https://www.sec.gov/Archives/edgar/data/230098/000113031902001603/m08476e18vk.htm?fbclid=IwAR0Y1U-RNQ9gt928BZ_hLkyD4L4ALQp_i3R-tyYuI0j1QHXDdaDwDt6fwJc

FORM 18-K

For Foreign Governments and Political Subdivisions Thereof

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

ANNUAL REPORT

CANADA

(Name of Registrant)

Date of end of last fiscal year: March 31, 2002

SECURITIES REGISTERED*

(As of the close of the fiscal year)





Time of Issue	Amounts as to which registration Is effective	Name of exchange on which registered

N/A	N/A	N/A

Name and address of person authorized to receive notices

and communications from the Securities and Exchange Commission:

HIS EXCELLENCY MICHAEL KERGIN

Canadian Ambassador to the United States of America

Canadian Embassy

501 Pennsylvania Avenue, N.W.

Washington, D.C. 20001

Copies to:


BILL MITCHELL Director Financial Markets Division Department of Finance, Canada 20th Floor, East Tower L’Esplanade Laurier 140 O’Connor Street Ottawa, Ontario K1A 0G5		DAVID MURCHISON Consul Consulate General of Canada 1251 Avenue of the Americas New York, N.Y. 10020		ROBERT W. MULLEN, JR. Milbank, Tweed, Hadley & McCloy LLP 1 Chase Manhattan Plaza New York, N.Y. 10005

* The Registrant is filing this annual report on a voluntary basis.

The judicial branch of government in Canada is composed of an integrated set of courts created by federal and provincial law. At the federal level there are two principal courts, the Supreme Court of Canada which is the highest appeal court in Canada and the Federal Court of Canada which, among other things, deals with federal revenue laws and claims involving the Government. Judges of the two federally constituted courts and those of the provincial superior and county courts are appointed by the Governor General on the advice of the federal Cabinet and hold office during good behavior until age 70 or 75. Judges of the magistrates courts (commonly now known as provincial courts) are appointed by the provincial government and usually hold office until age 65 or 70.

Constitutional Reform

In April 1982, Her Majesty the Queen proclaimed the Constitution Act, 1982, terminating British legislative jurisdiction over Canada’s Constitution. The Constitution Act, 1982 provides that Canada’s Constitution may be amended pursuant to an amending formula contained therein and contains the Canadian Charter of Rights and Freedoms, including the linguistic rights of Canada’s two major language groups.

The government of Québec did not sign the constitutional agreement which led to the repatriation of the Canadian Constitution and the proclamation of the Constitution Act, 1982. Although Québec is legally bound by the Constitution Act, 1982, the government of Québec set out five conditions for accepting the legal legitimacy of the Act. Discussions on those principles led on April 30, 1987 at Meech Lake to a unanimous agreement by First Ministers on principles respecting each of Québec’s conditions.

A constitutional resolution to give effect to the Meech Lake Accord was adopted by Parliament and eight provinces before the deadline for ratification on June 23, 1990. In the absence of ratification by Newfoundland and Manitoba, the amendment was not adopted. In the wake of this event, the most extensive series of public consultations on constitutional matters ever to occur in Canada began through the work of both provincial and federal commissions and committees, among other things. Recommendations produced by this process were then assessed by a series of multilateral negotiations involving the federal, provincial and territorial governments and four national Aboriginal organizations, held from April to July 1992. Agreement was reached on a wide range of constitutional issues through the multilateral process which led to a First Ministers’ Conference held in Charlottetown in August 1992.

The Charlottetown Accord was an extensive package of reforms agreed upon by the federal, provincial and territorial governments and the four Aboriginal organizations. On October 26, 1992 Canadians were asked in a referendum if they agreed that the Constitution of Canada should be renewed on the basis of the Charlottetown agreement. A majority of Canadians in a majority of the provinces, including a majority in Québec and a majority of Status Indians living on reserves, declined to provide such a mandate. Consequently, governments set aside the constitutional issue and announced their intention to concentrate on social and economic initiatives that do not require constitutional change.

The following chart shows the distribution of real gross domestic product (“GDP”) at basic prices (1997 constant dollars) in 2001, which is indicative of the structure of the economy.

DISTRIBUTION OF REAL GROSS DOMESTIC PRODUCT AT BASIC PRICES(1)

Percentage Distribution in 2001(2)

LOGO

Source: Statistics Canada, Gross Domestic Product by Industry.

(1) GDP is a measure of production originating within the geographic boundaries of Canada, regardless of whether factors of production are Canadian or non-resident owned, whereas gross national product (“GNP”) measures the value of Canada’s total production of goods and services — that is, the earnings of all Canadian owned factors of production. Quantitatively, GDP is obtained from GNP by adding investment income paid to non-residents and deducting investment income received from non-residents. GDP at basic prices represents the value added by each of the factors of production and is equivalent to GDP at market prices less indirect taxes (net), plus other production taxes (net). Moreover, these differences in GDP measures explain any perceived discrepancies in GDP growth rates in this document.

(2) May not add to 100.0% due to rounding.

(3) The agriculture, forestry, fishing, hunting, mining and oil and gas extraction sectors include a service component.

The volume of industry and sector output in the following discussion provides “constant dollar” measures of the contribution of each industry to GDP at basic prices. The share of service-producing industries in real GDP was 68.7% in 2001 while the remaining 31.3% was attributed to goods-producing industries.

https://www3.forbes.com/business/forbes-rich-list-2020-canadian-wealthiest-billionaires-vue/

Canada’s Richest Billionaires 2020

Kerry A. Dolan Forbes Staff

Deputy Editors: Chase Peterson-Withorn, Jennifer Wang
Country Editors: Graham Button, Grace Chung, Russell Flannery, Naazneen Karmali

The richest people on Earth are not immune to the coronavirus. As the pandemic tightened its grip on Europe and America, global equity markets imploded, tanking many fortunes. When we finalized this list, Forbes counted 2,095 billionaires, 58 fewer than a year ago and 226 fewer than just 12 days earlier, when we initially calculated these net worths. Of the billionaires who remain, 51% are poorer than they were last year. In raw terms, the world’s billionaires are worth $8 trillion, down $700 billion from 2019.

METHODOLOGY

The Forbes World’s Billionaires list is a snapshot of wealth using stock prices and exchange rates from March 18, 2020. Some people become richer or poorer within days of publication. We list individuals rather than multigenerational families who share fortunes, though we include wealth belonging to a billionaire’s spouse and children if that person is the founder of the fortune. In some cases we list siblings or couples together if the ownership breakdown among them isn’t clear, but here an estimated net worth of $1 billion per person is needed to make the cut. We value a variety of assets, including private companies, real estate, art and more. We don’t pretend to know each billionaire’s private balance sheet (though some provide it). When documentation isn’t supplied or available, we discount fortunes.

Norm Betts/Bloomberg News

#1 David Thomson & family

Net Worth: $31.6 B
Age: 62
Source: Media
Industries: Media & Entertainment

David Thomson and his family control a media and publishing empire founded by his grandfather Roy Thomson. The family’s biggest holding: more than 320 million shares of Thomson Reuters, where Thomson serves as chairman. In 2018, Thomson Reuters announced it was selling a controlling stake in Refinitiv, a financial data provider, to Blackstone for $17 billion. The family also holds a stake in telecom giant Bell Canada and own the Toronto-based Globe and Mail newspaper.

GETTY

#2 Joseph Tsai

Net Worth: $10 B
Age: 56
Source: e-commerce
Industries: Technology

He is vice chairman and cofounder of Alibaba Group, and ranks as its second-largest individual shareholder after chairman Jack Ma. In 2018, he bought 49% of the Brooklyn Nets National Basketball Association team; the following year he purchased the remaining 51%. He holds two degrees from Yale University–an undergraduate degree in economics and East Asian studies and a law degree. Taiwan-born Tsai carries a Canadian passport.

David M. Benett/Dave Benett/Getty Images for Brasserie of Light

#3 Galen Weston & family

Net Worth: $7 B
Age: 79
Source: Retail
Industries: Fashion & Retail

Galen Weston is chairman emeritus of George Weston, the Canadian food and retail giant founded by his grandfather in 1882. After successfully running grocery and retail stores in Ireland, his father handed him the reins to the struggling Loblaws supermarket chain in 1972. He turned the company around, by lopping off underperforming stores and redesigning the rest. His son, Galen Jr., now runs both George Weston Ltd. and Loblaws, which acquired Canadian drugstore chain Shoppers for about $12 billion in July 2013. Weston also owns a group of upscale retailers: Canada’s Holt Renfrew, Ireland’s Brown Thomas and UK department store Selfridges.

Forbes

#4 David Cheriton

Net Worth: $5.5 B
Age: 69
Source: Google
Industries: Technology

“Professor Billionaire” David Cheriton, who teaches at Stanford University, made his fortune thanks to an early investment in Google. Cheriton and Andreas von Bechtolsheim (also now a billionaire) each invested $100,000 in Google when it was just getting started. The pair cofounded 3 companies: Arista Networks (IPO in 2014), Granite Systems (sold to Cisco in 1996) and Kealia (sold to Sun Microsystems in 2004). Cheriton resigned from Arista’s board in March 2014 and has been unloading his stock; he still owns nearly 10% through a trust for his children.

Forbes

#5 Huang Chulong

Net Worth: $5.1 B
Age: 61
Source: Real Estate
Industries: Real Estate

Huang Chulong chairs Galaxy Group, a privately held business based in the southern Chinese city of Shenzhen. Huang’s business interests span hotels, shopping malls, office leasing, parking-lot operation and real estate development.

Forbes

#6 Mark Scheinberg

Net Worth: $4.9 B
Age: 46
Source: Online Gaming
Industries: Gambling & Casinos

Mark Scheinberg cofounded PokerStars with his father, Isai, and built it into the world’s biggest online poker company before cashing out in 2014. Scheinberg, who owned 75% of Rational Group at the time, pocketed more than $3 billion from the sale. He helped launch PokerStars in 2001, at age 28, and benefited tremendously from the poker boom that soon swept the U.S. and the rest of world. Scheinberg is investing some of the proceeds in Madrid, where he is helping restore seven historic buildings for commercial and residential use. In 2018, Scheinberg bought a stake in the Ritz-Carlton Yacht Collection from majority owner, private equity firm Oaktree Capital. He also owns the One Hotel in Toronto, Canada, which is set to open its doors in late 2020.

Forbes

#7 James Irving

Net Worth: $4.5 B
Age: 92
Source: Diversified
Industries: Diversified

James Irving owns J.D. Irving, a conglomerate with more than two dozen companies in frozen foods, retail, shipbuilding, transportation and more. His timber and forestry operation, based in New Brunswick, has planted over a billion trees since 1957. His family’s fortune dates back to the 19th century, when his grandfather left Scotland and launched a general store and lumber and farming companies. His father added to the empire with oil operations in the 1920s; upon his 1992 death the three brothers James, Arthur and John split the assets. Irving Woodlands, a division of J.D. Irving, is the sixth-largest landowner in the U.S. with 1.25 million acres of land. Jim and Robert Irving, James Irving’s sons, are co-CEOs of the J. D. Irving empire, which also includes one of Canada’s biggest shipbuilders.

Forbes

#8 Jim Pattison

Net Worth: $4.3 B
Age: 91
Source: Diversified
Industries: Diversified

Jim Pattison oversees a sprawling group that operates 25 divisions including packaging, food and entertainment. Pattison’s first business was a GM dealership he bought in 1961. The Canadian billionaire also controls more than 40% of publicly-traded forest products company Canfor. His entertainment division includes Great Wolf Lodge, Guinness World Records and the Ripley’s Believe It Or Not! chain.

MARIA LAURA ANTONELLI/ZUMA PRESS/NEWSCOM

#9 Emanuele (Lino) Saputo & family

Net Worth: $3.8 B
Age: 83
Source: Cheese
Industries: Food & Beverages

Emanuele (Lino) Saputo chaired his family’s eponymous dairy company from 1969 until his August 2017 retirement. His son, Lino Jr., who has served as president and CEO since 2004, succeeded him as chairman. The elder Saputo’s father, Giuseppe, founded the business in 1954 with $500 and a bicycle for deliveries after immigrating to Canada from Sicily. Lino grew the company in the following decades, taking it public in 1997; today its products are sold in more than 40 countries. The family also has a stake in Major League Soccer’s Montreal Impact.

Forbes

#10 Anthony von Mandl

Net Worth: $3.3 B
Source: Alcoholic Beverages
Industries: Food & Beverages

Anthony von Mandl created the ready-to-drink alcoholic beverages White Claw Hard Seltzer and Mike’s Hard Lemonade through his Mark Anthony Brands. von Mandl told Forbes his U.S. business is estimated to deliver close to $4 billion in revenue in 2020. He began his career in the Canadian wine business as an importer in the 1970s at age 22. He currently owns five wineries in Canada, including Mission Hill Winery in British Columbia’s Okanagan Valley. Through his company Mark Anthony Wine & Spirits, von Mandl is a leading figure of Canada’s alcohol importing and distribution sector.

CANADIAN PRESS

#11 (tie) Daryl Katz

Net Worth: $3.2 B
Age: 58
Source: Pharmacies
Industries: Diversified

Daryl Katz amassed a fortune in the pharmacy business, buying the Canadian rights to U.S. franchise Medicine Shoppe in 1991. A few years later he snatched up struggling Canadian drugstore chain Rexall, then expanded to the U.S. market. Katz, the son of a drug store owner, has since sold off all of his pharmacy operations, pivoting his Katz Group to real estate and entertainment. He has been co-developing a $2 billion, 25-acre complex in Edmonton’s downtown that will include offices, condos and retail, among others. Katz also owns his native city’s NHL team, the Edmonton Oilers.

GETTY IMAGES

#11 (tie) Chip Wilson

Net Worth: $3.2 B
Age: 63
Source: Lululemon
Industries: Fashion & Retail

Dennis “Chip” Wilson, the founder and former CEO of Lululemon, opened Lululemon’s first store in Vancouver in 2000. He took the firm public in 2007 but resigned as chairman in 2013 and removed himself from the business completely in 2015. In 2013, Wilson blamed Lululemon’s too-sheer pants on women’s body types, causing an uproar among fans. Although Wilson has no management role in Lululemon, he remains its biggest individual shareholder. Wilson is currently involved in Hold It All, which has businesses in apparel, real estate and private equity. His investments include stakes in Finnish sporting goods firm Amer Sports and Chinese sports apparel company Anta Sports.

Forbes

#13 Alain Bouchard

Net Worth: $3.1 B
Age: 71
Source: Retail
Industries: Fashion & Retail

Alain Bouchard cofounded convenience store conglomerate Alimentation Couche-Tard with a single Quebec shop in 1980. As executive chairman, Bouchard still oversees the $59.1 billion (sales) company, which boasts more than 14,000 owned or franchised stores worldwide. Bouchard, who grew the business rapidly by snatching up competitors, retired as president and CEO in September 2014. In 2017, Couche-Tard acquired Texas-based CST Brands for $4.4 billion (including debt) and Minnesota-based Holiday Stationstores for $1.6 billion. Couche-Tard is reportedly pursuing the Australian fuel retailer Caltex Australia and is eyeing the cannabis industry.

DAVID FITZGERALD/SPORTSFILE VIA GETTY IMAGES

#14 Tobi Lutke

Net Worth: $3 B
Age: 39
Source: e-commerce
Industries: Technology

Tobias Lutke founded and runs Shopify, the Canadian e-commerce firm that helps companies set up and run online stores. He owns 6.7% of Shopify, which went public in 2015. Businesses that use Shopify technology for online sales include Kylie Cosmetics and shoe retailers Rothy’s and Allbirds. Lutke grew up in Germany, where he learned to code by age 12 and left school at 16 to enter a computer programming apprenticeship. Shopify had over $1 billion in 2018 revenue; it has 1 million businesses as customers from 175 countries.

