For the most current version of this Note, see Background Notes A-Z.

PROFILE

OFFICIAL NAME:
Canada

Geography
Area: 9.9 million sq. km. (3.8 million sq. mi.); second-largest country in the world.
Cities: Capital--Ottawa (pop. 1 million). Other cities--Toronto (4.5 million), Montreal (3.4 million), Vancouver (2.0 million).
Terrain: Mostly plains with mountains in the west and lowlands in the southeast.
Climate: Temperate to arctic.

People
Nationality: Noun and adjective--Canadian(s).
Population: 31.0 million.
Ethnic groups: British 28%, French 23%, other European 15%, Asian/Arab/African 6%, indigenous Amerindian 2%, mixed background 26%.
Religions: Roman Catholic 42%, Protestant 40%.
Languages: English, French.
Education: Literacy--99% of population aged 15 and over have at least a ninth-grade education.
Health: Infant mortality rate--5.1/1,000. Life expectancy--76 yrs. male, 83 yrs. female.
Work force (15 million): Trade--17%; manufacturing--15%; transportation and communications--8%; finance--6%; public administration--6%; construction--5%; agriculture--4%; forestry and mining--2%; other services--37%.

Government
Type: Confederation with parliamentary democracy.
Independence: July 1, 1867.Constitution: The amended British North America Act of 1867 patriated to Canada on April 17, 1982, Charter of Rights and Freedoms, and unwritten custom.
Branches: Executive--Queen Elizabeth II (head of state represented by a governor general), prime minister (head of government), cabinet. Legislative--bicameral parliament (301-member House of Commons, 105-seat Senate). Judicial--Supreme Court.
Political parties: Liberal Party, Canadian Alliance, Bloc Quebecois, New Democratic Party, Progressive Conservative Party.
Subdivisions: 10 provinces, 3 territories.

Economy
Nominal GDP (2000): $675.42 billion.
Real GDP growth rate (2000): 4.7%.
Nominal per capita GDP (2000): $21,788.
Natural resources: Petroleum and natural gas, hydroelectric power, metals and minerals, fish, forests, wildlife.
Agriculture: Products--wheat, livestock and meat, feed grains, oil seeds, dairy products, tobacco, fruits, vegetables.
Industry: Types--motor vehicles and parts, machinery and equipment, aircraft and components, other diversified manufacturing, fish and forest products, processed and unprocessed minerals.
Trade: Merchandise exports (1999)--$242.7 billion: motor vehicles and spare parts, lumber, wood pulp and newsprint, crude and fabricated metals, natural gas, crude petroleum, wheat. 86% of 1999 Canadian exports went to the United States. Merchandise imports (1999)--$219.9 billion: motor vehicles and parts, industrial machinery, crude petroleum, chemicals, agricultural machinery. 76% of 1998 Canadian imports came from the United States.

U.S.-CANADA RELATIONS
The bilateral relationship between the United States and Canada is perhaps the closest and most extensive in the world. It is reflected in the staggering volume of trade--over 1.4 billion a day--and people--over 200 million a year--crossing the U.S.-Canadian border. In fields ranging from environmental cooperation to free trade, the two countries have set the standard by which many other countries measure their own progress. In addition to their close bilateral ties, Canada and the U.S. also work closely through multilateral fora. Canada--a charter signatory to the United Nations and the North Atlantic Treaty Organization (NATO)--has continued to take an active role in the United Nations, including peacekeeping operations. Canada also is an active participant in discussions stemming from the Organization for Security and Cooperation in Europe (OSCE). Canada joined the Organization of American States (OAS) in 1990 and has been an active member, hosting the OAS General Assembly in Windsor in June 2000. In April 2001, Canada will hosted the third Summit of the Americas in Quebec City. Canada also seeks to expand its ties to Pacific Rim economies through membership in the Asia-Pacific Economic Cooperation forum (APEC)--of which the U.S. also is a member.

