Question

​​​​​​​For the country of Canada,

1. How would you classify the nation’s political, economic, and legal systems?
2. Is government heavily involved in the nation’s economy?
3. Is the legal system effective and impartial?

Answer 1

Economic

The Canadian economy is estimated to have grown by 1.6% in 2019, after a 2% increase the previous year (IMF). The reasons of this slowdown have to be found in the continuation of tariffs on metals exports to the U.S. and to the overall global trade feud, coupled with the effect of very low oil prices late in 2018. According to the updated IMF forecasts from 14th April 2020, due to the outbreak of the COVID-19, GDP growth is expected to fall to -6.2% in 2020 and pick up to 4.2% in 2021, subject to the post-pandemic global economic recovery.

Canada’s debt to GDP ratio has been estimated at 87.5% in 2019 (down from 89.79 in 2018), and is expected to further decrease to 85% in 2020 (IMF). According to figures from the federal finance department, Canada ended the 2018-2019 fiscal year with USD 10.56 billion budget deficit, slightly lower than originally planned. Revenues increased by 6.7% from the previous year, mainly driven by income tax revenues. The economy has been supported by the recovery in oil prices, the U.S. lift of the metals tariffs in May and the return of stability to the housing market; however, fluctuations in the commodity prices, fears of a hard Brexit and the lingering trade disputes between China and the US still represent potential threats. The latter, in particular, are Canada’s main trading partner (accounting for three-quarters of Canada’s exports and half of its imports): in 2018 Trudeau’s government signed an agreement with the US and Mexico for a revised version of the NAFTA (the so-called CUSMA, Canada-United States-Mexico Agreement), but its ratification is facing some opposition in the US Congress and in Canada. In this context, business investments have gone down by 4.5% year-on-year. Inflation was estimated at 1.9% in 2019 (which is the Bank of Canada’s ideal target). Lower gasoline prices, costs for internet access services, tuition fees and telephone services helped moderate the inflation while mortgage interest, vehicle insurance and auto purchases pushed it up. The inflation trend should decrease to 0.6% in 2020 and increase to 1.3% in 2021, according to the latest World Economic Outlook of the IMF (April 2020).

The labour market is currently very strong, with the unemployment rate that touched a record low of 5.4% in May 2019, before going up to 5.7%. Wages have been growing by 3.7% year-on-year, compared to an average of 2.3% since the recession. Nevertheless, this low figures could also be put down to fewer Canadians engaging with labour markets, and not only with job creation. However, the IMF expects the unemployment rate to be affected by the negative economic impact of the COVID-19 pandemic, the rate being currently estimated to increase to 7.5% in 2020 and decrease slightly to 7.2% in 2021.

Political

November 2018 Trudeau’s government signed an agreement with the US and Mexico for a revised version of the NAFTA (the so-called CUSMA, Canada-United States-Mexico Agreement; or USMCA), however its ratification is facing some opposition in the US Congress. Federal elections were held in October 2019 to elect members of the House of Commons. The Liberal Party of incumbent Prime Minister Justin Trudeau lost the majority and only won 157 seats (13 short of a majority; 20 less than the previous 2015 elections) and had to form a minority government. The Conservatives, led by Andrew Scheer, won 121 seats and remained the Official Opposition, while the Bloc Québécois won 32 seats becoming the third party. The new cabinet was sworn in on November 20, 2019, after Trudeau rejected a coalition in favour of a minority government.

Main Political Parties

Historically, the Canadian two-party plus system has been dominated by the centre-left Liberal Party and the centre-right Conservative Party. Since the 1980s or so Canada’s dominant third-place party has been the further-left NDP. There is also a consistently fourth-place party known as the Bloc Quebecois which is devoted to Quebec separatism.
- Conservative Party of Canada (CPC): centre-right to right-wing; colloquially known as the 'Tories'
- New Democratic Party (NDP): centre-left, socialist
- Liberal Party of Canada (PLC): centrist party
- Bloc Québécois: centre-left, social-democratic
- Green Party of Canada (GPC): centre-left, ecologist party

Political

Canada is a nation governed by laws, and the Canadian legal system is the means through which those laws are written, organized, enforced, and interpreted.

Influence

Yes. Canadian government has a great influence on their economy. They have a significant role in taking decision regarding the economic situations. The Canadian economy has historically been based around trading natural resources, but is now dominated by the "service" sector. Though Canada has a generally free-market economy, the government still plays a large role in regulating and subsidizing many industries and financial sector of the economy.

Legal system effectiveness

Canada has a mixed legal system. Across all provinces and territories, public law (such as criminal law and administrative law) is based on the British common law tradition, with distinct Canadian characteristics. Private law (such as property law and contract law) is also based on the common law tradition in all provinces except Quebec, where it is based on a distinct civil law tradition. Canada has a very good and well implemented legal system to support citizens in their country.

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