GETTY IMAGES

#15 Lawrence Stroll

Net Worth: $2.6 B
Age: 60
Source: Fashion Investments
Industries: Fashion & Retail

Lawrence Stroll masterminded Michael Kors’ hugely successful IPO in 2011 with business partner Silas Chou, a Hong Kong fashion tycoon. The bulk of Stroll’s fortune comes from selling his shares in the American fashion brand; he sold the last of his stake in 2014. In Aug. 2018, Stroll led a group of investors to buy Formula One racing team Force India for £90 million plus assumption of £15 million in debt. After leading a $235.6 million (£182 million) investment in car company Aston Martin in early 2020, Stroll will become executive chairman. His 20-year-old son, Lance Stroll, one of the youngest members to compete in Formula One, is joining Force India in 2019. Stroll collects vintage Ferraris, one of which he purchased for a record-breaking $27.5 million in 2013.

BOB GAGLARDI

#16 (tie) Bob Gaglardi

Net Worth: $2.5 B
Age: 79
Source: Hotels
Industries: Real Estate

Bob Gaglardi founded Northland Properties, which has interests in hotels, restaurants, sports, and construction. Gaglardi launched the business in 1963 with a $5,000 loan, opening his first Sandman Inn hotel four years later in British Columbia. He continued to put up Sandman Inns throughout Canada, plus expanded into real estate and restaurants. In 2011 he and his son, Tom, purchased the then-bankrupt Dallas Stars NHL team in a $240 million deal.

Forbes

#16 (tie) Arthur Irving

Net Worth: $2.5 B
Age: 90
Source: Oil
Industries: Energy

New Brunswick native Arthur Irving owns 100% of Irving Oil, which operates gas stations and oil refineries, through the Arthur Irving Family Trust. Arthur is a third-generation member of a Canadian dynasty. His grandfather, James Dergavel Irving, started the family business in the late 1800s. His dad Kenneth Colin (K.C) Irving added oil operations in 1920s; Arthur and his 2 brothers reportedly divided up the empire after KC’s death in 1992. Arthur’s brother James Irving, also a billionaire, took over a conglomerate that spans shipbuilding to forestry. A third Irving brother, John (known as Jack), headed the family’s construction operations and owned part of Irving Oil. He passed away in 2010. In 2018, The Arthur Irving Family Trust bought out Jack Irving family’s stake to assume 100% ownership of Irving Oil.

Forbes

#18 Jean Coutu & family

Net Worth: $2.4 B
Age: 92
Source: Drugstores
Industries: Fashion & Retail

The billionaire in the white lab coat, Jean Coutu founded the Canadian drugstore chain that bears his name. In October 2017 Coutu agreed to sell his publicly-traded company to supermarket giant Metro for $4.5 billion in cash and stock. Son of a pediatrician, he opened his first pharmacy in 1969, merging low prices on wide-ranging products with customer service and extended hours. Coutu, who was chief executive until 2002 and then again from 2005 to 2007, grew The Jean Coutu Group by acquiring many of his competitors. The company was once a leading shareholder of U.S. drug store operator Rite Aid but sold the last of its stake in 2013.

Forbes

#19 Charles Bronfman

Net Worth: $2.3 B
Age: 88
Source: Liquor
Industries: Food & Beverages

Charles Bronfman is long removed from the 2000 deal in which he and nephew Edgar Jr. sold their family’s Seagram spirits to Vivendi for $34 billion. His father Samuel Bronfman, a Russian immigrant to Canada, started a small distillery in 1924 and eventually bought out competitor Seagram. Since the sale, Charles, who once co-chaired Seagram, has turned toward philanthropy, authoring two books on the matter and signing The Giving Pledge. Bronfman has given away or pledged at least $350 million, mostly toward promotion of Canadian culture and the Jewish community’s connection to Israel. Bronfman’s son, Stephen, now runs Claridge, the Montreal-based private investment firm that Charles founded in 1987.

Forbes

#20 (tie) Mitchell Goldhar

Net Worth: $2.2 B
Age: 58
Source: Real Estate
Industries: Real Estate

Mitchell Goldhar founded real estate firm SmartCentres in the early 1990s, then developed more than 265 shopping centers in the ensuing two decades. In May 2015, he sold most of SmartCentre’s assets to SmartREIT (formerly Calloway REIT), for about $880 million in shares, cash and assumed debt. Goldhar, who chairs SmartREIT, also owns various developments across Canada through his private company Penguin Investments. This includes a stake, along with SmartREIT, in the Vaughan Metropolitan Centre, a 100-acre master planned development north of Toronto. Goldhar owns Israeli soccer team Maccabi Tel Aviv FC, which won the Israeli club league in 2019. He plays squash, tennis and hockey.

Forbes

#20 (tie) Barry Zekelman

Net Worth: $2.2 B
Age: 53
Source: Steel
Industries: Manufacturing

Barry Zekelman took over his family’s steel business at age 19 and has since grown it into one of North America’s largest steel pipe and tube makers. He sold the company to the Carlyle Group in 2006 for some $1.2 billion, but continued to help run it. He and his family bought it back in 2011. Today Barry and his two brothers, Clayton and Alan Zekelman, split 100% ownership of the $2.8 billion (revenues) firm, now named Zekelman Industries. He made headlines when he was captured on a secret recording of a 2018 Trump donor dinner, bending the president’s ear about the steel business. One of Zekelman Industries’ subsidiaries, Atlas Tube, is producing steel for the stretches of the Mexican border wall going up in Arizona.

Forbes

#22 Carlo Fidani

Net Worth: $2.1 B
Age: 65
Source: Real Estate
Industries: Real Estate

Carlo Fidani runs Orlando Corp., the Toronto-area real estate company he took over following his father’s death in 2000. The company has interests in construction and development, plus manages some 44 million square feet of industrial, office and commercial space. His grandfather founded the business as Fidani and Sons in 1948; Carlo took over in 2000 following his father’s death. Fidani was made a Member of the Order of Canada in September 2018, an honor recognizing his achievements and service to the country.

Tannis Toohey/Toronto Star via Getty Images

#23 Michael Lee-Chin

Net Worth: $2 B
Age: 69
Source: Mutual Funds
Industries: Finance & Investments

Michael Lee-Chin made a fortune investing in financial companies like National Commercial Bank Jamaica and AIC Limited. The native of Jamaica acquired AIC in 1987, when it had less than $1 million in assets under management. Under Lee-Chin, the Canada-based wealth management and mutual fund business managed more than $10 billion in assets by 2002. But the firm was hit hard by the 2008 recession, and Lee-Chin sold AIC to Canadian financial services group Manulife in 2009 for an undisclosed price. He managed to hold onto a valuable 65% stake in National Commercial Bank Jamaica, which now makes up the majority of his wealth.

#24 Bruce Flatt

Net Worth: $1.9 B
Age: 54
Source: Money Management
Industries: Finance & Investments

Bruce Flatt is one of the biggest and best investors you’ve likely never heard of. Flatt runs Brookfield Asset Management, the $540 billion (assets) alternative manager with real estate, infrastructure and private equity operations. A Winnipeg native, he joined an accounting firm out of college, then took a job at Canadian conglomerate Brascan, which soon nearly collapsed. He helped revive Brascan through a series of savvy real estate deals and became CEO in 2002, refashioning the firm into Brookfield Asset Management. His winning deals include buying Olympia & York in 1996 and London’s Canary Wharf in 2015, and recapitalizing General Growth Properties in 2010.

Forbes

#25 (tie) Peter Gilgan

Net Worth: $1.8 B
Age: 69
Source: Homebuilding
Industries: Construction & Engineering

Peter Gilgan has built houses for some 90,000 homeowners since founding Mattamy Homes in 1978. Gilgan, who grew up as one of seven children in a middle class family, worked as an accountant before going into building. Inspired by the New Urbanism movement, he set out to construct suburban dwellings that broke from the bland and impersonal developments. Mattamy (named after the two oldest of his eight children, Matt and Amy) began designing and building planned communities from the ground up in 1986. Gilgan remains CEO of the $3 billion (revenues) business.

Asbed.com/Lumisculpt

#25 (tie) Robert Miller

Net Worth: $1.8 B
Age: 74
Source: Electronics Components
Industries: Technology

Canadian Robert Miller cofounded electronics distributor Future Electronics in 1968. In 1976, he bought out his partner for $500,000; now the Quebec-based company is one of the world’s largest electronics distributors. Future Electronics has a reported $5 billion in revenues from operations in 44 countries. Its products include adapter boards for LED screens, microcontrollers and LED lighting.

JAMEL TOPPIN FOR FORBES

#25 (tie) Peter Szulczewski

Net Worth: $1.8 B
Age: 38
Source: e-commerce
Industries: Technology

Peter Szulczewski owns about 18% of e-commerce marketplace Wish, which connects shoppers with merchants who are mostly in China. In August 2019, Wish raised a reported $300 million round that valued the company at over $11 billion. Szulczewski grew up in an apartment block in Tarchomin, a district of Warsaw, then immigrated with his family to Canada at age 11. The computer science grad joined Google, where he helped build software that helps advertisers target people’s searches. He quit Google in 2009 to start his own software company, ContextLogic, which looked at a person’s browsing to predict their interests. In 2011 Szulczewski and college friend Danny Zhang re-launched the company as Wish.

#28 Garrett Camp

Net Worth: $1.7 B
Age: 41
Source: Uber
Industries: Technology

Uber chairman Garrett Camp cofounded the ride-hailing startup with Travis Kalanick in 2009. The Uber mobile phone app lets users request a ride and a driver-contractor is routed to pick them up — with Uber getting a cut of the fare. Camp owns about 4% of Uber, which listed its shares on the New York Stock Exchange on May 10, 2019. Before Uber, Garrett Camp founded web discovery tool StumbleUpon, which he sold to eBay in 2007 for $75 million.

JUDY SIEGEL-ITZKOVICH/THE JERUSALEM POST

#29 (tie) Marcel Adams & family

Net Worth: $1.5 B
Age: 99
Source: Real Estate
Industries: Real Estate

One of Canada’s most prolific real estate investors, Marcel Adams founded Iberville Developments in 1958. Iberville owns and manages nearly 8 million square feet across some 100 shopping centers, office spaces, industrial properties and residential assets. Born in Romania under the last name “Abramovich,” Adams survived Holocaust labor camps during World War II before coming to Canada. He got his start working in the leather industry, but began investing in local real estate by the mid 1950s. His son, Sylvan Adams, a “Giving Pledge” signatory who now lives in Israel, has since taken over the business.

Canada's Richest People: Jacques D'Amours

#29 (tie) Jacques D’Amours

Net Worth: $1.5 B
Age: 63
Source: Retail
Industries: Fashion & Retail

Jacques D’Amours co-founded Canadian convenience store conglomerate Alimentation Couche-Tard in 1980. He retired as VP of administration in 2014, but remains on the company’s board and is its second-largest shareholder. Couche-Tard has ballooned by snatching up competitors, including Minnesota-based Holiday Stationstores for $1.6 billion in December 2017. The company now boasts annual sales of $59 billion and more than 14,000 owned or franchised stores worldwide.

#29 (tie) Stephen Jarislowsky

Net Worth: $1.5 B
Age: 94
Source: Money Management
Industries: Finance & Investments

Stephen Jarislowsky made the bulk of his fortune at the helm of Jarislowsky Fraser, the investment management firm he founded in 1955. He stepped down as CEO in 2012 but remains chairman emeritus of the company and president of the Jarislowsky Foundation. Canadian bank Scotiabank bought Jarislowsky Fraser for about $750 million in stock and cash in April 2018. He owns a sizable art collection that is largely comprised of Canadian art, but also includes Chinese jade and French impressionism. His foundation has endowed over $220 million and has established 40 university chairs across Canada.

Forbes

#32 (tie) Hal Jackman

Net Worth: $1.4 B
Age: 87
Source: Insurance, Investments
Industries: Finance & Investments

Hal Jackman and his family are the largest shareholders of E-L Financial Corporation, a Toronto investment and insurance holding company. His father, former Parliament member Harry Jackman, built a financial services empire, which Hal continued to expand over his decades at the helm. His son, Duncan, now runs the business as chief executive officer, president and chairman of E-L Financial. Jackman followed in his father’s footsteps into politics, serving as the 25th lieutenant governor of Ontario from 1991 to 1997.

Forbes

#32 (tie) Serge Godin

Net Worth: $1.4 B
Age: 70
Source: Information Technology
Industries: Technology

Serge Godin is chairman of Canadian tech firm CGI Group, which he founded in 1976 at age 26. One of nine children, Godin started working for his father (who had just a fifth-grade education) at the family’s sawmill at age 12. He studied computer science and got an MBA from Quebec’s Université Laval, then worked in consulting before using $5,000 in savings to start CGI. Godin serves as chairman of the $9.3 billion (revenue) company; he was president and CEO until 2006. He has overseen more than 70 acquisitions, including the 1998 purchase of Bell Sygma, which nearly doubled the size of the company at the time.

Forbes

#32 (tie) Pierre Karl Péladeau

Net Worth: $1.4 B
Age: 58
Source: Media
Industries: Media & Entertainment

The son of Quebecor’s founder, Pierre Karl Péladeau is the largest individual shareholder in the media company, which prints Le Journal de Montréal. Péladeau has spent 16 years as the company’s CEO–taking a three year break between 2014 and 2017. In 2015, he won and led the separatist Parti Québécois for nearly a year, before resigning in May 2016. In February 2017, he returned as CEO of a very healthy Quebecor, as shares rose 70% during his political stint.

#32 (tie) Clayton Zekelman

Net Worth: $1.4 B
Age: 51
Source: Steel
Industries: Manufacturing

Clayton Zekelman owns a stake in his family’s steel business, Zekelman Industries. The $2.8 billion (revenues) company is one of North America’s largest steel pipe and tube makers. Clayton and his brothers, fellow billionaires Barry Zekelman and Alan Zekelman, split 100% ownership of Zekelman Industries. They sold the company to the Carlyle Group in 2006 for some $1.2 billion, but bought the business back in 2011. One of Zekelman Industries’ subsidiaries, Atlas Tube, is producing steel for the stretches of the Mexican border wall going up in Arizona. He also owns two telecoms companies in Ontario.

Forbes

#36 (tie) Jack Cockwell

Net Worth: $1.3 B
Age: 79
Source: Real Estate, Private Equity
Industries: Finance & Investments

A South African native and trained accountant, Jack Cockwell is a famed dealmaker in Canada. From the 1970s through the early 1990s he built the Bronfmans’ Edper conglomerate, acquiring massive holdings in real estate, forestry and mining. Now known as Brookfield Asset Management, one of the world’s biggest money managers, he handed the reins to fellow billionaire Bruce Flatt in 2002. His wealth comes from a large holding in Brookfield shares, much of it in a partnership shared with other board directors and management. Cockwell is a member of Ryerson University’s board of governors and governor of the Royal Ontario Museum.

Forbes

#36 (tie) Terence (Terry) Matthews

Net Worth: $1.3 B
Age: 77
Source: Telecom
Industries: Telecom

A dual-UK Canadian citizen, Terence (Terry) Matthews made his fortune with telecom firms Mitel and Newbridge Networks. In December 2018, he left his Chairman role at Mitel, the company he co-founded with Michael Cowpland, after it was acquired for $2 billion. In 1986, Matthews founded data networking business Newbridge Networks before selling it to Alcatel in 2000 for $7.1 billion. He claims to have funded or founded more than 100 companies, many through his Ottawa-based investment firm Wesley Clover. A resident of Canada, his UK property portfolio includes Celtic Manor Resort, which hosted the 2010 Ryder Cup and 2014 NATO Summit.

James MacDonald/Bloomberg

#36 (tie) Stephen Smith

Net Worth: $1.3 B
Age: 68
Source: Finance & Investments
Industries: Finance & Investments

Stephen Smith is the founder, chairman and CEO of Canadian mortgage lender First National Financial. Smith launched the company in 1988, just four years after being personally bankrupt, and took it public in 2012. He also owns about half of Canada Guaranty Mortgage Insurance Company and a stake in publicly-traded Canadian bank Equitable Group. In 2018, he bought half of Walmart Canada Bank from Walmart and put up over $110 million to start the private equity fund Peloton. In 2015 he donated $50 million the Queens University, where the business school is named after him.

