• As a major oil- exporter, Canada was hit hard by low oil prices, with GDP growth slowing down and the Canadian dollar losing about a third of its value.
• In 2016, the EPI projects Canada to have a performance score of 90.4%, or a B- grade.

Canada economic performance

The energy sector contributes significantly to Canada’s economy, with the oil, gas and mining sector accounting for more than one quarter of the value of the country’s GDP. Valued at $259 billion in 2014, natural resources account for more than half of Canada’s merchandise exports. The US (78%), the UK (5%) and China (4%) are the three main destinations of all natural resources exports. The US is the destination of 97% of energy exports, 66% of forest products exports and 52% of minerals and metals exports.
GDP growth slowed from 2.5% in 2014 to 1.2% in 2015 and is projected to be 1.5% in 2016, mainly because of a large investment drop in the energy industries. Still, Canada’s economic fundamentals remain strong, with the country’s strong commitment to an open- market. The newly elected government is likely to use fiscal stimulus to decrease the pain of the oil shock. But the budget deficit is still projected to remain close to 2.4% in 2016. Unemployment is projected to be 7.3% and inflation to be low at 1.3% in 2016.
The 5-Minute Economist projects Canada’s EPI score to stay at a B level by 2021, with gradually increasing inflation compensated by improved GDP growth.