Canada's economy is experiencing a slowdown, with limited growth anticipated in the coming quarters. Consumer spending has weakened, particularly among heavily mortgaged individuals, and the labor market is cooling, with wage growth expected to decelerate. Housing affordability and availability remain pressing concerns, prompting the government to take action [4212111].
In addition to domestic factors, foreign control also plays a significant role in shaping Canada's economy. According to a report by Statistics Canada, the share of assets owned by foreign-controlled enterprises in Canada decreased from 15.1% to 14.9% between 2020 and 2021. This amounts to $2.4 trillion out of a combined $15.9 trillion controlled by both Canadian and foreign entities. The United States accounts for the largest share of foreign-controlled assets in Canada at 52.3%, followed by Asia at just under 15%. Japan and China control 7% and less than 4% of foreign-controlled assets in Canada, respectively. The financial sector has seen a steady decline in foreign-controlled assets, reaching a 12-year low of 8.7% in 2021. In contrast, the non-financial sector has maintained a steady percentage of foreign-based companies at 23.5%. The wholesale trade industry has the highest concentration of foreign-controlled assets at 48.2%, followed by manufacturing at 44.3%, oil and gas at 40%, and mining at 30%. Highly regulated industries in Canada are predominantly Canadian-controlled, resulting in foreign-controlled assets representing less than 10% of the total. The United States, United Kingdom, and Japan are the top three countries with the highest control of assets in the financial sector in Canada [4212111].
Despite the challenges, the Canadian government is committed to supporting its citizens and ensuring the country remains competitive. Measures like the Affordable Housing and Groceries Act have been introduced to address housing affordability and make life more affordable for Canadians. Efforts have also been made to strengthen the social safety net while maintaining responsible fiscal management [4212111].
China has become the world's largest mining producer and financier, while Canada has fallen in the global rankings. Chinese firms are taking advantage of their leadership position to invest in Canadian mining operations. The Canadian government implemented the Investment Canada Act (ICA) to review and reject foreign investments, but China has made significant investments in Canadian mining despite these measures. China's dominance in the mining sector poses challenges for Canada's economic, energy, geopolitical, and security interests. China has invested heavily in mining operations globally and has links to over 100 Canadian mining companies. Canadian mining companies are accepting Chinese financing and investment due to a lack of alternatives. Canada and its allies should promote domestic investment, make the regulatory process around mining more efficient, and encourage other friendly foreign actors like the US and Australia to invest in Canadian mining [77d2c8bd].
The combination of domestic factors, foreign control, and Chinese investment in the mining industry influences the trajectory of Canada's economy. It is crucial for the government to continue implementing policies that support economic growth, address housing affordability, and maintain competitiveness in the global market. Additionally, Canada needs to bring in domestic and allied capital to reduce its economic dependence on China and mitigate the challenges posed by China's dominance in the mining sector [77d2c8bd].