#39 (tie) Aldo Bensadoun

Net Worth: $1.1 B
Age: 81
Source: Shoes
Industries: Fashion & Retail

Aldo Bensadoun is the founder of Canadian retailer ALDO, best known for its footwear and accessories. The son of a shoe merchant and grandson of a cobbler, Bensadoun was born in Morocco and spent most of his childhood in France. Upon moving to Montreal for college, he opened ALDO as a concession within a chain of popular fashion boutiques in 1972. His son, David, who is now the CEO, joined the company in 1996 and became the fourth generation of his family to work in the shoe business. ALDO pulled in an estimated $1.5 billion in sales in 2019 and has more than 3,000 stores across the world.

#39 (tie) Guy Laliberté

Net Worth: $1.1 B
Age: 60
Source: Cirque du Soleil
Industries: Media & Entertainment

In 1984, Guy Laliberté, a former street performer, cofounded Cirque du Soleil, which would become one of the world’s biggest entertainment companies. His empire began with a show, funded by $1 million from the Canadian government, put on for the 450th anniversary of the discovery of Canada. The celebration went global, and the shows have been performed for more than 180 million spectators across more than 400 cities on six continents. He sold much of his 90% stake to U.S. private equity firm TPG Capital and Chinese investment group Fosun in 2015, but kept 10% of the company. In 2017, he founded Lune Rouge, which develops and invests in projects in arts, technology and entertainment. Laliberté was briefly held in custody in Tahiti for growing cannabis at his French Polynesian residence in November 2019.

#39 (tie) Mark Leonard & family

Net Worth: $1.1 B
Age: 63
Source: Software
Industries: Technology

Mark Leonard is chairman of Canadian tech company Constellation Software, which he founded in 1995. Constellation Software, also known as CSI, acquires, manages and builds software businesses. In 2019, the firm acquired nearly 100 tech companies. Constellation Software, also known as CSI, acquires, manages and builds software businesses. In 2018, the firm acquired 8 tech companies. After getting his MBA from the University of Western Ontario, Leonard worked in venture capital for 11 years.

#39 (tie) Brandt Louie

Net Worth: $1.1 B
Age: 76
Source: Drugstores
Industries: Food & Beverage

Louie presides over grocery retailer H.Y. Louie and drug store chain London Drugs. His Vancouver-based holding company H.Y. Louie is the third-largest private firm in British Columbia, with an estimated $4.2 billion in revenue. His grandfather, Hok Yat Louie, immigrated to Vancouver from China in 1896 and worked as a farm laborer. Hok Yat eventually saved enough money to open a small general store in the city’s Chinatown in 1903. Louie joined the family business in 1972 and became president in 1987.

#39 (tie) Alan Zekelman

Net Worth: $1.1 B
Age: 57
Source: Steel
Industries: Manufacturing

Alan Zekelman owns a stake in his family’s steel business, Zekelman Industries. The $2.8 billion (revenues) company is one of North America’s largest steel pipe and tube makers. Alan and his brothers, fellow billionaires Barry Zekelman and Clayton Zekelman, split 100% ownership of Zekelman Industries. They sold the company to the Carlyle Group in 2006 for some $1.2 billion, but bought the business back in 2011. One of Zekelman Industries’ subsidiaries, Atlas Tube, is producing steel for the stretches of the Mexican border wall going up in Arizona.

Forbes

#44 Gerald Schwartz

Net Worth: $1 B
Age: 78
Source: Finance
Industries: Finance & Investments

Gerald Schwartz runs Onex, one of Canada’s largest private equity firms. He got his start working with buyout legends Jerome Kohlberg, Henry Kravis and George Roberts at Bear Stearns in the 1970s. The Americans left to start KKR in 1976; Schwartz went home to Canada and cofounded the media company CanWest in 1977. In 1984 he started Onex, which has quietly outperformed many of the vaunted American private equity shops. Today the firm boasts $38 billion in assets, which Schwartz manages as chairman and CEO.

https://www.sec.gov/Archives/edgar/data/230098/000113031902001603/m08476e18vk.htm?fbclid=IwAR0Y1U-RNQ9gt928BZ_hLkyD4L4ALQp_i3R-tyYuI0j1QHXDdaDwDt6fwJc

FORM 18-K

For Foreign Governments and Political Subdivisions Thereof

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

ANNUAL REPORT

CANADA

(Name of Registrant)

Date of end of last fiscal year: March 31, 2002

SECURITIES REGISTERED*

(As of the close of the fiscal year)





Time of Issue	Amounts as to which registration Is effective	Name of exchange on which registered

N/A	N/A	N/A

Name and address of person authorized to receive notices

and communications from the Securities and Exchange Commission:

HIS EXCELLENCY MICHAEL KERGIN

Canadian Ambassador to the United States of America

Canadian Embassy

501 Pennsylvania Avenue, N.W.

Washington, D.C. 20001

Copies to:


BILL MITCHELL Director Financial Markets Division Department of Finance, Canada 20th Floor, East Tower L’Esplanade Laurier 140 O’Connor Street Ottawa, Ontario K1A 0G5		DAVID MURCHISON Consul Consulate General of Canada 1251 Avenue of the Americas New York, N.Y. 10020		ROBERT W. MULLEN, JR. Milbank, Tweed, Hadley & McCloy LLP 1 Chase Manhattan Plaza New York, N.Y. 10005

* The Registrant is filing this annual report on a voluntary basis.

The information set forth below is to be furnished:


1.	In respect of each issue of securities of the registrant registered, a brief statement as to:


	(a)	The general effect of any material modifications, not previously reported, of the rights of the holders of such securities.

No such modifications.


	(b)	The title and the material provisions of any law, decree or administrative action, not previously reported, by reason of which the security is not being serviced in accordance with the terms hereof.

No such provisions.


	(c)	The circumstances of any other failure, not previously reported, to pay principal, interest, or any sinking fund or amortization installment.

No such failure.


2.	A statement as of the close of the last fiscal year of the registrant giving the total outstanding of:


	(a)	Internal funded debt of the registrant. (Total to be stated in the currency of the registrant. If any internal funded debt is payable in a foreign currency, it should not be included under this paragraph (a) but under paragraph (b) of this item).

Reference is made to pages 25-27 of Exhibit D.


	(b)	External funded debt of the registrant. (Totals to be stated in the respective currencies in which payable). No statement need be furnished as to inter-governmental debt.

Reference is made to pages 25-27 of Exhibit D.


3.	A statement giving the title, date of issue, date of maturity, interest rate and amount outstanding, together with the currency or currencies in which payable, of each issue of funded debt of the registrant outstanding as of the close of the last fiscal year of the registrant.

Reference is made to pages 34-47 of Exhibit D.


4. (a)	As to each issue of securities of the registrant which is registered, there should be furnished a breakdown of the total amount outstanding, as shown in Item 3, into the following:


	(1)	Total amount held by or for the account of the registrant.

As at December 1, 2002, the registrant held a de minimis amount.


	(2)	Total estimated amount held by nationals of the registrant (or if registrant is other than a national government, by the nationals of its national government); this estimate need be furnished only if it is practicable to do so.

Not practicable to furnish.


	(3)	Total amount otherwise outstanding.

Not applicable.


	(b)	If a substantial amount is set forth in answer to paragraph (a)(1) above, describe briefly the method employed by the registrant to reacquire such securities.

Not applicable.


5.	A statement as of the close of the last fiscal year of the registrant giving the estimated total of:


	(a)	Internal floating indebtedness of the registrant. (Total to be stated in the currency of the registrant).

Reference is made to pages 25-27 of Exhibit D.


	(b)	External floating indebtedness of the registrant. (Total to be stated in the respective currencies in which payable).

Reference is made to pages 25-27 of Exhibit D.

Statements of the receipts, classified by source, and of the expenditures, classified by purpose, of the registrant for each fiscal year of the registrant ended since the close of the latest fiscal year for which such information was previously reported. These statements should be so itemized as to be reasonably informative and should cover both ordinary and extraordinary receipts and expenditures; there should be indicated separately, if practicable, the amount of receipts pledged or otherwise specifically allocated to any issue registered, indicating the issue.

Reference is made to pages 18-24 of Exhibit D.


7. (a)	If any foreign exchange control, not previously reported, has been established by the registrant (or if the registrant is other than a national government, by its national government), briefly describe such foreign exchange control.

No foreign exchange controls have been established by the registrant.


	(b)	If any foreign exchange control previously reported has been discontinued or materially modified, briefly describe the effect of any such action, not previously reported.

Not applicable.


8.	Brief statements as of a date reasonably close to the date of the filing of this report (indicating such date) in respect of the note issue and gold reserves of the central bank of issue of the registrant, and of any further gold stocks held by the registrant.

Reference is made to page 17 of Exhibit D.

Statements of imports and exports of merchandise for each year ended since the close of the latest year for which such information was previously reported. Such statements should be reasonably itemized so far as practicable as to commodities and as to countries. They should be set forth in terms of value and of weight or quantity; if statistics have been established only in terms of value, such will suffice.

Reference is made to pages 12-14 of Exhibit D.

10.

The balances of international payments of the registrant for each year ended since the close of the latest year for which such information was previously reported. The statements of such balances should conform, if possible, to the nomenclature and form used in the “Statistical Handbook of the League of Nations.” (These statements need be furnished only if the registrant has published balances of International payments.)

Reference is made to pages 15-16 of Exhibit D.

On March 12, 1996, Canada established a program for the offering, from time to time, of its Canada Notes due nine months or more from date of issue (“Canada Notes”). During the period from December 1, 2001 through November 30, 2002, Canada did not file with the United States Securities and Exchange Commission any pricing supplements relating to the sale of Canada Notes. Consequently, the portion of Canada Notes sold or to be sold during that period in the United States or in circumstances where registration of the Canada Notes is required through November 30, 2002 was U.S.$0.

Cautionary statement for purposes of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.

This annual report, including the exhibits hereto, contains various forward-looking statements and information that are based on Canada’s belief as well as assumptions made by and information currently available to Canada. When used in this document, the words “anticipate”, “estimate”, “project”, “expect”, “should” and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Among the key factors that have or will have a direct bearing on Canada are the world-wide economy in general and the actual economic, social and political conditions in or affecting Canada.

This annual report comprises:


	(a)	Pages numbered 1 to 5 consecutively.

	(b)	The following exhibits:


Exhibit A:		None
Exhibit B:		None
Exhibit C-1:		Copy of the 2001 Budget of Canada (incorporated by reference from Exhibit C-4 to Canada’s Amendment No. 3 to Form 18-K for the fiscal year ended March 31, 2000)
Exhibit C-2:		Copy of the Economic and Fiscal Update October 30, 2002, Department of Finance, Canada (incorporated by reference from Exhibit C-2 to Canada’s Amendment No. 1 to Form 18-K for the fiscal year ended March 31, 2001 on Form 18-K/A dated November 1, 2002)
Exhibit D:		Current Canada Description
Exhibit E:		Consent of Deputy Minister of Finance

This annual report is filed subject to the instructions for Form 18-K for Foreign Governments and Political Subdivisions Thereof.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized, at Ottawa, Canada, on the 20th day of December, 2002.


		CANADA

		By:		/s/ Rob Stewart

				Rob Stewart
				Senior Chief
				Financial Markets Division
				Financial Sector Policy Branch
				Department of Finance, Canada

EXHIBIT INDEX


Exhibit No.

Exhibit A:		None
Exhibit B:		None
Exhibit C-1:		Copy of the 2001 Budget of Canada (incorporated by reference from Exhibit C-4 to Canada’s Amendment No. 3 to Form 18-K for the fiscal year ended March 31, 2000)
Exhibit C-2:		Copy of the Economic and Fiscal Update October 30, 2002, Department of Finance, Canada (incorporated by reference from Exhibit C-2 to Canada’s Amendment No. 1 to Form 18-K for the fiscal year ended March 31, 2001 on Form 18-K/A dated November 1, 2002)
Exhibit D:		Current Canada Description
Exhibit E:		Consent of Deputy Minister of Finance

Exhibit D

DESCRIPTION OF CANADA

TABLE OF CONTENTS


		Page
General Information		3
The Canadian Economy		6
External Trade		12
Balance of Payments		15
Foreign Exchange and International Reserves		17
Government Finances		18
Debt Record		28
Monetary and Banking System		29
Tables and Supplementary Information		34

Unless otherwise indicated, dollar amounts hereafter in this document are expressed in Canadian dollars. On December 16, 2002 the noon buying rate in New York City payable in Canadian dollars (“$”), as reported by the Federal Reserve Bank of New York, was $1.00 = $0.6399 United States dollars (“U.S.$”). See “Foreign Exchange and International Reserves”.

LOGO

The information contained herein has been reviewed by Kevin G. Lynch, Deputy Minister of Finance, Canada and is included herein on his authority. Certain information contained in this Exhibit has been extracted or compiled from public official documents of Canada, which include statistical data subject to revision. Canada is sometimes referred to as the “Government of Canada” or the “Government” in this Exhibit.

CANADA

GENERAL INFORMATION

Area and Population

Canada is the second largest country in the world, with an area of 9,984,670 square kilometers of which about 891,163 square kilometers are covered by fresh water. The occupied farm land is about 7% and the productive forest land is about 24% of the total area. The population on July 1, 2002 was estimated to be 31.4 million. Approximately 64% of Canada’s population lives in metropolitan areas of which Toronto, Montreal and Vancouver are the largest. Most of Canada’s population lives within 325 kilometers of the United States border.

Form of Government

Canada is a federal state composed of ten provinces and three territories. In 1867, the United Kingdom Parliament adopted the British North America Act, which established the Canadian federation comprised of, at that time, the Provinces of Ontario, Québec, Nova Scotia and New Brunswick. Since then, six additional provinces (Manitoba, British Columbia, Prince Edward Island, Saskatchewan, Alberta and Newfoundland and Labrador), along with the Yukon Territory, the Northwest Territories and the new territory of Nunavut (which was carved out of the Northwest Territories on April 1, 1999), have become parts of Canada.

The British North America Act (which has been renamed the Constitution Act, 1867) gave the Parliament of Canada legislative power in relation to a number of matters including all matters not assigned exclusively to the legislatures of the provinces. These powers now include matters such as defense, the raising of money by any mode or system of taxation, the regulation of trade and commerce, the public debt, money and banking, interest, bills of exchange and promissory notes, navigation and shipping, extra-provincial transportation, aerial navigation and, with some exceptions, telecommunications. The provincial legislatures have exclusive jurisdiction in such areas as education, municipal institutions, property and civil rights, administration of justice, direct taxation for provincial purposes and other matters of purely provincial or local concern.

The executive power of the federal Government is vested in the Queen, represented by the Governor General, whose powers are exercised on the advice of the federal Cabinet, which is responsible to the House of Commons. The legislative branch at the federal level, Parliament, consists of the Crown, the Senate and the House of Commons. The Senate has 105 seats. There are 24 seats each for the Maritime Provinces, Québec, Ontario and Western Canada, 6 for Newfoundland and 1 each for the three territories. Senators are appointed by the Governor General on the advice of the federal Cabinet and hold office until age 75. The House of Commons has 301 members, elected by voters in single-member constituencies. The leader of the political party that gains the most seats in each general election is usually invited by the Governor General to be Prime Minister and to form the Government. The Prime Minister selects the members of the federal Cabinet from among the members of the House of Commons and the Senate (in practice almost entirely from the former). The House of Commons is elected for a period of five years, subject to earlier dissolution upon the recommendation of the Prime Minister or because of the Government’s defeat in the House of Commons on a vote of no confidence.