Although Canada views its relationship with the U.S. as crucial to a wide range of interests, it also occasionally pursues policies at odds with the United States. This is particularly true of Cuba, with regard to which the U.S. and Canada have pursued divergent policies for nearly 40 years, even while sharing the common goal of a peaceful democratic transition.

U.S. defense arrangements with Canada are more extensive than with any other country. The Permanent Joint Board on Defense, established in 1940, provides policy-level consultation on bilateral defense matters. The United States and Canada share NATO mutual security commitments. In addition, U.S. and Canadian military forces have cooperated since 1958 on continental air defense within the framework of the North American Aerospace Defense Command (NORAD).

The two countries also work closely to resolve transboundary environmental issues, an area of increasing importance in the bilateral relationship. A principal instrument of this cooperation is the International Joint Commission (IJC), established as part of the Boundary Waters Treaty of 1909 to resolve differences and promote international cooperation on boundary waters. The Great Lakes Water Quality Agreement of 1972 is another historic example of joint cooperation in controlling transboundary water pollution. The two governments also consult semiannually on transboundary air pollution. Under the Air Quality Agreement of 1991, both countries have made substantial progress in coordinating and implementing their acid rain control programs and signed an annex on ground level ozone in 2000.

Trade and Investment
Canada is by far the United States' largest trading partner, with more than 1.4 billion in trade a day. By comparison, in 1999 this was more than U.S. trade with all the countries of Latin America combined. U.S. exports to Canada exceed those to all members of the European Union combined. Just the two-way trade that crosses the Ambassador Bridge between Michigan and Ontario equals all U.S. exports to Japan. Canada's importance to the United States is not just a border-state phenomenon: Canada is the leading export market for 35 of 50 U.S. States.

Bilateral trade increased by about 50% between 1989, when the U.S.-Canada Free Trade Agreement (FTA) went into effect, and 1994, when the North American Free Trade Agreement (NAFTA) superseded it. Trade has since increased by 40%. NAFTA continues the FTA's moves toward reducing trade barriers and establishing agreed upon trade rules. It also resolves some long-standing bilateral irritants and liberalizes rules in several areas, including agriculture, services, energy, financial services, investment, and government procurement. NAFTA forms the largest trading area in the world, embracing the 406 million people of the three North American countries.

The largest component of U.S.-Canadian trade is in the automotive sector. Under the 1965 U.S.-Canada Automotive Agreement (Auto Pact), which provided for free trade in cars, trucks, and auto parts, two-way trade in automotive products rose from $715 million in 1964 to $104.1 billion in 1999. Auto Pact benefits are incorporated into NAFTA.

The U.S. is Canada's leading agricultural market, taking nearly one-third of all food exports. Conversely, Canada is the second-largest U.S. agricultural market (after Japan), primarily importing fresh fruits and vegetables and livestock products. Nearly two-thirds of Canada's forest products, including pulp and paper, are exported to the United States; almost 75% of Canada's total newsprint production also is exported to the U.S.

At $21 billion in 2000, U.S.-Canada trade in energy is the largest U.S. energy trading relationship in the world. The primary components of U.S. energy trade with Canada are oil, natural gas, and electricity. Canada is the United States' largest oil supplier and the fifth-largest energy producing country in the world. Canada provides about 16% of U.S. oil imports and 14% of total U.S. consumption of natural gas. The United States and Canada's national electricity grids are linked and both countries share hydropower facilities on the Western borders.

While 95% of U.S.-Canada trade flows smoothly, there are occasionally bilateral trade disputes over the remaining 5%, particularly in the agricultural and cultural fields. Usually, however, these issues are resolved through bilateral consultative forums or referral to WTO or NAFTA dispute resolution. In May 1999, the U.S. and Canadian Governments negotiated an agreement on magazines that will provide increased access for the U.S. publishing industry to the Canadian market. The United States and Canada also have resolved several major issues involving fisheries. By common agreement, the two countries submitted a Gulf of Maine boundary dispute to the International Court of Justice in 1981; both accepted the Court's October 12, 1984 ruling which demarcated the territorial sea boundary.

