you have been hired as a consultant for a global renewable e

you have been hired as a consultant for a global renewable energy company RenewEnerg, headquartered in Sweden, which believes there is potential for an outright purchase of a large wind turbine manufacturing company in Canada. Because of your knowledge of Canada, you have been asked to provide a report on the Canadian business environment that would include overviews of Canada’s economic system and the role of government in conducting business in Canada. In addition to the overview, it should specifically outline how these compare to Sweden. The report will serve to inform the company’s decision to invest in the country, so should be insightful and provide detailed references.

Solution

For Canadian economy 2016 was a year full of ups and downs which provided evidences ensuring that 2017 will be a better economic year than 2016.

After august 2016, 2,00,000 jobs were added, out of which more than 50000 jobs were added solely in December. As compared to the full-time jobs, addition of part time jobs was more. According to an economist it’s time for the economy to drop the notion that part-time jobs are undesirable.

Economy of Canada is essentially connected with the price of oil which is a huge reason for 2015 and 2016 being such a bumpy ride for the economy. In early 2014, a barrel of oil was more than $100 and in 2016 it dropped down to $30 a barrel. This wiped out billions of dollars from the stock market.

But since the last fall, price of crude has remained steady, although slow. In December 2016 the price increased by $10 a barrel. Reason behind this increase is that the cartel of byzantine oil known as OPEC slipped back with a promise to initiate turning off the stoppers for prices to return to a level at which OPEC members are more relaxed.

Since October 2016, Saudi Arabia has been investing 486000 barrels per day. More and more foreign countries are following the same with Saudi Arabia. Although there is ongoing competition for market share between OPEC countries and the Canadian oil companies. Canadian oil companies are the unaware recipients of their competitor’s act.

If the strategy of OPEC countries works out, then the coming years would be much profitable in terms of oil prices and for the economy of Canada.

It is not tough to come up with the reasons which explains that why the Canadian dollar could be in a difficult position in the coming period.

According to the experts the Canadian dollar may decline to as low as U.S. 70 cents in the coming period. Whereas Macquarie forecasts that Canadian dollar can drop up to U.S. 65 cents. There are also predictions that these above forecasts are far too miserable.

Mortgage rates increases as Trump has taken his position. According to a chief economist, gloom and doom around the loonie is mistaken as the economy of Canada has remained the center of the storm and is composed to grow. Last year, loonie was one of the best performing currencies globally, believe it or not, crushing the franc, the yen, the pound and the euro.

The beginning of 2017 was difficult for loonie but as expected the trend slowed down in the latter part of the year, expecting that the Canadian dollar will end as even higher at the end of 2017, soaring around 75 %.

The positive effects were felt by the economy through the fast-worldwide growth and the declining dangers of trading with United States i.e. the tension of tearing down of NAFTA.

There is sufficient proof that winds of trade are also blowing. For the first time in 2 years in November 2016, Canada experienced a trade surplus as the country exported $1139 million more than the amount it imported.

Everything from potash to energy products, canola and aerospace products are booming leading to a motivating signal of extensive and diverse strength.

In the Canadian markets, TSX index came a few points less than its all time high record of 15685 points in January 2017. DOW jones industrial Average 20000 is the representation of animal spirits. According to the economic indicators TSX index is far from being perfect. But a record high TSX index performance is a sort of thing which draws attention.

In October 2017, in Canada 35300 jobs were added but still the rate of unemployment crept high as it rose to 6.3 % from 6.2 % in September 2017. The category of other services became a leading reason for the growth in employment with an increase of 21400 jobs whereas 18400 jobs were added by the construction industry and 15300 jobs were added by the culture, information and recreational industries.

The gains of increasing employment were offset by the declining jobs in retail trade and wholesale sector by a loss of 35900 jobs.

Economic growth is either a result of growth in labor supply or its productivity i.e. growth in real output/ hour worked. Participation of the labor force has started declining due to aging population and this reduction in available labor supply is expected to continue i.e. the total number of hours worked by Canadians is reducing.

According to the baseline assumption for labor force productivity and participation, the rise in the growth of aging population will negatively affect economic growth in the coming decades. The deceleration in Canadian economic growth due to the age factor will take place among other prevailing, gradually moving global forces.