The most recent general election was held on November 27, 2000. As a result of that election the Liberal Party forms the Government. The distribution of seats in the House of Commons is as follows: the Liberal Party has 169 seats, the Canadian Alliance Party has 63 seats, the Bloc Québécois has 35 seats, the New Democratic Party has 14 seats and the Progressive Conservative Party has 14 seats. There are 3 independent members and 3 vacant seats.

The executive power in each province is vested in the Lieutenant Governor, appointed by the Governor General on the advice of the federal Cabinet. The Lieutenant Governor’s powers are exercised on the advice of the provincial cabinet, which is responsible to the legislative assembly. Each provincial legislature is composed of a Lieutenant Governor and a legislative assembly made up of members elected for a period of five years. The practice of selecting the provincial premier and the provincial cabinet in each province follows that described for the federal level, as does dissolution of a legislature.

Constitutional Reform

In April 1982, Her Majesty the Queen proclaimed the Constitution Act, 1982, terminating British legislative jurisdiction over Canada’s Constitution. The Constitution Act, 1982 provides that Canada’s Constitution may be amended pursuant to an amending formula contained therein and contains the Canadian Charter of Rights and Freedoms, including the linguistic rights of Canada’s two major language groups.

The government of Québec did not sign the constitutional agreement which led to the repatriation of the Canadian Constitution and the proclamation of the Constitution Act, 1982. Although Québec is legally bound by the Constitution Act, 1982, the government of Québec set out five conditions for accepting the legal legitimacy of the Act. Discussions on those principles led on April 30, 1987 at Meech Lake to a unanimous agreement by First Ministers on principles respecting each of Québec’s conditions.

Québec

Since September 1994, Québec has been governed by the Parti Québécois, whose platform calls for Québec’s accession to independence. On October 30, 1995, the government of Québec held a consultative referendum under provincial law, seeking a mandate to secede from Canada and proclaim Québec’s independence, after having made a formal offer of a new economic and political partnership between Québec and the rest of Canada. The government’s proposal was rejected by a vote of 50.6% against and 49.4% in favour, with a participation rate of 93%. While all sides accepted the 1995 referendum results, the Parti Québécois has not abandoned the goal of achieving independence for Québec.

The Government of Canada and the governments of a number of provinces outside Québec have taken a series of initiatives since the 1995 referendum aimed at reinforcing Canadian unity, including non-constitutional measures (notably on provincial responsibility for labour market programs), demonstrating openness to Québecers’ aspirations, as well as making efforts to clarify the rules governing any future referendum and the possible consequences of a Québec secession.

In September 1996, the Government of Canada referred a series of legal questions to the Supreme Court of Canada with a view to clarifying, at both domestic and international law, whether the government of Québec has the right to secede from Canada unilaterally. On August 20, 1998, the Supreme Court rendered judgment, ruling that the government of Québec cannot, under either the Constitution of Canada or international law, legally effect the unilateral secession of Québec from Canada. The Supreme Court also stated that, if a clear majority of Québecers were to clearly and unambiguously express their will to secede, all governments in Canada would then have a constitutional obligation to enter into negotiations to address the potential act of secession as well as its possible terms should, in fact, secession proceed.

On June 29, 2000, the Government of Canada enacted a law to give effect to the requirement for clarity set out in the opinion of the Supreme Court. That law requires the House of Commons to assess, prior to any future referendum on the secession of a province, whether the referendum question made clear that the province would cease to be part of Canada and become an independent country. The law further requires that, after the vote itself, the House of Commons also assess whether there appeared to be a clear majority in support of the question. Only if both these conditions were met would the Government of Canada be authorized to enter into negotiations which might lead to the constitutional amendments required to effect secession.

In September 1997, the Premiers of the nine provinces other than Québec met in Calgary to launch public consultations on a set of declaratory principles, including a recognition of the unique character of Québec society within Canada, which seek to frame the fundamental values underlying the Canadian federation. Over the winter and spring of 1998, the legislatures of all nine provinces participating in the Calgary process passed resolutions of support for the principles set out in the Calgary declaration.

On November 30, 1998, the Parti Québecois government was re-elected with a majority of seats (75 out of 125) in Québec’s National Assembly, though with a vote count of 42% of the votes cast, slightly below that received by the main opposition party, the federalist Liberal Party of Québec, which won 48 seats. A third party, the Action Démocratique du Québec, which advocates a moratorium on further referenda on secession, took 12% of the votes cast and won 1 seat.

THE CANADIAN ECONOMY*

General

The following chart shows the distribution of real gross domestic product (“GDP”) at basic prices (1997 constant dollars) in 2001, which is indicative of the structure of the economy.

DISTRIBUTION OF REAL GROSS DOMESTIC PRODUCT AT BASIC PRICES(1)

Percentage Distribution in 2001(2)

LOGO

Source: Statistics Canada, Gross Domestic Product by Industry.

(2) May not add to 100.0% due to rounding.

(3) The agriculture, forestry, fishing, hunting, mining and oil and gas extraction sectors include a service component.


*	Annual figures and year-over-year changes are based upon data that are not seasonally adjusted, except where otherwise indicated. Quarterly and semi-annual figures or changes are based upon seasonally adjusted data, except where otherwise indicated.

The following table shows the composition of Canada’s real GDP at basic prices (1997 constant dollars) by sector in 1987 and over the 1997-2001 period.

REAL GROSS DOMESTIC PRODUCT AT BASIC PRICES BY INDUSTRY



		For the years ended December 31,

		2001		2000		1999		1998		1997		1987(2)		2001			1997			1987(2)


		(millions of 1997 dollars)												(percentage distribution)
Agriculture		$	14,617	$	15,975	$	16,437	$	15,230	$	14,016	$	12,090		1.5	%		1.7	%		1.8	%
Forestry, fishing and hunting			6,593		6,905		6,675		6,466		6,411		8,149		0.7			0.8			1.2
Mining and oil and gas extraction			37,062		36,461		33,901		34,461		33,935		25,971		3.9			4.2			3.9
Manufacturing			160,935		168,825		160,150		149,390		142,282		112,727		17.0			17.4			17.1
Construction			50,346		48,498		46,529		44,348		42,995		44,241		5.3			5.3			6.7
Utilities			27,288		27,960		26,705		26,140		26,685		23,010		2.9			3.3			3.5
Transportation and warehousing			44,531		45,265		43,306		41,036		40,337		31,112		4.7			4.9			4.7
Wholesale and retail trade			107,243		104,256		98,508		92,644		85,946		69,290		11.3			10.5			10.5
Finance, insurance, real estate and leasing			186,989		180,834		174,227		166,070		161,097		116,387		19.7			19.7			17.7
Public administration and defence			53,826		52,057		51,082		50,249		49,482		44,137		5.7			6.1			6.7
Community, business and personal services			258,678		248,390		236,044		222,929		213,622		172,959		27.3			26.2			26.3

	TOTAL (1)	$	948,108	$	935,426	$	893,564	$	848,963	$	816,808	$	658,425		100.0	%		100.0	%		100.0	%

Source: Statistics Canada, Input Output Division.

(1) May not add to total due to rounding.

(2) Data does not add to total due to rebasing.

The share of service-producing industries in real GDP at basic prices increased from 65.7% in 1987 to 68.7% in 2001. The fastest growing groups in this sector have been wholesale and retail trade and finance, insurance, real estate and leasing which both grew at average annual rates of 3.3% and 3.5%, between 1987 and 2001, compared to an average annual growth rate of 2.7% for total real GDP (1997 constant dollars). The goods-producing sector constituted 31.3% of real GDP at basic prices in 2001, down from 34.2% in 1987. The decline was most evident in construction with its share declining from 6.7% to 5.3%, and in utilities, where the share fell from 3.5% to 2.9%.

Real GDP growth was 3.9% in 1998, 5.2% in 1999 and 4.6% in 2000, while manufacturing output growth exceeded total output growth over this period, increasing by 4.9% in 1998, 7.2% in 1999 and by 4.7% in 2000. Total year-over-year GDP growth slowed in 2001, increasing by 1.4%, but has rebounded in 2002 to date, increasing by 1.9%, 2.5% and 3.6% in the first, second and third quarter respectively. On a year-over-year basis, manufacturing output contracted by 4.6% in 2001, and by 1.3% in the first quarter of 2002, before rising by 1.2% and 5.0% in the second and third quarter respectively.

The construction sector was the second largest goods-producing sector in Canada in 2001. Construction activity rose by 3.3% in 1998, 4.7% in 1999, 4.2% in 2000 and 3.9% in 2001. Construction output grew 4.4% year-over-year in the first quarter of 2002, 4.7% in the second quarter and 5.5% in the third quarter.

Output from mining and oil and gas extractions increased at a rate of 1.5% in 1998. Output fell by 0.7% in 1999, rebounded by 7.8% in 2000 and moderated to 1.7% in 2001. In 2002, year-over-year growth fell by 1.1% in the first quarter, 2.9% in the second quarter and 0.6% in the third quarter.

Although the share of agricultural output in total real GDP in 2001 was 1.5%, agriculture is an important part of Canada’s economy and a significant contributor to foreign exchange earnings. Wheat is Canada’s principal agricultural crop and one of its largest export products by value. The wheat crop was 24.3 million tonnes in the 1997-98 crop year, 24.1 million tonnes in the 1998-1999 crop year, 26.9 million tonnes in the 1999-2000 crop year and 26.5 million tonnes in the 2000-2001 crop year. Total wheat production fell to 20.6 million tonnes in the 2001-2002 crop year. Statistics Canada estimates that the 2002-2003 crop year will be one of the worst growing seasons in recent history in Western Canada with wheat production estimated at only 15.5 million tonnes due to exceptionally dry conditions.

Unless otherwise specified, all growth rates are calculated using real GDP at basic prices, 1997 chained dollars. All percentage changes are compounded at annual rates. For percentage changes over more than one year the method of computation utilizes observations for the first and final years indicated. For percentage changes over less than one year the method of calculation utilizes observations for the period stated and the previous period of the same length.

Gross Domestic Income and Expenditure

Real GDP continued to trend upward from 1997 to 2000, growing by 4.2% in 1997, 4.1% in 1998, 5.4% in 1999, and 4.5% in 2000, while nominal GDP grew by 5.5% in 1997, 3.7% in 1998, 7.2% in 1999 and 8.6% in 2000. Real and nominal GDP growth tapered off in 2001 increasing by 1.5% and 2.6% respectively. In the first three quarters of 2002, real GDP rebounded by 2.1%, 3.1% and 4.0% respectively (year-over-year); nominal GDP growth was 0.5%, 3.4% and 6.1% respectively.

GROSS DOMESTIC INCOME AND EXPENDITURE



					First 3 quarters (10)				For the years ending December 31,

					2002		2001		2001		2000		1999		1998		1997


					(in millions of dollars)
INCOME
	Labor income (1)				$	590,485	$	567,163	$	568,864	$	545,110	$	502,726	$	475,335	$	453,073
	Corporate profits (2)					121,197		123,876		118,227		129,821		108,745		86,132		87,932
	Non-farm unincorporated business income					71,745		66,104		66,551		63,962		61,351		57,936		54,663
	Farm income					1,977		2,976		2,972		1,758		1,935		1,724		1,663
	Other net domestic income (3)					58,155		65,171		63,386		62,334		53,887		53,461		54,911

		Net domestic income				896,588		877,841		872,577		854,701		779,285		723,487		700,063
	Indirect taxes, capital consumption
		allowances and residual error				235,445		217,973		219,669		210,294		201,239		191,486		182,670

GROSS DOMESTIC INCOME					$	1,132,033	$	1,095,814	$	1,092,246	$	1,064,995	$	980,524	$	914,973	$	882,733

EXPENDITURE
	Consumer expenditure				$	645,739	$	618,723	$	620,777	$	594,089	$	560,954	$	531,169	$	510,695
	Government expenditure
		(goods & services):
	Federal (4)					45,864		42,599		43,168		41,599		38,160		35,250		34,011
	Provincial-municipal (5)					196,149		186,615		187,898		178,217		169,741		164,086		157,854

			Total government (6)			242,013		229,213		231,066		219,816		207,901		199,336		191,865
				of which current		212,763		203,111		204,492		196,004		185,317		179,317		171,756
				of which capital (7)		29,251		26,103		26,574		23,812		22,584		20,019		20,109

	Residential construction					61,508		51,080		52,154		48,566		45,917		42,497		43,519
	Business fixed investment:
		Non-residential construction				51,044		52,427		52,268		50,890		46,816		45,177		43,872
		Machinery and equipment				84,405		87,277		85,504		86,693		79,977		74,116		67,346

			Total			135,449		139,704		137,772		137,583		126,793		119,293		111,218
	Inventory accumulation:
		Business non-farm				2,151		-1,996		-4,740		8,189		4,932		5,409		9,174
		Farm				-1,311		-1,275		-1,300		-161		55		-676		-1,000

			Total			840		-3,271		-6,040		8,028		4,987		4,733		8,174
	Exports (goods & services) (8)					467,080		482,611		473,000		484,331		421,796		379,203		348,604
	Imports (goods & services) (9)					-419,417		-422,591		-416,498		-428,934		-388,157		-360,871		-331,271
	Residual error of estimate					-1,179		345		15		1,516		333		-387		-71

GROSS DOMESTIC EXPENDITURE					$	1,132,033	$	1,095,815	$	1,092,246	$	1,064,995	$	980,524	$	914,973	$	882,733

GROSS DOMESTIC EXPENDITURE IN 1997 CHAIN-FISHER DOLLARS (11)					$	1,057,402	$	1,025,802	$	1,027,523	$	1,012,335	$	968,451	$	918,910	$	882,733

Source: Statistics Canada, National Income and Expenditure Accounts.

(1) Includes military pay and allowances.

(2) Includes net interest and dividends paid to non-residents.

(3) Includes interest, miscellaneous investment income and government business enterprise profits before taxes.

(4) Net spending (outlays minus sales) including gross capital formation and Canada Pension Plan.

(5) Net spending (outlays minus sales) including gross capital formation and Québec Pension Plan.

(6) Includes government inventories.

(7) Includes inventory accumulations at all levels of government.

(8) Excludes investment income received from non-residents.

(9) Excludes investment income paid to non-residents.

(10) Seasonally adjusted, annual rates.


(11)	A new formula (Chain-Fisher) is now used to estimate the level of real GDP. This new formula replaces the previous Laspeyres formula.

Economic Developments*

Nominal GDP at market prices was about $1.1 trillion in 2001. Real output growth experienced gains of 4.2% in 1997, 4.1% in 1998, 5.4% in 1999 and 4.5% in 2000, before slowing to 1.5% in 2001. Year-over-year real GDP growth rebounded in 2002 to date, registering 2.1% in the first quarter, 3.1% in the second quarter and 4.0% in the third quarter.

Real consumer spending rose by 4.6% in 1997, 2.8% in 1998, 3.9% in 1999, 3.7% in 2000 and 2.6% in 2001. Year-over-year growth in consumer spending remained robust at 2.1% in the first quarter, 2.7% in the second quarter and 2.9% in the third quarter of 2002. The personal savings rate declined steadily between 1991 and 1997, after reaching a peak of 13.8% in 1991. In 2001, the personal savings rate was 4.6%, increasing to 5.3% in the first quarter of 2002 and 4.7% in both the second and third quarter of 2002.

Real non-residential business investment grew at its highest rate on record in 1997, rising 22.6% before slowing to 5.3% in 1998. Year-over-year growth in non-residential business investment was 7.8% in 1999, 8.2% in 2000 and fell by 1.1% in 2001. The strength in non-residential business investment over this period was largely due to strong increases in machinery and equipment investment. Year-over-year growth decreased by 5.2% in the first quarter of 2002, fell by 3.4% in the second quarter and 4.9% in the third quarter.

Housing starts have generally increased in recent years. However, the recent levels have tended to be below those reached in the 1980s. Housing starts rose to 148 thousand units in 1997, before dropping to 138 thousand units in 1998. Housing starts rebounded in 1999, registering 149 thousand units, and continued rising to 153 thousand units and 163 thousand units in 2000 and 2001 respectively. In the first three quarters of 2002, the level of housing starts expanded strongly to 204 thousand, 196 thousand and 206 units respectively.