In 1990, the United States and Canada signed a bilateral Fisheries Enforcement Agreement, which has served to deter illegal fishing activity and reduce the risk of injury during fisheries enforcement incidents. The U.S. and Canada signed a Pacific Salmon Agreement in June 1999 that settled differences over implementation of the 1985 Pacific Salmon Treaty for the next decade.

Canada and the United States signed an aviation agreement during President Clinton's visit to Canada in February 1995, and air traffic between the two countries has increased dramatically as a result. The two countries also share in operation of the St. Lawrence Seaway, connecting the Great Lakes to the Atlantic Ocean.

The U.S. is Canada's largest foreign investor; at the end of 1999, the stock of U.S. direct investment was estimated at $116.7 billion, or about 72% of total foreign direct investment in Canada. U.S. investment is primarily in Canada's mining and smelting industries, petroleum, chemicals, the manufacture of machinery and transportation equipment, and finance.

Canada is the third-largest foreign investor in the United States. At the end of 1999, the stock of Canadian direct investment in the United States was estimated at $90.4 billion. Canadian investment in the United States--which includes investment from Canadian holding companies in the Netherlands--is concentrated in manufacturing, wholesale trade, real estate, petroleum, finance, and insurance and other services.

Principal U.S. Embassy Officials
Ambassador--Paul Cellucci
Deputy Chief of Mission--Stephen Kelly
Minister-Counselor for Political Affairs--Patrick L. Del Vecchio
Minister-Counselor for Economic Affairs--Robert Smolik
Minister-Counselor for Public Affairs--Meg Gilroy
Minister-Counselor for Commercial Affairs--Delores Harrod
Minister-Counselor for Consular Affairs--Michael Bellows

The U.S. Embassy in Canada is located at 490 Sussex Drive, Ottawa, Ontario, K1N 1G8 (tel. 613-238-5335).

GOVERNMENT
Canada is a constitutional monarchy with a federal system, a parliamentary government, and strong democratic traditions. Many of the country's legal practices are based on unwritten custom, but the federal structure resembles the U.S. system. The 1982 Charter of Rights guarantees basic rights in many areas.

Queen Elizabeth II, as Queen of Canada, serves as a symbol of the nation's unity. She appoints a governor general on the advice of the prime minister of Canada, usually for a 5-year term. The prime minister is the leader of the political party in power and is the head of the cabinet. The cabinet remains in office as long as it retains majority support in the House of Commons on major issues.

Canada's parliament consists of an elected House of Commons and an appointed Senate. Legislative power rests with the 301-member Commons, which is elected for a period not to exceed 5 years. The prime minister may ask the governor general to dissolve parliament and call new elections at any time during that period. Federal elections were last held in November 2000. Vacancies in the 104-member Senate, whose members serve until the age of 75, are filled by the governor general on the advice of the prime minister. Recent constitutional initiatives have sought unsuccessfully to strengthen the Senate by making it elective and assigning it a greater regional representational role.

Criminal law, based largely on British law, is uniform throughout the nation and is under federal jurisdiction. Civil law is also based on the common law of England, except in Quebec, which has retained its own civil code patterned after that of France. Justice is administered by federal, provincial, and municipal courts.

Each province is governed by a premier and a single, elected legislative chamber. A lieutenant-governor appointed by the governor general represents the Crown in each province.

Principal Government Officials
Head of State--Queen Elizabeth II
Governor General--Adrienne Clarkson
Prime Minister--Jean Chretien
Minister of Foreign Affairs--John Manley
Ambassador to the United States-- Michael Kergin
Ambassador to the United Nations-- Paul Heinbecker

Canada maintains an embassy in the United States at 501 Pennsylvania Avenue, NW, Washington, DC 20001 (tel. 202-682-1740).

