recovery, with details provided in the next budget. The fiscal situations of the provinces and territories, starting with Quebec and Ontario, also deteriorated because of the crisis and contributed to the jump in public debt in 2020. However, after deducting, among other things, assets held by the Canada and Quebec Pension Plans, net public debt remains relatively low (45% of GDP).

In 2021, the current account deficit is projected to widen slightly, driven by the balance of goods deficit. Higher imports, in line with the recovery in domestic demand, will be the major reason for this. In addition, payments for travel and transport services are expected to increase gradually, fuelling the services deficit. After recording a small surplus in 2020 due to accelerated repatriation of FDI profit dividends, the income account could return to a small deficit in 2021. The transfer deficit is expected to continue to make a relatively minor contribution to the current account deficit. The country is heavily dependent on foreign portfolio investment to finance its deficit. External borrowing may also be necessary. This would add to the already substantial external debt (129% of GDP by mid-2020), most of which is owed by the private sector (about 80% of the total).


Federal elections in 2021?

Justin Trudeau, who has been prime minister since November 2015, held onto his job following the October 2019 federal election, but had to form a minority government after his Liberal Party lost 20 seats and the majority (157 of 338). The Conservative Party, which gained 26 seats, remains the main opposition, while the Bloc Québécois became the third largest party in the House of Commons after winning 32 seats, a 22-seat increase. In 2020, the government’s handling of the COVID-19 crisis boosted the popularity of the prime minister and his party in the polls. This resurgence, which might enable the Liberals to regain a majority in the event of early elections, continued despite a scandal involving the prime minister over the award of a government contract to WE Charity and the appointment of Erin O'Toole as the new leader of the Conservative opposition. If popularity keeps improving, the government could call a snap election in 2021, as no minority government has ever been able to serve a full term. While strained during Donald Trump’s tenure, relations with the United States may warm up following the election of Joe Biden, but differences will remain over trade and energy policy. Moreover, relations with China remain tense since Canada arrested a senior executive of the Chinese company Huawei in 2018.


Last updated: March 2021


A single law governs bills of exchange, promissory notes and cheques throughout Canada; however this law is frequently interpreted according to common law precedents in the nine provinces or according to the Civil Code in Quebec. As such, sellers are well advised to accept such payment methods unless where long-term commercial relations, based on mutual trust, have been established with buyers.

Centralised accounts, which greatly simplify the settlement process by centralising settlement procedures between locally based buyers and sellers, are also used within Canada.

SWIFT bank transfers are the most commonly used payment method for international transactions. The majority of Canadian banks are connected to the SWIFT network, offering a rapid, reliable and cost-effective means of payment, notwithstanding the fact that payment is dependent upon the client’s good faith insofar as only the issuer takes the decision to order payment.

The Large Value Transfer System (LVTS) –introduced by the Canadian Payments Association in February 1999 – is a real time electronic fund transfer system that facilitates electronic transfers of Canadian dollars countrywide and can also handle the Canadian portion of international operations.

The letter of credit (L/C) is also frequently used.

Debt Collection

Canada’s Constitution Act of 1867, amended in April 1982, divides judicial authority between the federal and provincial Governments. Therefore, each province is responsible for administering justice, organizing provincial courts and enacting the civil procedure rules applicable in its territory. Though the names of courts vary between provinces, the same legal system applies throughout the country, bar Quebec.

Within each province, provincial courts hear most disputes of all kinds concerning small claims, and superior courts hear large claims – for example, the Quebec superior court hears civil and commercial disputes exceeding CAD 70,000 and jury trials of criminal cases. Canadian superior courts comprise two distinct divisions: a court of first instance and a court of appeal.

At federal level, the Supreme Court of Canada, in Ottawa, and only with “leave” of the Court itself (leave is granted if the case raises an important question of law), hears appeals against decisions handed down by the provincial appeal courts, or by the Canadian Federal Court (stating in appeal division), which has special jurisdiction in matters concerning maritime law, immigration, customs and excise, intellectual property, disputes between provinces, and so on.

The collection process begins with the issuance of a final notice, or “seven day letter”, reminding the debtor of his obligation to pay together with any contractually agreed interest penalties.

Ordinary proceedings

Ordinary legal action – even if the vocabulary used to describe it may vary within the country – proceeds in three phases.

Firstly, the “writ of summons” whereby the plaintiff files his claim against the defendant with the court, then the “examination for discovery”, which outlines the claim against the defendant and takes into account the evidence to be submitted by each party to the court and, finally, the “trial proper” during which the judge hears the adverse parties and their respective witnesses, who are subject to examination and cross-examination by their respective legal counsels, to clarify the facts of the case before making a ruling.

Enforcement of a Legal Decision

In most cases, except when the judge decides otherwise, each party is required to bear the full cost of the fees of his own attorney whatever the outcome of the proceedings. As for court costs, the rule stipulates that the winning party may demand payment by the losing party based on a statement of expenses duly approved by the court clerk.

The change precisely concerns institution of a standard “originating petition” (requête introductive d’instance), with the payment of judicial costs joined, introducing a 180-day time limit by which the proceedings must be scheduled for “investigation and hearings” (pour enquête et audition), delivery of a judgement on the content within a timeframe of six months after the case was heard and encouragement of the parties to submit to a conciliation stage during legal proceedings, with the judge presiding over an “amicable settlement conference” (conférence de règlement à l’amiable).

Insolvency Proceedings

The two primary pieces of insolvency related legislation in Canada are the Companies' Creditors Arrangement Act (the CCAA) and the Bankruptcy and Insolvency Act (the BIA). The BIA is the principal federal legislation in Canada applicable to bankruptcies and insolvencies. It governs both voluntary and involuntary bankruptcy liquidations as well as debtor reorganisations. The CCAA is specialized companion legislation designed to assist larger corporations to reorganise their affairs through a debtor-in-possession process.

Payment incident index Canada