Government spending on current goods and services contracted between 1994 and 1997 by an average of 0.9% annually. Growth was 3.2% in 1998, 1.9% in 1999, 2.3% in 2000 and 3.3% in 2001. Year-over-year growth in government spending on goods and services for 2002 was 2.5% in the first quarter, 2.0% in the second quarter and 2.2% in the third quarter.

In current dollar terms, the trade balance was $16.8 billion in 1997 and $17.4 billion in 1998 before rising rapidly to $33.1 billion in 1999, $54.7 billion in 2000 and 55.6 billion in 2001. For 2002 the surplus at annual rates on the foreign trade balance was $48.4 billion in the first quarter, $45.0 billion in the second quarter and $47.4 billion in the third quarter. (See also “Balance of Payments”.)


*	In this section all figures are reported in real terms unless otherwise noted.

Prices and Costs

The year-over-year increase in the GDP implicit price deflator declined from 1.2% in 1997, to -0.5% in 1998, rebounding to 1.7% in 1999, 3.9% in 2000 and 1.0% in 2001. Year-over-year growth in the implicit price deflator fell by 1.6% for the first quarter of 2002, rose to 0.2% in the second quarter and increased further to 2.0% in the third quarter.

The year-over-year increase in the consumer price index (“CPI”) has been moderate since 1996, with increases of 1.6% in 1997, 0.9% in 1998 and 1.7% in 1999. After remaining below 2.0% during most of the 1990’s, the year-over-year increase in the CPI registered 2.7% in 2000 and 2.6% in 2001. The increase in 2000 is largely attributable to a surge in energy prices, while the increase observed in 2001 was more broadly-based. CPI inflation was lower in the first two quarters of 2002, at 1.5% and 1.3%, respectively, and edged up to 2.3% in the third quarter.

PRICE DEVELOPMENTS



	G.D.P.		Consumer Price Index
	Implicit														Industrial
	Chain						Total				Total Excluding				Product
For the years	Price Index						Excluding				Food &		Shelter		Price
ended December 31,	(1)		Total		Food		Food		Energy		Energy		Services		Index


	(annual percentage changes)
1997		1.2		1.6		1.6		1.6		2.4		1.6		-0.2		0.7
1998		-0.5		0.9		1.6		0.9		-4.0		1.3		0.5		0.4
1999		1.7		1.7		1.3		1.7		5.7		1.5		1.1		1.8
2000		3.9		2.7		1.4		3.1		16.2		1.5		2.1		4.3
2001		1.0		2.6		4.5		2.1		3.3		2.0		2.5		1.0
2001 Q4		-1.2		1.1		3,9		0.5		-8.9		1.7		2.1		-1.9
2002 Q1		-1.6		1.5		4.1		1.0		-5.4		1.9		1.7		-1.1
2002 Q2		0.2		1.3		2.6		1.1		-8.7		2.4		1.8		-1.5
2002 Q3		2.0		2.3		2.0		2.4		-1.6		3.0		1.8		0.3

Source: Statistics Canada, National Income and Expenditure Accounts; Consumer Prices and Price Indexes; Industry Price Indexes.

(1) This implicit price index is based on seasonally adjusted data.

The average annual increase in new collective agreements (without cost of living clauses) involving 500 or more employees for all industries was 3.1% in 2001. Average wage gains (over the life of the contract) have increased steadily since 1996. The average settlement was 1.5% in 1997, 1.7% in 1998, 2.2% in 1999 and 2.5% in 2000 and 3.1% in 2001. Year-over-year, wage gains were 2.9% in the first quarter of 2002, 2.6% in the second quarter and 2.8% in the third quarter.

Labor Market

The following table shows labor market characteristics for the periods indicated.

LABOR MARKET CHARACTERISTICS(1)

(thousands of persons)



	Canada						Atlantic Provinces						Québec

For the years	Labor		Employ-		Unemploy-		Labor		Employ-		Unemploy-		Labor		Employ-		Unemploy-
ended December 31,	Force		ment		ment Rate		Force		ment		ment Rate		Force		ment		ment Rate

1997		15,153		13,774		9.1		1,096		944		13.9		3,606		3,195		11.4
1998		15,418		14,140		8.3		1,115		971		12.9		3,660		3,282		10.3
1999		15,721		14,531		7.6		1,136		1,003		11.7		3,702		3,357		9.3
2000		15,999		14,910		6.8		1,152		1,023		11.2		3,753		3,438		8.4
2001		16,246		15,077		7.2		1,172		1,035		11.7		3,807		3,475		8.7
2001 Q4		16,347		15,094		7.7		1,183		1,044		11.7		3,844		3,493		9.1
2002 Q1		16,490		15,199		7.8		1,190		1,047		12.1		3,884		3,530		9.1
2002 Q2		16,605		15,339		7.6		1,193		1,059		11.2		3,930		3,602		8.3
2002 Q3		16,743		15,470		7.6		1,193		1,056		11.5		3,934		3,599		8.5



	Ontario						Prairie Provinces						British Columbia

For the years	Labor		Employ-		Unemploy-		Labor		Employ-		Unemploy-		Labor		Employ-		Unemploy-
ended December 31,	Force		ment		ment Rate		Force		ment		ment Rate		Force		ment		ment Rate

1997		5,801		5,313		8.4		2,609		2,454		6.0		2,040		1,869		8.4
1998		5,914		5,490		7.2		2,677		2,527		5.6		2,051		1,870		8.8
1999		6,071		5,688		6.3		2,734		2,576		5.8		2,079		1,906		8.3
2000		6,228		5,872		5.7		2,766		2,628		5.0		2,100		1,949		7.2
2001		6,364		5,963		6.3		2,799		2,662		4.9		2,104		1,942		7.7
2001 Q4		6,399		5,965		6.8		2,814		2,674		5.0		2,107		1,918		9.0
2002 Q1		6,454		5,996		7.1		2,837		2,691		5.2		2,125		1,936		8.9
2002 Q2		6,479		6,025		7.0		2,857		2,699		5.5		2,147		1,954		9.0
2002 Q3		6,558		6,083		7.2		2,888		2,736		5.3		2,171		1,996		8.1

Source: Statistics Canada, The Labour Force.

(1) Unemployment levels are calculated using the difference between Labour Force and Employment for the quarters.

On a year-over-year basis, employment has increased steadily since 1993, although more so since 1997. The labor force has also grown steadily since 1993 (on a year-over-year basis). Employment rose by 0.8% in 1996, while the labor force increased by 1.0% over the same period. Employment then averaged more than two percent growth, growing by 2.3%, 2.7%, 2.8% and 2.6% respectively in 1997 to 2000, before slowing to 1.1% in 2001. Growth in the labor force was not as strong, registering growth of 1.7%, 1.8%, 2.0%, 1.8%, 1.5% in 1997 through 2001 respectively. Year-over-year employment growth in 2002 to date was 1.0% in the first quarter, 1.7% in the second quarter and 2.6% in the third quarter. Growth in the labor force was 1.9%, 2.3% and 3.1% respectively over the same period.

After its most recent peak of 11.4% in 1993, the unemployment rate has generally trended downward through 2000. The unemployment rate bottomed out at 6.8% in 2000 and rose to 7.2% in 2001. The unemployment rate reached a peak of 7.8% in the first quarter of 2002, fell to 7.6% in the second quarter and remained at this level in the third quarter.

EXTERNAL TRADE

Canada has been successful in implementing its trade goals of freer and more open markets based on internationally-agreed rules and practices at multilateral, regional and bilateral levels.

At the multilateral level, Canada continues to be an active member of the World Trade Organization (“WTO”) and is fully participating in multilateral trade negotiations launched in Doha, Qatar in November 2001. Since the conclusion of the last round of multilateral trade negotiations in 1995, Canada has taken a number of actions to liberalize its trade regimes. Canada has reduced tariffs on a wide range of products and also expanded product coverage for duty-free access for products of least-developed countries. The WTO has served as a forum for trade negotiations, including the accession of new members, the pursuit of sectoral liberalization (such as the post-Uruguay Round WTO Ministerial Declaration on Trade in Information Technology Products — Information Technology Agreement and the Fifth Protocol to the General Agreement on Trade in Services — Financial Services Agreement), and the current Doha mandated negotiations, including non-agricultural market access negotiations. Also, Canada continues to participate fully in the ongoing agriculture and services negotiations.

At the regional level, Canada is a member of the North American Free Trade Agreement (“NAFTA”) with both the United States and Mexico, and has been active in reducing with a view to eliminating tariffs and non-tariff barriers, as well as creating disciplines on the regulation of investment, services, intellectual property, competition and the temporary entry of business persons. All originating goods between Canada and the US trade are duty free and virtually all tariffs on trade in originating goods between Canada and Mexico are to be eliminated by January 1, 2003. Canada is also one of the 34 democratic countries in the hemisphere currently engaged in negotiating the Free Trade Area of the Americas Agreement. The negotiations, launched in April 1998, hold the potential to create the world’s largest free trade area, with 800 million people and a combined gross domestic product of nearly $17 trillion. Canada is also an active participant in the broader hemispheric Summit of the Americas initiative that addresses social development, including the promotion of democracy, sustainable development, protection of the environment, human rights and poverty reduction.

At the bilateral level, since 1997, Canada has had a free trade agreement with Israel covering trade in goods. On originating goods between Canada and Chile, tariffs continue to be eliminated under the 1997 Canada-Chile Free Trade Agreement such that virtually all tariffs will be eliminated by 2003. Canada signed a free trade agreement with Costa Rica in April 2001 which was implemented in November 2002, and is engaged in free trade negotiations with the Central American Four (Honduras, Nicaragua, Guatemala and El Salvador) and with Singapore. Canada is also engaged in trade negotiations with the European Free Trade Association (“EFTA”) countries (Switzerland, Norway, Iceland and Liechtenstein). As well, Canada is exploring the possibility of free trade negotiations with the Dominican Republic and five Andean nations (Columbia, Bolivia, Ecuador, Venezuela and Peru).

Merchandise Trade

The following table sets forth the composition of Canadian trade for the periods indicated.

THE COMPOSITION OF CANADIAN MERCHANDISE TRADE

(Balance of Payments Basis)



		First 3 quarters (2)				For the years ended December 31,

		2002		2001		2001		2000		1999		1998		1997


		(in millions)
Value of Exports
	Wheat	$	2,459	$	2,703	$	3,807	$	3,609	$	3,356	$	3,642		5,052
	Other agricultural products		18,720		18,084		24,310		21,303		19,484		18,148		17,234
	Crude petroleum		12,992		12,276		15,370		19,166		11,017		7,830		10,366
	Natural gas		13,389		22,199		25,595		20,537		10,951		8,967		8,626
	Ores and metals		21,051		19,334		25,763		26,471		23,434		25,308		26,062
	Lumber		8,198		8,670		11,392		12,045		13,154		11,529		12,876
	Pulp and paper		9,539		11,417		14,645		16,504		13,440		12,898		13,254
	Other materials		51,363		54,686		70,850		70,435		59,713		55,140		50,220
	Motor vehicles		52,108		49,713		65,862		69,676		70,459		55,859		50,127
	Motor vehicle parts		21,998		20,153		26,999		28,436		26,833		22,603		19,343
	Machinery		14,665		14,388		19,231		18,790		17,059		17,491		15,371
	Other end products		69,285		73,384		96,474		103,907		84,553		75,778		64,289
	Special transactions		10,857		10,915		14,339		14,708		13,718		11,969		10,558

	TOTAL EXPORTS (1)	$	306,624	$	317,922	$	414,638	$	425,587	$	367,171	$	327,162	$	303,378

Value of Imports
	Edible products	$	15,351	$	14,193	$	19,072	$	17,390	$	16,552	$	16,093	$	14,547
	Crude petroleum		8,366		10,478		12,815		13,437		7,160		5,227		7,189
	Other crude materials		6,481		6,129		8,125		8,041		7,156		7,249		6,982
	Fabricated materials		51,800		52,966		69,444		71,091		62,412		60,113		54,508
	Motor vehicles		27,331		23,517		31,810		32,475		30,242		27,283		26,287
	Motor vehicle parts		33,304		30,783		40,735		44,956		45,692		39,506		34,539
	Machinery and equipment		78,961		86,653		112,422		122,787		108,248		101,124		91,339
	Other end products		34,423		32,141		42,927		40,109		36,999		34,576		29,766
	Special transactions		9,232		10,005		13,274		13,147		12,501		12,226		12,569

	TOTAL IMPORTS (1)	$	265,248	$	266,864	$	350,623	$	363,432	$	326,961	$	303,399	$	277,727

Source: Statistics Canada, Canadian International Merchandise Trade.

(1) May not add to total due to rounding.

(2) Seasonally adjusted.

Canada is one of the leading trading nations of the world. Canada’s exports have always reflected the country’s high endowment in natural resources. However, Canada has been diversifying its exports over time, relying less on commodities and more on finished goods. The value of commodity exports as a share of total exports dropped from 69% in 1980 to 45.0% in the first three quarters of 2002. Over this period the increase in exports of finished goods was led by automotive and miscellaneous end products. Canada’s imports consist mostly of manufactured goods; the two main components are machinery and equipment and automotive products.

Canada and the United States are each other’s largest trading partners, reflecting the physical proximity of the two countries and their close economic and financial relationship. In 2001, trade with the United States accounted for 84.6% of the value of Canada’s merchandise exports and 72.7% of the value of Canada’s merchandise imports. According to the United States Department of Commerce, trade with Canada accounted for 22.7% of the United States’ exports and 19.1% of its imports in 2001.

GEOGRAPHICAL DISTRIBUTION OF CANADIAN MERCHANDISE TRADE

(Balance of Payments Basis)



		First 3 quarters						For the years ending December 31,

		2002			2001			2001			2000			1999			1998			1997

Exports (1)
	United States		84.9	%		84.8	%		84.6	%		84.5	%		84.2	%		82.3	%		79.9	%
	Japan		2.3			2.3			2.3			2.5			2.7			3.0			3.9
	United Kingdom		1.5			1.6			1.6			1.6			1.6			1.6			1.5
	European Union (2)		3.7			3.8			3.8			3.8			3.8			4.3			4.4
	Other		7.6			7.5			7.7			7.6			7.7			8.8			10.2

			100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Imports (1)
	United States		71.9	%		72.8	%		72.7	%		73.7	%		76.3	%		77.1	%		76.1	%
	Japan		3.3			3.0			3.0			3.2			3.2			3.2			3.1
	United Kingdom		2.9			3.4			3.4			3.4			2.4			2.0			2.2
	European Union (2)		7.2			6.5			6.6			5.8			6.4			6.3			6.5
	Other		14.8			14.4			14.2			13.9			11.8			11.4			12.0

			100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Source: Statistics Canada, Canadian International Merchandise Trade.


(1)	May not add to total due to rounding.
(2)	Excludes the United Kingdom. Includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain and Sweden.

The following table presents volume and price indices of Canada’s merchandise trade for the periods indicated.

MERCHANDISE TRADE INDICES

(Balance of Payments Basis)



		First 3 quarters				For the years ending December 31,

		2002		2001		2001		2000		1999		1998		1997


		(1997 = 100)
Indices of physical volume
	Exports		127.0		126.2		125.6		130.9		120.6		108.5		100.0
	Imports		118.9		119.6		117.9		125.4		115.1		106.1		100.0
Indices of prices
	Exports		106.1		110.6		108.8		107.1		100.3		99.4		100.0
	Imports		107.1		107.2		107.1		104.4		102.3		103.0		100.0
	Terms of trade (1)		99.1		103.2		101.6		102.6		98.0		96.5		100.0

Source: Statistics Canada, National Income and Expenditure Accounts.

(1) Index of price of exports divided by index of price of imports multiplied by 100.

BALANCE OF PAYMENTS

The following table presents the balance of international payments for the periods indicated.