POLITICAL CONDITIONS
Prime Minister Jean Chretien's Liberal Party won a major victory in the November 2000 general elections. Chretien became the first Prime Minister to lead three consecutive majority governments since 1945, as the Liberals increased their majority in Parliament to 57% (172 of the 301 Parliamentary seats). The Canadian Alliance Party, which did well in western Canada but was unable to make significant inroads in the East, won the second-highest total of seats (66).

Federal-provincial interplay is a central feature of Canadian politics: Quebec wishes to preserve and strengthen its distinctive nature; western provinces desire more control over their abundant natural resources, especially energy reserves; industrialized central Canada is concerned with economic development; and the Atlantic provinces have resisted federal claims to fishing and mineral rights off their shores.

The Chretien government has responded to these different regional needs by seeking to rebalance the Canadian confederation, giving up its spending power in areas of provincial jurisdiction, while attempting to strengthen the federal role in other areas. The federal government has reached agreement with a number of provinces returning to them authority over job training programs and is embarked on similar initiatives in other fields. Meanwhile, it has attempted to strengthen the national role on interprovincial trade, while also seeking national regulation of securities.

National Unity
Key to the national unity debate is the ongoing issue of Quebec separatism. Following the failure of two constitutional initiatives in the past 14 years, Canada is still seeking a constitutional settlement that will satisfy the aspirations of the French-speaking province of Quebec. The issue has been a fixture in Canadian history, dating back to the 18th century rivalry between France and Britain. For more than a century, Canada was a French colony. Although New France came under British control in 1759, it was permitted to retain its religious and civil code.

The early 1960s brought a Quiet Revolution to Quebec, leading to a new assertiveness and heightened sense of identity among the French-speaking Quebecois, who make up about one-quarter of Canada's population. In 1976, the separatist Parti Quebecois won the provincial election and began to explore a course for Quebec of greater independence from the rest of Canada.

In a 1980 referendum, the Parti Quebecois sought a mandate from the people of Quebec to negotiate a new status of sovereignty-association, combining political independence with a continued economic association with the rest of Canada. Sixty percent of Quebec voters rejected the proposal. Subsequently, an agreement between the federal government and all provincial governments except Quebec, led to Canada in 1982 assuming from the United Kingdom full responsibility for its own constitution. Quebec objected to certain aspects of the new arrangement, including a constitutional amending formula that did not require consensus among all provinces. The 1987 Meech Lake Accord sought to address Quebec's concerns and bring it back into Canada's constitutional fold. Quebec's provincial government, then controlled by federalists, strongly endorsed the accord, but lack of support in Newfoundland and Manitoba prevented it from taking effect. Rejected in its bid for special constitutional recognition, Quebec's provincial government authorized a second sovereignty referendum.

Intense negotiations among Quebec, the federal government, and other provinces led to a second proposed constitutional accord in 1992--the Charlottetown Accord. Despite near-unanimous support from the country's political leaders, this second effort at constitutional reform was defeated in Quebec and the rest of Canada in an October 1992 nationwide referendum.

Tired of the country's constitutional deadlock, many Canadians prefer to focus on economic issues. Nonetheless, the election of the sovereigntist Bloc Quebecois as Canada's official opposition in 1993 and the subsequent election of the separatist Parti Quebecois as Quebec's provincial government in September 1994 kept national unity in the forefront of political debate and resulted in a second referendum on the issue.

This referendum, held in Quebec on October 30, 1995, resulted in a narrow 50.56% to 49.44% victory for federalists over sovereigntists. Quebec's status thus remains a serious political issue in Canada.

In December 1999, the Chretien administration introduced the so-called "Clarity Bill", setting out the federal role in any future referendum on Quebec's status. Both houses of Parliament subsequently approved the legislation.

Bernard Landry, who succeeded Lucien Bouchard as Premier of Quebec in March 2001, pledged to promote independence for Quebec.

[This is a mobile copy of Canada (06/01)]