Is Canada a Mixed Economy? Understanding what a mixed economy is all about will help clarify whether Canada is a mixed economy or not.
A mixed economy is one in which both the private sector and the public sector play a role in the economy. In a mixed economy, the government intervenes in the economy to some extent, but not to the extent that it does in a command economy.
A mixed economy is in between a command economy and a free market economy; it has a mixture of socialist characteristics and capitalism. The extent to which socialism and capitalism are practiced in a mixed economy depends on the economic goals that the government wants to achieve. Some mixed economies may have more of socialism than capitalism whereas others may decide to practice more of capitalism and less of socialism. Whatever a country decides, a mixture of socialist features coexisting with capitalist features qualifies a country as having a mixed economy. So is Canada a mixed economy?
Is Canada a Mixed Economy?
Canada is a mixed economy example because the government intervenes in many ways to regulate the economy in order to maintain economic stability and prevent market failure; while regulating the economy, the private individuals are free to own businesses, property, and other factors of production. Canada as a mixed economy allows private businesses to determine what to produce, how much to produce, who to employ, and how much to sell their products or services.
Reasons why Canada is a mixed economy
- The government owns some businesses
- Private individuals can own property and businesses
- The Canadian government regulates and intervenes in the economy
The government owns some businesses
The government owns some businesses in a mixed economy and the main aim of establishing these businesses is for profits as well as for the public good. This is in contrast to the goals of socialism where the aim of establishing state-owned enterprises is to ensure equal access and distribution of resources and wealth. Canada is a mixed economy in this regard because the government owns many state-owned enterprises, commonly regarded as crown corporations. Examples of these crown corporations include Canadian Broadcasting Corporation, Canada Post Corporation, Canadian Dairy Commission, etc.
In Canada’s mixed economy, these state-owned enterprises are accountable to the federal or provincial parliament; they are headed by a minister, who is in charge of conducting the affairs of the corporations. The good part of these state-owned enterprises in the mixed economy of Canada is that they enjoy greater freedom from direct political control than government departments. As of 11th May 2023; there are 47 crown corporations in Canada’s mixed economy.
Private individuals can own property and businesses
The capitalist aspect of Canada’s mixed economy allows individuals to own property such as land, houses, and businesses, and there is no restriction as to what to produce, the amount to produce, and the price to sell your products. This gives businesses the opportunity to compete with one another thereby driving innovations and quality products and services for the good of the consumers.
There are some government regulations and interventions
The Canadian government intervenes in the economy in various ways, such as through taxation, regulation, and social welfare programs. While these interventions are not as extensive as those seen in command economies, they are significant enough to classify Canada as a mixed economy.
For example, in order to ensure the safety of lives, the government of Canada regulates the food and pharmaceutical industries; this ensures consumers are protected so as to stop unsafe products from reaching the market. This is guided by Canada’s Food and Drug Act and Regulations.
For social interventions, the government provides free healthcare as well as social security retirement benefits to retired workers. These interventions are features of socialism; since Canada combines these socialist features with capitalist features, it makes it a mixed economy.
Last Updated on November 3, 2023 by Nansel Nanzip Bongdap
Nansel is a serial entrepreneur and financial expert with 7+ years as a business analyst. He has a liking for marketing which he regards as an important part of business success.
He lives in Plateau State, Nigeria with his wife, Joyce, and daughter, Anael.
