Pestle analysis of Canada. Canada is the 2nd world’s largest country neighboring to the USA and located in the north of North America. Ottawa is the capital of Canada. She shares the 8891 Km of land border with the US.
The native indigenous people populated Canada thousands of years ago, then Western explorers and colonists, most French and British, arrived in the sixteenth century. Some of the colonies in North America were under the control of France and she gave it up in 1763. In 1867, three of the British colonies united with the former French colonies and became the dominion of Canada. She became a fully sovereign and independent country in 1982 with her constitution Canadian Act 1982.
Today, we’ll discuss the pestle analysis of Canada. Here we’ll study the macro-environmental factors that impact the second largest country in the world. If you want to learn her internal factors, check out the swot analysis of Canada. Here’s the pestle analysis of Canada as follows;
Political factors Impacting Canada
Government & Administration System
Canada has a parliamentary democracy and constitutional monarchy as the system of government. The prime minister is the head of the cabinet and government along with the monarch, Queen Elizabeth II as the head of the state. The monarch has governors-general to perform various royal duties under in the country.
Canada is a technologically and economically powerful country and one of the founding members of the UN. She has maintained very good political and diplomatic relations with the USA, UK, France, China, and many other countries of the world. It’s been good mostly except for the recent conflict with China and the Trump administration.
The smooth diplomatic relationships help any country to develop cheap trade and economy with less taxation and control.
Stable Political Environment
Canada is one of the world’s safest countries with a stable political environment. The crime rate in the country is very low. It has helped her to attract tourists from across the world. She has maintained a peaceful image in international politics.
Leadership of Trudeau
Justine Trudeau has been the prime minister of Canada and leader of the country’s liberal party since 2015 and 2013. He has taken very good steps like Cannabis Act, federal carbon tax, Independent Advisory Board for Senate Appointment, and Paris Agreement on climate/environmental change.
Economical factors affecting Canada
Canada falls under the category of the ten most powerful economies of the world. She has also been a member of the world’s most powerful organizations like the Commonwealth of Nations, G20, WTO (World Trade Organization), and OECD (Organization for Economic Co-operation and Development).
Canada has also established free trade agreements and deals with different countries and regions of the world. She established the NAFTA (North American Free Trade Agreement) with neighboring countries like Mexico and the USA in 1994 for trilateral trade block. She has also recently signed a CETA (Comprehensive Economic and Trade Agreement) deal with the European Union in 2017. The purpose of CETA is to facilitate people and businesses in the EU and Canada.
Canada is following the mixed economic system, where the government and the private businesses both make a contribution to the economy. The government owns and controls some of the business and they call it SOEs (state own enterprises). Private businesses own and operate the rest of the ventures.
According to an estimate, she owned approximately businesses both at the federal and provincial level of 40 and 100 enterprises respectively. They’re in different categories like transportation, utilities, electricity, power, and finance.
Canada’s annual GDP in 2020 was 1590.00 billion dollars and its 16th world’s highest. Many factors contribute to the country’s economy. Like the banking system, the advanced infrastructure, diverse and entrepreneurial mindset of the people, and a strong economy. They all attract the attention of world-class businesses and top investors.
Pandemic of Covid-19
The pandemic of covid-19, lockdown, the shutdown of business, and social distancing has very badly impacted the Canadian economy. The unemployment rate has increased by 13.5% in 2020 and it’s the highest rate in the modern country’s history.
Exports & Imports
Canada’s major exports are crude petroleum, industrial machinery, telecommunication equipment, spare parts, gold, cars, and motor vehicles. Some of her major imports are delivery trucks, computers, laptops, vehicle parts, spare parts of automobiles, and cars. The UK, Germany, Japan, China, Mexico, and the USA are some of her leading trade partners.
Social factors affecting Canada
In terms of size and area, Canada is the world’s second-largest country with an area of 3.85 million square miles. Roundabout more than 38,008,005 people are living in the country. Her population has been increasing for the past few years. If you compare the country’s total size with the population rate, then her population is low. That’s why her per-capita income is very high.
Diversity & Workforce
Canada has a diverse range of the population. People from across the world with different backgrounds, cultures, ethnicities, and religions are living here. The country has limited numbers of skilled workforce and this shortage is a major hurdle in her way toward growth and progress. She gradually increases the immigration rate, so that she would immigrate to the most talented people.
French and English are the two official languages of the country with equal legal status. According to an estimate, approximately 46% of the 15 years old demographic would have foreign parents by the end of 2031. The country has roundabout more than 200 different spoken languages. People have the freedom to follow whatever religion they believe in without any restrictions.
High Living Standards
Canada has a very high living standard and her people are confident about the country’s economy and the job market. The Canadian consumer market demand quality products and services.
Some critics say that economic inequality is increasing in the country. For instance, approximately 10% of her richest people have 40% wealth of the country. Her 100 wealthiest people control the assets worth 230 billion dollars.
Technological factors Impacting Canada
The usage and application of technology and the internet have been increasing in Canada. People use the internet and tech devices for leisure, work, tech career, and educational purposes. According to an estimate by Statista, more than 33 million people are using the internet. Mostly the tech-savvy population is from Ontario, British Colombia, and Alberta. Bell and Roger are two major internet providing companies.
IT Business Sector
The trend of investment in the IT and tech industry is increasing. Her stable political and economical environment is amplifying the growth in the tech industry. That’s why many young tech entrepreneurs and professionals are and planning to move their business there. Most importantly, the tech environment is changing the landscape and function of different businesses. It’s also creating opportunities for many other people.
Legal factors affecting Canada
Laws & Regulations
Canada has a plethora of laws of regulation for the public, small businesses, and companies. They protect the rights of ordinary employees and workers. They deal with issues like working hours, minimum wage laws, vacation leaves, and sick days. CHRA (Canadian Human Rights Act) stops discrimination of any kind.
Environmental factors Impacting Canada
Tourism Industry & Climate
Canada’s landscape and natural beauty attract the attention of millions of tourists from across the world and promote her tourism industry. Some of the prominent tourist locations are Niagara Falls, Banff National Park, and Rocky Mountain, Victoria’s Inner Harbour, Vancouver Island, Whistler, Toronto’s CN Tower, and Gros Morne National Park.
The economic, population and tech growth is causing some of the environmental challenges. Like smog, acid rain, air pollution, and many other environmental issues. Canada has taken a number of appreciating steps to deal with environmental challenges. For instance, Justin Trudeau has started the plan of decreasing the carbon rate to zero percent by 2050.
After an in-depth study of the pestle analysis of Canada, we’ve realized that Canada has a very strong position in the global market. The country should mitigate environmental pollution and carbon emission rate. She should also be ready for the upcoming challenges of the post-pandemic world.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.