BALANCE OF INTERNATIONAL PAYMENTS



					First 3 quarters (1)				For the years ending December 31,

					2002		2001		2001		2000		1999		1998		1997


					(in millions of dollars)
CURRENT ACCOUNT
	RECEIPTS
		Goods and services			$	349,137	$	360,657	$	471,250	$	482,731	$	420,210	$	377,385	$	347,133
			Goods			306,624		317,924		414,638		425,587		367,171		327,162		303,378
			Services			42,513		42,733		56,612		57,144		53,039		50,223		43,755
		Investment income				21,657		27,848		34,990		39,815		32,913		32,338		33,252
		Current transfers				4,968		5,167		7,024		6,097		5,644		5,054		5,029
			Current account receipts			375,762		393,672		513,264		528,643		458,767		414,777		385,415
	PAYMENTS
		Goods and services				313,921		316,284		415,617		427,997		387,152		359,948		330,346
			Goods			265,248		266,864		350,623		363,432		326,961		303,399		277,727
			Services			48,673		49,420		64,994		64,565		60,191		56,549		52,619
		Investment income				42,893		47,998		62,524		68,241		64,983		61,965		62,133
		Current transfers				3,797		3,770		5,074		4,624		4,636		4,228		4,333
			Current account payments			360,611		368,050		483,216		500,862		456,771		426,140		396,812
	BALANCE
		Goods and services				35,217		44,374		55,633		54,735		33,058		17,438		16,788
			Goods			41,377		51,060		64,016		62,155		40,210		23,763		25,652
			Services			-6,160		-6,686		-8,382		-7,421		-7,152		-6,325		-8,864
		Investment income				-21,237		-20,150		-27,534		-28,427		-32,070		-29,627		-28,882
		Current transfers				1,171		1,398		1,949		1,473		1,008		826		697
			Current account balance			15,151		25,622		30,049		27,781		1,996		-11,363		-11,397
CAPITAL AND FINANCIAL ACCOUNT
	CAPITAL ACCOUNT					4,112		4,661		5,678		5,270		5,049		4,934		7,508
	FINANCIAL ACCOUNT					-8,800		-19,864		-26,596		-26,788		-18,241		-405		8,256
	CANADIAN ASSETS, NET FLOWS
		Canadian direct investment abroad				-28,486		-47,270		-54,924		-70,545		-23,182		-50,957		-31,937
		Portfolio investment				-19,766		-32,674		-37,718		-62,274		-23,067		-22,497		-11,849
			Foreign bonds			-6,251		-2,195		-1,882		-3,958		-2,477		-7,064		-6,642
			Foreign stocks			-13,514		-30,479		-35,836		-58,316		-20,590		-15,433		-5,207
		Other investment				-2,449		6,917		-17,743		-9,610		5,540		6,292		-18,760
			Loans			-1,217		-1,201		-7,873		-5,125		2,680		12,637		-18,923
			Deposits			3,671		12,585		-1,365		3,977		10,594		-6,225		-2,898
			Official international reserves			-261		-2,225		-3,353		-5,480		-8,818		-7,452		3,389
			Other assets			-4,642		-2,240		-5,152		-2,981		1,084		7,332		-328

			Total Canadian assets, net flows			-50,702		-73,027		-110,385		-142,429		-40,710		-67,161		-62,546
	CANADIAN LIABILITIES, NET FLOWS
		Foreign direct investment in Canada				26,062		30,755		42,527		98,940		36,306		33,828		15,958
		Portfolio investment				5,357		9,660		30,868		14,025		3,255		24,779		16,181
			Canadian bonds			9,282		15,116		33,609		-22,655		2,310		10,337		6,166
			Canadian stocks			-3,783		3,718		4,608		34,973		14,063		14,311		7,645
			Canadian money market			-142		-9,175		-7,349		1,707		-13,118		130		2,369
		Other investment				10,484		12,748		10,394		2,677		-17,092		8,149		38,664
			Loans			407		154		-7,730		2,781		6,470		3,181		1,873
			Deposits			13,828		16,171		23,469		-1,069		-23,995		3,375		34,106
			Other liabilities			-3,751		-3,577		-5,345		965		433		1,593		2,685

			Total Canadian liabilities, net flows			41,903		53,162		83,789		115,641		22,468		66,757		70,803

				Total capital and financial account, net flow		-4,689		-15,204		-20,918		-21,518		-13,192		4,530		15,764
	Statistical discrepancy					-9,823		-10,695		-9,130		-6,264		11,196		6,833		-4,367

Source: Statistics Canada, Canada’s Balance of International Payments.

(1) Year-to-date. Current account data are seasonally adjusted. Capital account data are not seasonally adjusted.

Canada’s current account balance improved from a deficit of $11.4 billion in 1997 to a surplus of $30.0 billion in 2001. The current account maintained an average surplus of $20.2 billion (seasonally adjusted, annualized level) in the first three quarters of 2002. Over the period since 1997, the three main components of the current account have evolved as follows:


	(1) The merchandise trade surplus increased from $25.7 billion in 1997 to $64.0 billion in 2001. In the first three quarters of 2002, the merchandise trade surplus averaged $55.2 billion (annualized level).
	(2) The service account deficit improved from $8.9 billion in 1997 to $8.4 billion in 2001. The services deficit averaged $8.2 billion (annualized level) in the first three quarters of 2002.
	(3) The deficit on net investment income payments narrowed from $28.9 billion in 1997 to $27.5 billion in 2001. The investment income deficit averaged at $28.3 billion in the first three quarters of 2002 (annualized level).

Low inflation, a depreciation of the Canadian dollar and good economic growth in the United States contributed to the increase in the merchandise trade surplus through 2001. The recent economic slowdown in the United States has hindered further increases in the first three quarters of 2002.

In 1997 and 1998, the net inflow in the capital and financial account stood at $15.8 billion and $4.5 billion respectively. Following that, Canada registered net outflows of $13.2 billion, $21.5 billion and $20.9 billion in 1999, 2000 and 2001. The net inflow in the first three quarters of 2002 averaged $6.3 billion (annualized level).

Various Canadian financial instruments were acquired by non-residents during the 1990s and early 2000s. Non-resident net purchases of Canadian bonds, stocks, and money market instruments amounted to $16.2 billion and $24.8 billion in 1997 and 1998. After dipping to $3.3 billion in 1999, purchases of Canadian financial instruments increased again to $14.0 billion in 2000 and $30.9 billion in 2001. The first three quarters of 2002 saw net purchases of Canadian bonds, stocks and money market instruments average $7.1 billion (annualized level).

Foreign direct investment in Canada rose from $16.0 billion in 1997 to $98.9 billion in 2000 before sliding to $42.5 billion in 2001. Foreign direct investment in the first three quarters of 2002 averaged at $34.7 billion (annualized level).

FOREIGN EXCHANGE AND INTERNATIONAL RESERVES

Since May 31, 1970 the Canadian dollar has been allowed to float so that the rate of exchange is determined by conditions of supply and demand in the market. During this period, the Canadian dollar has floated between a high of 104.43 U.S. cents that occurred in April 1974 and a low of 61.79 U.S. cents in January 2002. The dollar closed 2001 at 62.78 U.S. cents. In 2002 through November 30, trading has been in a range of 61.79 to 66.54 U.S. cents; the dollar closed at 63.90 U.S. cents on November 30, 2002.

EXCHANGE RATE FOR THE CANADIAN DOLLAR



			For the years ended December 31,
	2002 through
	November 30		2001	2000	1999	1998	1997	1996	1995	1994	1993	1992


	(in U.S. cents)
High		66.54	67.11	69.84	69.35	71.23	74.93	75.26	75.33	76.42	80.65	87.71
Low		61.79	62.30	63.97	64.62	63.11	69.45	72.12	70.09	70.97	74.16	77.29

Source: Bank of Canada.

Canada does not have foreign exchange controls. Foreign exchange operations conducted by the Bank of Canada on behalf of the Minister of Finance are directed toward the maintenance of orderly conditions in the foreign exchange market in Canada through the purchase or sale of United States dollars for Canadian dollars. The following table shows Canada’s official international reserves on the dates indicated.

CANADA’S OFFICIAL INTERNATIONAL RESERVES



			At December 31,
	At November 30,
	2002		2001		2000		1999		1998		1997		1996		1995		1994		1993		1992


	(in millions of U.S. dollars)
Total		36,501		34,248		32,424		28,646		23,427		17,969		20,578		15,227		12,475		12,776		11,909

Source: Department of Finance.

Canada’s official reserves at November 30, 2002 consisted of United States dollars in the amount of U.S.$18,419 million, U.S.$218 million in gold (valued at U.S.$319.05 per fine ounce), U.S.$3,265 million in the form of the reserve position in the International Monetary Fund (“IMF”), U.S.$697 million in Special Drawing Rights (“SDRs”) and U.S.$13,902 million in other convertible currencies.

Beginning in 1978 transactions relating to foreign currency debt undertaken for reserve management purposes have had an important effect on the level of official reserves. The Government maintains a U.S.$6,000 million standby credit facility with a group of foreign banks. Since August 31, 1986 no drawings have been outstanding on the standby credit facility. The ”Canada Bills” program was launched in October 1986. Under this program U.S. dollar-denominated short-term notes are issued in the United States money market. There were U.S.$1,856 million of Canada Bills outstanding on September 30, 2002. The “Canada Notes” program was launched in March 1996. Canada Notes are interest-bearing marketable notes that mature not less than nine months from their date of issue. As of September 30, 2002, there was a total of U.S.$859 million equivalent of Canada Notes outstanding. A Euro Medium Term Note program was launched in March 1997. As of September 30, 2002, there was a total of U.S.$2,062 million equivalent of Euro Medium Term Notes outstanding. As of September 30, 2002, there was a total of U.S.$11,567 million equivalent of other marketable bonds, comprised of 8 global bond issues and 5 Petro Canada bond issues assumed by the Government of Canada on February 5, 2001, on the dissolution of Petro Canada Limited.

GOVERNMENT FINANCES

Introduction

The financial structure of the Government of Canada rests on a constitutional and statutory framework dating back to the British North America Act, 1867. That Act, which has been renamed the Constitution Act, 1867, gave constitutional foundation to the principles of financing that are basic to responsible government, while other necessary financial administrative machinery and procedures were established by subsequent legislation, most notably the Financial Administration Act. The proclamation in 1982 of the Constitution Act, 1982 terminated British legislative jurisdiction over Canada’s Constitution in accordance with an amending formula that permits amendment of the Constitution without resorting to the Parliament of the United Kingdom.

Within the confines of the Constitution, the authority of Parliament is supreme. Ultimate control of the public purse and the financial structure of the Government rests with Parliament. This is reflected in the fundamental principles that no tax shall be imposed and no money shall be spent without the authority of Parliament, and that expenditures shall be made only for the purposes authorized by Parliament.

Public money received by the Government is deposited in the Consolidated Revenue Fund of Canada. Withdrawals of public money out of the Consolidated Revenue Fund may not be made without the authority of Parliament.

The Government has two major sources of money: tax and non-tax revenues and borrowing. The main sources of revenue are personal and corporate income taxes, employment insurance premiums, and excise taxes and duties. These revenues are authorized by specific acts passed by Parliament. The other major source of money to finance Government operations is borrowing. Borrowing limits are established by acts of Parliament. The main sources of borrowing are marketable bonds, treasury bills and Retail Debt.

Parliament authorizes the disbursement of moneys out of the Consolidated Revenue Fund by means of Appropriation Acts passed on an annual basis by Parliament and based on the Main Estimates submitted by the various departments. In addition to the Appropriation Acts, authority for payments may also be found in certain statutes which authorize certain payments out of the Consolidated Revenue Fund. Expenditures for public debt charges, social security payments and transfers to other levels of government are authorized in this way. Appropriations may also be made by the Governor in Council for urgent payments. Such appropriations may be made only when Parliament is not in session, and must be laid before Parliament during the subsequent session.

Information on the Government’s planned revenues and expenditures is presented to Parliament primarily in two documents: the Budget and the Main Estimates, which are both presented in the House of Commons. The Budget, which may be delivered at any time during the fiscal year, provides the occasion on which the Minister of Finance generally brings under review the whole financial position of the Government, present and prospective, and announces the Government’s plans and proposals. The Main Estimates are tabled (i.e., introduced) once each year and outline the Parliamentary authority, either existing or required, for disbursements. Supplementary Estimates may also be tabled during the year to provide authority for spending as the need arises.

The considerations for overall resource availability and demands for new policies and programs are reconciled through the establishment of a two year Fiscal Plan reflecting Government priorities. This Fiscal Plan, which is presented with the Budget, establishes an expenditure framework, in which the Cabinet establishes priorities. This ensures that expenditure decisions are made within the context of Government priorities and do not exceed the provision for such expenditures set out in the expenditure framework. The Government also releases an Economic and Fiscal Update in the fall for pre-budget consultation purposes.

The reporting entity of the Government of Canada includes all departments, agencies, corporations and funds which are owned or controlled by the Government and which are accountable to Parliament. The

financial activities of all departments, agencies, corporations and funds are consolidated in the Government’s financial statements, except for enterprise Crown corporations and other government business enterprises which are not dependent on the Government for financing their activities. For these corporations, the Government reports in its financial statements only the cost of its investment and an allowance for valuation which includes their annual net profits and losses. In addition, any amounts receivable from or payable to these corporations are reported.

The primary source of information on all actual financial transactions of the Government is the Public Accounts of Canada, which are required by the Financial Administration Act to be tabled in Parliament each year. The other chief accountability reports are the statements of budgetary and non-budgetary financial transactions and of the Government’s cash and debt position published monthly in The Fiscal Monitor and in the Annual Financial Report.

Fiscal Policy

The era of chronic deficits and rising debt began in 1974 when productivity and economic growth declined from the buoyant trend of prior decades. One effect of this fundamental shift that had taken place in the economy was to reduce the underlying rate of growth of tax revenues, while expenditure growth remained strong. Consequently, the divergence between expenditure and revenue trends produced an uninterrupted string of deficits until fiscal 1997-98.

The severity of the 1982 recession resulted in a sharp increase in the deficit in fiscal 1982-83, eventually peaking at $38.4 billion or 8.5% of GDP in fiscal 1984-85. During the middle to late 1980s, the Government instituted a number of measures to increase revenues and constrain the growth in expenditures. These measures, in conjunction with the sustained recovery from the 1982 recession, helped to lower the deficit by about half relative to GDP by fiscal 1990-91. Further progress was arrested by the onset of the recession in 1990, which proved to be much longer and more severe than expected. While the measures to control spending succeeded in preventing government expenditures from increasing substantially in response to the recession, the sluggish recovery and the lagged impact of the recession resulted in substantial declines in budgetary revenues. This caused the deficit to increase to $42.0 billion, or 5.8% of GDP, in fiscal 1993-94.

Since 1993, the Government’s fiscal objective has been to balance the budget. Implicit in this objective was the need to halt the rise in the debt-to-GDP ratio and to put it on a permanent downward track. The actions taken in the 1994, 1995, and 1996 budgets resulted in the elimination of that deficit in just four years. In fiscal 1997-98, a budgetary surplus of $3.8 billion was recorded for the first time in 28 years. This was followed by a surplus of $3.1 billion in fiscal 1998-99, a surplus of $12.7 billion in fiscal 1999-2000, a record surplus of $18.1 billion in fiscal 2000-01 and a surplus of $8.9 billion in fiscal 2001-02. Coupled with economic growth, the fiscal turnaround has also led to a fall in the net public debt as a share of GDP of 21.8 percentage points to 49.1% in fiscal 2001-02, from the peak of 70.9% in fiscal 1995-96. This is the sixth consecutive year in which the debt-to-GDP ratio has declined.

This turnaround in federal finances underlined the soundness of the Government’s Debt Repayment Plan — basing budget plans on two-year rolling fiscal targets, economic planning projections based on the average of the private sector economic forecasts backed by fiscal prudence and fiscal forecasts backed by a Contingency Reserve and adopting policies which have engendered economic growth and job creation. Prudence is of two types — the Contingency Reserve and economic prudence. Prudence in budget planning has meant that budgetary balance targets have been consistently bettered in each and every year. The Contingency Reserve of $3.0 billion per year provides an extra measure of back-up against adverse errors in the economic forecast. Under the Debt Repayment Plan, the Contingency Reserve, if not needed, will be used to pay down the public debt. It is not a source of funds for new policy initiatives. Economic prudence provides an extra measure of back-up to ensure that the fiscal target is met. The economic prudence grows over time.

The budgetary deficit/surplus — the budgetary balance — is the most comprehensive measure of the Government’s financial situation as it includes liabilities incurred by the Government regardless of when the actual cash payment is made. It is largely presented on an accrual basis of accounting. However, it is only one measure of the Government’s financial position.

Another important measure is financial requirements/surplus. This measures the difference between cash coming into the Government and cash payments made for programs and public debt charges during the year. Thus financial requirements do not include any liabilities incurred by the Government during the year for which no cash payment has been made during the year. Financial surpluses have now been recorded in each of the past six fiscal years. This is in contrast to the large financial requirements observed from the mid-1970s through to the mid-1990s. As a result of the financial surpluses, the Government has retired $34.6 billion of market debt since fiscal 1996-97.

Summary Statement of Transactions

The financial transactions of the Government are classified into four main categories: budgetary, non-budgetary, foreign exchange and unmatured debt transactions. In general terms, budgetary transactions are those which enter into the calculation of the annual surplus or deficit while other transactions lead to the acquisition or disposal of financial claims or to the creation or discharge of financial obligations.

The Summary Statement of Transactions table below sets out the source and use of financial resources for the years shown.

SUMMARY STATEMENT OF TRANSACTIONS



			For the years ended March 31,

			2002		2001		2000		1999		1998


			(in millions)
BUDGETARY TRANSACTIONS
	Revenues		$	173,315	$	179,590	$	166,123	$	155,899	$	153,501
	Program expenditures			–126,673		–119,348		–111,763		–111,393		–108,753
		Operating surplus or deficit ( – )		46,642		60,242		54,360		44,506		44,748
	Public debt charges			-37,735		–42,094		–41,647		–41,394		–40,931

		Surplus or deficit ( – )		8,907		18,148		12,713		3,112		3,817

NON-BUDGETARY TRANSACTIONS
	Loans, investments and advances			–96		–2,698		–617		330		1,605
	Pensions and other accounts			–1,669		1,303		6,968		7,024		3,829
	Other transactions			–2,445		2,238		–4,498		1,025		3,478

		Net source		4,210		843		1,853		8,379		8,912
		Financial requirements ( – ) or source
		(excluding foreign exchange transactions)		4,697		18,991		14,566		11,491		12,729
FOREIGN EXCHANGE TRANSACTIONS				–1,776		–8,776		–6,826		–5,700		–2,155

TOTAL FINANCIAL REQUIREMENTS ( – ) OR SOURCE				2,921		10,215		7,740		5,791		10,574

UNMATURED DEBT TRANSACTIONS				–4,132		–10,003		–4,021		–6,864		–9,561

CHANGE IN CASH BALANCE				–1,211		212		3,719		–1,073		1,013

CASH BALANCE AT END OF PERIOD (1)			$	12,026	$	13,237	$	13,025	$	9,306	$	10,379


Source:	Public Accounts of Canada 2002.

(1) Numbers do not add up due to rounding.

Budgetary Revenue

The Government reports revenue in the year in which it is received. Refunds are allocated to the year in which they are actually paid. Personal income taxes accounted for about 51% and corporate income taxes accounted for about 15% of tax revenue in fiscal 2001-02.

The Government announced important changes in personal and corporate income tax rates in the budget of February 28, 2000 and the Economic Statement and Budget Update of October 18, 2000.

Prior to the 2000 announcements, the federal personal income tax rate structure had three brackets. The bracket thresholds, together with many credits and other limits, were indexed for inflation, but since the

beginning of 1986, only for the percentage change in the CPI exceeding 3%. The February 2000 budget restored full indexation of the federal personal income tax system effective January 1, 2000. As a result, for 2002 the basic personal exemption is $7,634. Regardless of inflation, the basic personal exemption will be no less than $8,000 by 2004.

The October 2000 budget update added changes that took effect in 2001. The rates for the existing three brackets were reduced to 16%, 22% and 26%. A new fourth bracket at the 29% rate applied to taxable income in excess of $100,000, which is to rise to no less than $113,804 by 2004. For 2002 the tax thresholds, accounting for indexing, are 16% for income up to $31,676, 22% for income between $31,677 and $63,353, 26% for income between $63,354 and $102,999 and 29% for income $103,000 and higher. The 5% high-income surtax was eliminated. The education tax credit, the disability tax credit, the supplement to the disability tax credit and the caregiver and infirm dependent tax credits were all increased. By 2004, the credit for a dependent spouse or common-law partner credit will be no less than $6,800.

The 2001 budget included additions such as an apprentice vehicle mechanics tools tax deduction, a tax deduction for tuition assistance for adult basic education, the extension of the education tax credit, improved tax incentives for renewable energy and energy efficiency, promotion of sustainable woodlot management and changes to deductibility of meal costs at construction work camps.

The general federal corporate income tax rate in Canada in 1999 was 28%. The federal corporate tax rate is 21% for manufacturing and processing income and 12% for the first $200,000 of active business income earned by a Canadian-controlled private corporation. Most corporations are also subject to a federal surtax equal to 4% of their federal income tax liability (computed without reference to the small business deduction and most tax credits). The large corporations tax is 0.225% of taxable capital employed in Canada in excess of $10 million. The 4% surtax may be credited against the large corporations tax liability. An additional capital tax (effectively a minimum tax since it is creditable against basic income tax) is levied on large financial institutions.

The February 2000 budget reduced the general corporate tax rate to 27% beginning in 2001. The October 2000 budget update further reduced the rate to 25% for 2002, 23% for 2003 and 21% after 2003. The budget also reduced the rate on small business income between $200,000 and $300,000 to 21% beginning in 2001.

The 2001 budget allowed small businesses to defer for 6 months payments of corporate tax instalments for January, February and March 2002 without interest or penalties. All corporations with taxable capital that did not exceed $15 million qualified for this deferral.

Prior to the February 2000 budget, capital gains were taxed to individuals and corporations at three-quarters of the rate applicable to other income. The February 2000 budget reduced this inclusion rate to two-thirds, effective February 28, 2000. The October 2000 budget update reduced the rate further to one-half, effective October 18, 2000.

The Government imposes a broad based value-added tax, the Goods and Services Tax (“GST”), at a rate of 7%, to most goods and services. Food for home consumption, prescription drugs, residential rents, sales of existing houses, educational services and health care services are generally not subject to the GST. Excise taxes and duties are imposed on selected goods, such as tobacco, alcoholic beverages and gasoline. The Government also imposes customs duties on a wide range of goods.

In addition, the Government obtains non-tax revenues in the form of returns on investment from a number of its Crown corporations. Receipts from sales of goods and services, fees and permits are other sources of revenue.

The following table sets forth budgetary revenue for the years shown.

DETAILED STATEMENT OF TRANSACTIONS — BUDGETARY REVENUES



		For the years ended March 31,

		2002		2001		2000		1999		1998


		(in millions)
TAX REVENUES
	Personal income tax	$	83,790	$	83,305	$	79,793	$	72,716	$	71,126
	Corporate income tax		24,013		28,212		23,170		21,575		22,496
	Employment insurance premium revenues		17,980		18,731		18,512		19,363		18,802
	Other income tax revenues		3,035		4,312		3,499		2,901		2,974
	Goods and services tax		24,909		24,990		22,790		20,684		19,461
	Customs import duties		3,018		2,807		2,105		2,359		2,766
	Other		8,711		8,319		7,991		8,356		8,633

	Total tax revenues		165,456		170,676		157,860		147,954		146,258
NON-TAX REVENUES			7,859		8,914		8,263		7,945		7,243

TOTAL BUDGETARY REVENUES		$	173,315	$	179,590	$	166,123	$	155,899	$	153,501


Source:	Public Accounts of Canada 2002.

Budgetary Expenditures

Budgetary expenditures encompass the cost of servicing the public debt, the operating and capital expenditures of Government departments and agencies, grants and contributions to other levels of government, organizations and individuals, and subsidies.

Transfer payments includes a range of federal social spending programs designed to enhance the quality of life of Canadians, particularly those who have modest incomes or who are disadvantaged. It includes income support — most notably for the elderly and unemployed; transfers to the provinces for health, education and social assistance; and programs for aboriginal Canadians.

The following table sets forth budgetary expenditures, including federal social spending, for the years shown.

DETAILED STATEMENT OF TRANSACTIONS — BUDGETARY EXPENDITURES



				For the years ended March 31,

				2002		2001		2000		1999		1998


				(in millions)
PROGRAM EXPENDITURES
	Transfer payments
		Old age security benefits, guaranteed income supplements and spouses’ allowances		$	25,365	$	24,256	$	23,410	$	22,781	$	22,225
		Employment insurance benefits			13,748		11,444		11,301		11,884		11,842
		Canada health and social transfer			17,300		13,500		14,891		16,018		12,421
		Fiscal arrangements			11,603		12,467		10,721		11,645		10,000
		Other transfers to governments			375		217		—		2		162
		Canada Assistance Plan			—		—		56		8		24
		Education support			—		—		—		—		5
		Alternative payments for standing programs			-2,662		–2,460		–2,425		–2,150		–2,108
		Other transfer payments			19,854		23,503		18,535		18,735		22,476

			Total transfer payments		85,583		82,927		76,489		78,923		77,047

	Crown corporations expenditures				4,082		2,903		2,953		3,497		2,548
	Other program expenditures
		Defence			10,571		9,696		10,201		8,781		8,879
		All other departments and agencies			26,437		23,822		22,120		20,192		20,279

			Total other program expenditures		37,008		33,518		32,321		28,973		29,158

	Total program expenditures				126,673		119,348		111,763		111,393		108,753
PUBLIC DEBT CHARGES					37,735		42,094		41,647		41,394		40,931

TOTAL BUDGETARY EXPENDITURES				$	164,408	$	161,442	$	153,410	$	152,787	$	149,684

Source: Public Accounts of Canada 2002.

Loans, Investments and Advances

Loans, investments and advances by the Government resulted in a net requirement of funds of $96 million in fiscal 2001-02.

Pension and Other Accounts

The Government acts as an insurer and/or administrator of a number of pension funds and annuities and deposit and trust accounts. The excess of receipts over disbursements in these accounts has provided the Government with an important source of financing. The balance outstanding of these accounts amounted to $141.2 billion at March 31, 2002. The public sector pensions comprised 90% of the outstanding balance at March 31, 2002.

Canada Pension Plan. The Canada Pension Plan (the “Plan”) is a federal-provincial program for compulsory and contributory social insurance. It operates in all parts of Canada, except for Quebec which has a comparable program. The Government administers the Plan under joint control with the participating provinces. Until 1997, the Plan was financed on an essentially pay-as-you-go basis, which means that pensions and benefits were paid out of current contributions (with some interest earned by the Canada Pension Plan Investment Fund). In December 1997, the Government passed legislation to ensure that the Plan remains sustainable over the long term and to allow fuller funding. Changes included a more rapid increase in contribution rates, a new investment policy, as well as changes to calculations of, and eligibility criteria to, some benefits. Under the new investment policy which came into effect April 1, 1998, the Plan’s funds are prudently invested by an independent investment board in a diversified portfolio of securities, including equities, under generally the same rules that apply to other private and public pension funds.

Contributions are paid equally by employers and employees and self-employed workers pay the full amount. In 2002 the combined contribution rate is 9.4%. As a result of changes legislated in 1997, it will rise to 9.9% in 2003 and then remain constant at that level. As administrator, the Government’s authority to spend is limited to the Plan’s net assets of $51.9 billion at March 31, 2002 ($45.7 billion at March 31, 2001). Of these assets, $28.3 billion was invested in securities issued or guaranteed by the provinces and Canada, $14.4 billion was transferred to the Canada Pension Plan Investment Board and $6.8 billion was a direct liability of the Government.

Public Sector Pensions. The Government is responsible for defined benefit pension plans covering substantially all of its full-time employees (including the Public Service, Canadian Forces, Royal Canadian Mounted Police and certain Crown corporations) as well as federally appointed judges and Members of Parliament. Pension benefits are generally calculated by reference to highest earnings for a specific period of time. They are related to years of service and are indexed to inflation. Until March 31, 2000, separate market invested funds were not set aside to provide for payment of these pension benefits. Beginning on April 1, 2000, new employer and employee contributions to the pension plans are transferred to the Public Sector Pension Investment Board. Its goal is to achieve maximum rates of return on investments without undue risk, while respecting the requirements and financial obligations of each of the public sector pension plans. At March 31, 2002 the net liability in respect of these accounts totalled $126.9 billion. This net liability is comprised of the accrued benefit obligation determined as of March 31, 2001, which amounted to $125.9 billion, less pension plan assets of $3.2 billion and unamortized pension adjustments of $8.3 billion. In fiscal 2001-02 the net liability to the public sector pensions decreased by $2.3 billion, mainly due to the transfer of assets to the new Crown pension plans.

Other Transactions

This category includes accounts payable, interest accrued on federal debt, cheques issued but outstanding and other miscellaneous accounts. These transactions, due to their nature, are subject to wide fluctuations. They were a requirement of $4.2 billion in fiscal 2001-02.

DETAILED STATEMENT OF TRANSACTIONS — NON-BUDGETARY TRANSACTIONS



				For the years ended March 31,

				2002		2000		1999		1998		1997


				(in millions)
	LOANS, INVESTMENTS AND ADVANCES
	Crown corporations —
		Lending institutions —
			Canada Deposit Insurance Corporation	$	—	$	—	$	—	$	395	$	460
			Canada Mortgage and Housing Corporation		226		224		223		410		230
			Farm Credit Corporation		578		226		236		836		580
			Business Development Bank of Canada		—		–65		–108		–50		—

					804		385		351		1,591		1,270
		All other Crown corporations —
			Other		89		92		139		–43		–29

					89		92		139		–43		–29

	Total Crown corporations				893		477		490		1,548		1,241

	Other loans, investments and advances —
		Provincial and territorial governments			386		-963		-553		-60		-255
		National governments including developing countries			234		2		198		–476		215
		International organizations			-35		–228		41		–209		1,607
		Portfolio investments			—		—		—		—		59
		Other			-1,466		–1,239		343		–754		–118

	Total other loans, investments and advances				-881		–2,248		29		–1,499		1,508
		Allowance for valuation of assets			-108		–747		–1,136		281		–1,144

	Total loans, investments and advances				-96		–2,698		–617		330		1,605

PENSION AND OTHER ACCOUNTS
		Canada Pension Plan Account (net)			379		174		791		1,222		487
		Public sector pensions (net)			-2,264		839		5,938		4,950		3,252
		Other			216		290		239		852		90

	Total pension and other accounts				-1,669		1,303		6,968		7,024		3,829

OTHER TRANSACTIONS
		Accounts receivable			-396		213		162		–516		381
		Outstanding cheques and warrants			1,240		699		–144		827		–35
		Cash in transit			-324		–1,570		46		–902		–468
		Provincial tax collection agreements account			-1,139		–824		–1,402		1,267		–551
		Other liabilities			-1,826		3,720		–3,167		349		4,151

	Total other transactions				-2,445		2,238		–4,505		1,045		3,388

NET NON-BUDGETARY TRANSACTIONS				$	-4,210	$	843	$	1,853	$	8,379	$	8,912

Source: Public Accounts of Canada 2002.

Foreign Exchange Transactions

Foreign exchange transactions represent all transactions in international reserves held in the Exchange Fund Account (EFA). The objectives of the EFA are to provide general foreign currency liquidity for the Government and promote orderly conditions in the foreign exchange market. The EFA contains foreign currency investments, gold holdings and assets related to Canada’s commitment to the International Monetary Fund.

Unmatured Debt

The Government’s unmatured debt represents financial obligations resulting from the sale of marketable bonds, treasury bills, Canada Savings Bonds, Canada Premium Bonds, Canada Bills, and Canada Notes, as well as from non-marketable obligations issued to the Canada Pension Plan Investment Fund.

Borrowing is one of the two major sources of money available to the Government to finance its operations. The increase in unmatured debt payable in Canadian currency has been broadly consistent with changes in financial requirements. The changes in unmatured debt payable in foreign currency have been associated with developments in foreign exchange markets and related requirements to supplement foreign exchange reserves through foreign borrowing.

UNMATURED DEBT

(Principal Amount Outstanding)



					At March 31,
			At
			Sept. 30,
			2002		2002		2001		2000		1999		1998


			(in millions)
CANADIAN CURRENCY
	Marketable bonds			284,981		292,910		293,879	$	293,250	$	294,914	$	293,987
	Treasury bills			102,200		94,200		88,700		99,850		96,950		112,300
	Canada Savings Bonds			18,354		18,928		21,410		23,876		25,791		30,144
	Canada Premium Bonds			5,129		5,092		4,204		3,023		2,427		61
	Obligations issued to Canada Pension Plan Investment Fund			3,374		3,386		3,403		3,427		4,063		3,456

		Total Canadian currency		414,038		414,516		411,596		423,426		424,145		439,948

FOREIGN CURRENCY (1)
	Canada Bills			2,947		3,355		7,228		6,008		10,171		9,354
	Canada Notes			1,300		1,202		1,580		1,053		1,253		1,665
	Euro Medium Term Note Program			3,273		2,933		3,417		4,038		4,884		1,502
	Other marketable bonds (2)			18,358		19,629		20,488		21,317		19,581		14,590
	Standby credit facilities			—		—		—		—		—		—

		Total foreign currency		25,878		27,119		32,713		32,416		35,889		27,111

TOTAL UNMATURED DEBT			$	439,916	$	$441,635	$	444,309	$	455,842	$	460,034	$	467,059

Source: Bank of Canada.

Marketable bonds are interest-bearing obligations available to all investors generally. In the period April 1, 2002 to September 30, 2002 the Government issued an aggregate of $20,300 million of marketable bonds in Canadian currency and redeemed $28,928 million (including $10,486 million in repurchased and cancelled bonds), for a net decrease of $8,628 million. Treasury bills are obligations issued at a discount with maturities generally of three months, six months and one year. In the period April 1, 2002 to September 30, 2002 the amount of treasury bills outstanding increased by $8,000 million. Canada Savings Bonds are offered to individual Canadian residents and differ from other bonds in that they can be redeemed prior to maturity at the option of the holder for the full face value, plus accrued interest. In the period April 1, 2002 to September 30, 2002 the amount of unmatured Canada Savings Bonds outstanding decreased by $574 million. The Canada Premium Bond is a new retail investment and savings product introduced in 1998 and replaces the Canada Registered Retirement Savings Plan Bond (“Canada RRSP Bond”). It offers a higher interest rate compared to Canada Savings Bonds and is redeemable once a year, on the anniversary of the issue date and during the 30 days thereafter without penalty. In the period April 1, 2002 to September 30, 2002 the amount of unmatured Canada Premium Bonds outstanding increased by $37 million. Obligations issued to Canada Pension Plan Investment Fund are non-marketable. Canada Bills are short-term U.S. dollar-denominated unsecured obligations issued in the U.S. money market with a term to maturity of not more than 270 days. Canada Notes are usually U.S. dollar-denominated interest-bearing marketable notes that mature not less than nine months from their date of issue. The Euro Medium-Term Notes are medium-term notes issued outside the United States and Canada. Notes issued under this program can be denominated in a range of currencies and structured to meet investor demand. The other marketable bonds are comprised of 8 global bond issues and 5 Petro Canada bond issues assumed by the Government of Canada on February 5, 2001, on the dissolution of Petro Canada Limited in U.S. dollars and other foreign currencies.

As part of the Government’s domestic interest rate swap program, outstanding fixed-rate Canadian dollar marketable bonds were converted into floating-rate Canadian dollar liabilities and as of September 30, 2002 $50 million remained outstanding. In the mid 1990’s, Canada implemented an Exchange Fund Account foreign currency swap program. Under these foreign exchange swaps, Canadian dollar liabilities are swapped into liabilities in foreign currencies, allowing Canada to raise foreign exchange reserves cost effectively. As of September 30, 2002, $13,681 million of Canadian dollars have been swapped for U.S.$9,205 million, $13,033 million of Canadian dollars have been swapped for Euro 9,206 million and $111 million Canadian dollars have been swapped for ¥8 billion.

The average rates of interest paid on the unmatured debt outstanding by instrument are set out below.

AVERAGE RATES OF INTEREST



	At March 31,

	2002			2001			2000			1999			1998

Marketable bonds (1)		6.61	%		6.98	%		7.21	%		7.51	%		7.75	%
Treasury bills		2.64			5.31			5.31			4.94			4.41
Canada Savings Bonds		3.23			5.42			5.13			4.28			3.61
Non-marketable bonds and notes (2)		10.16			10.10			10.04			9.39			10.22
Canada Bills		1.75			5.10			5.87			4.81			5.49
Foreign currency notes		2.46			4.15			4.95			4.70			5.87
Total Unmatured Debt		5.56			6.11			6.15			6.70			6.64

Source: Public Accounts of Canada 2002.

(1) Excludes Canada Notes and Euro Medium-Term Notes, but includes other foreign currency marketable bonds.

(2) Includes the bonds for the Canada Pension Plan and the notes for the Canada Health and Social Transfer Supplement.

The following table shows the scheduled repayments in respect of principal and interest on the marketable bonds and notes outstanding at September 30, 2002.

SCHEDULE OF MARKETABLE DEBT REPAYMENTS

(in millions)



	Total Principal and Interest

			Foreign
	Canadian		Currency
For years ended	Currency		Debt
December 31,	Debt(1)		(1)(2)(3)(4)

2002		12,072		210
2003		57,601		4,194
2004		57,111		2,332
2005		33,259		3,120
2006		30,874		2,022
2007-2011		114,334		10,878
2012-2016		39,789		—
2017-2021		33,458		—
2022-2026		39,173		—
2027-2031		33,957		—
2032-2036		13,082		—

Source: Bank of Canada.

(1) Excludes the effect of interest rate swaps and cross currency swaps.

(2) Includes Canada Notes and other foreign currency marketable bonds and notes.

(3) Converted at U.S. $1.00 = $1.5872, Japanese Yen 1.00 = $0.01300, British Pound 1.00 = $2.4894, Danish Krone 1.00 = $0.2111, New Zealand $1.00 = $0.7450, Norwegian Krone 1.00 = $0.2146 and Euro 1.00 = $1.5675, the closing rates on September 30, 2002.

(4) Excludes principal and interest payments on U.S. $312,114,000 of Petro Canada bond issues assumed by the Government of Canada on February 5, 2001, on the dissolution of Petro Canada Limited.

Crown Corporations

Except for enterprise Crown corporations, which are accounted for by the cost method, all Government organizations are accounted for in the financial statements by consolidation. Only certain financial transactions between the Government and enterprise Crown corporations are recorded. All assets and liabilities of agent Crown corporations are, however, assets and liabilities of the Government.

The payment of all money borrowed by agent Crown corporations is a charge on and payable out of the Consolidated Revenue Fund. Such borrowings constitute unconditional obligations of the Government and are recorded as such in the accounts of Canada, net of borrowings expected to be repaid directly by these corporations. Borrowings to be repaid by agent enterprise Crown corporations amounted to $44,361 million as at March 31, 2002. The following table summarizes the unaudited financial information of consolidated and enterprise Crown corporations as at March 31, 2002.

FINANCIAL INFORMATION REGARDING CROWN CORPORATIONS

(in millions)


				Consolidated		Enterprise		Total

Assets
	Total assets			$	4,929	$	120,981	$	125,910

Liabilities
	Liabilities to other than Government
		Borrowings			—		53,103		53,103
		Other			1,799		50,424		52,223

					1,799		103,527		105,326

			Net assets	$	3,130	$	17,454	$	20,584

Financial interest of the Government
		Obligations to the Government		$	1,809	$	9,386	$	11,195
		Net equity of the Government			1,322		8,068		9,390

			Total financial interest	$	3,131	$	17,454	$	20,585

Contingent liabilities				$	56	$	2,651	$	2,707

Source: Public Accounts of Canada 2002.

Contingent Liabilities (with Respect to Guarantees by the Government)

The contingent liabilities of the Government, with respect to guarantees by the Government as at March 31, 2002 are summarized as follows.

CONTINGENT LIABILITIES (WITH RESPECT TO NET EXPOSURE UNDER GUARANTEES)

(in millions)


Guarantees by the Government of
	Borrowings by enterprise Crown corporations which are agents of Her Majesty		$	45,175
	Borrowings by other than Crown corporations
		From agents		370
		From other than agents		3,660
		Other explicit loan guarantees		465
	Insurance programs of the Government			2,757
	Other explicit guarantees			557

		Total gross guarantees		60,914
		Less: allowance for losses		-4,076

Net exposure under guarantees			$	56,838

Source: Public Accounts of Canada 2002.

Insurance Programs

Certain agent Crown corporations operate insurance programs. In the event that such corporations have insufficient funds to meet their obligations, the Government would provide the required financing through appropriations, either budgetary or non-budgetary.

The following table summarizes the unaudited information regarding such insurance programs as at March 31, 2002.

AGENT CROWN CORPORATIONS INSURANCE PROGRAMS


						5 year		Closing
						average		balance
		Insurance		Net		of net		of
		in force		claims (1)		claims		fund


		(in millions)
Canada Deposit Insurance Corporation		$	346,809	$	18	$	—	$	486
Canada Mortgage and Housing Corporation
	Mortgage Insurance Fund		218,900		229		291		1,229
	Mortgage-Backed Securities Guarantee Fund		37,452		—		—		80
Export Development Canada
	Export insurance contracts entered into on its own behalf		12,292		21		70		457

Source: Public Accounts of Canada 2002.

(1) Refers to the difference between claims and amounts received from sales of related assets and other recoveries.

DEBT RECORD

Canada has always paid the full face amount of the principal and interest on every direct obligation issued by it and every indirect obligation on which it has been required to implement its guarantee, promptly when due. During war, where such payment would have violated laws or regulations forbidding trading with the enemy, payment was made to a custodian of enemy property.

MONETARY AND BANKING SYSTEM

Bank of Canada

The Bank of Canada (the “Bank”) was incorporated in 1934 under the Bank of Canada Act (in this sec-tion referred to as the ”Act”) as Canada’s central bank. All of the capital stock of the Bank is owned by the Government. The Act gives the Bank the responsibility for the conduct of monetary policy and confers specific powers for discharging that responsibility.

The Bank has the sole right to issue paper money for circulation in Canada. The Bank acts as the fiscal agent for the Government. As fiscal agent, the Bank is responsible for handling new borrowings, administering the outstanding debt, and making payments on behalf of the Government for interest and debt redemption. As well, the Bank advises the Government on matters relating to managing the public debt. The Bank may buy or sell various types of securities, including securities issued or guaranteed by Canada or any province, short-term securities issued by the United Kingdom, and treasury bills or other obligations of the United States. The Bank may buy and sell foreign currencies, SDRs issued by the IMF, coin, and gold and silver bullion. The Bank may open accounts with other central banks and at the Bank for International Settlements (“BIS”) as well as maintain accounts in commercial banks to facilitate the buying and selling of foreign currencies. The Bank may accept deposits from the Government or any of its corporations or agencies, any province, any chartered bank or any member of the Canadian Payments Association. The Bank may pay interest to the Government on any deposits made to the Bank and may pay interest to member institutions of the Canadian Payments Association on deposits accepted for certain specified purposes. It may also accept deposits from other central banks and official international financial organizations and may pay interest on such deposits. The Bank does not accept deposits from individuals nor does it compete with the chartered banks in the commercial banking field. The Bank is not required to maintain gold or foreign exchange reserves against its liabilities.

The Bank may, on the pledge of certain classes of securities or property, make loans or advances for periods not exceeding six months to chartered banks, and to any other members of the Canadian Payments Association that maintain deposits with the Bank. The Bank Rate is the minimum rate at which the Bank is prepared to make loans or advances. Although the Bank has the power to make loans or advances under certain conditions and for limited periods to the Government or any province, such loans are extremely rare and no such loans have been made in over 35 years.

The framework for the implementation of monetary policy by the Bank was changed considerably on two occasions during the past ten years, first as a result of the phased elimination of reserve requirements between June 1992 and July 1994, and second, with the introduction of a real-time large-value settlement system (the “Large Value Transfer System” or “LVTS”) in February 1999.

The central mechanisms through which the Bank currently implements monetary policy are the LVTS and a 50-basis-point operating band for the overnight interest rate adopted by the Bank in mid 1994. Currently, the Bank sets the level of excess settlement balances in the LVTS at a minimum of $50 million. Any participant in the LVTS with a deficit funds position should therefore be aware that there will be one or more participants with offsetting surplus positions that are potential counterparties for transactions at market rates. The Bank encourages these transactions by paying an interest rate on positive balances held overnight by LVTS participants at the lower limit of its operating band and charging an interest rate on overdraft loans to LVTS participants at the upper limit of the band (which is also the Bank Rate). Thus the overnight rate will typically stay within the operating band since participants are aware that they can earn at least the lower limit of the band on positive balances and need not pay more than the upper limit to cover shortfalls. Moreover, the Bank is prepared to enter into overnight buyback transactions at the midpoint of the operating band to reinforce its target rate. Through its influence on the interest rate for overnight funds, the Bank is able to influence other short-term interest rates, the exchange rate, aggregate demand and, ultimately, inflation.

The Bank controls the level of settlement balances available to financial institutions by adjusting the level of Government deposits held at the financial institutions which settle through the Bank. Prior to the

introduction of LVTS, this adjustment was done by means of a daily transfer of Government demand deposits between the Government’s accounts at the Bank and at the financial institutions. Since LVTS, this adjustment has been accomplished through twice-daily auctions of Government term deposits.

The Act provides for regular consultation between the Governor of the Bank and the Minister of Finance as well as for a formal procedure whereby, in the event of a disagreement between the Government and the Bank which cannot be resolved, the Government may issue a directive to the Bank as to the monetary policy that it is to follow. The directive must be in writing, in specific terms, applicable for a specified period and published forthwith. This provision in the Act makes it clear that the Government must take the ultimate responsibility for monetary policy, but the Bank is in no way relieved of its responsibility for monetary policy and its execution so long as a directive is not in effect. No directive has ever been issued.

The Payment Clearing and Settlement Act, 1996 gives the Bank formal responsibility for the regulatory oversight of major clearing and settlement systems. Specifically, the Bank will review all eligible systems and identify their potential to cause systemic risk. Systems with this potential are subject to designation under the Payment Clearing and Settlement Act, 1996. Designated systems will have to satisfy the Bank that they have appropriate risk-control mechanisms in place. The Bank may carry out examinations and, in situations where it is judged that systemic risk is being inadequately controlled, the Governor of the Bank may issue directives to a designated system.

The Payment Clearing and Settlement Act, 1996 also gives the Bank new powers to provide certain services. In particular, the Bank can provide a guarantee of settlement to the participants of designated systems.

Other Government Financial Institutions

Export Development Canada (“EDC”) was established on October 1, 1969 for the purpose of facilitating and developing trade between Canada and other countries. EDC is the successor to the Export Credits Insurance Corporation which commenced operations in 1944. Activities were originally limited to insuring Canadian exporters against nonpayments of credits extended to foreign buyers. To further enhance Canada’s growing export trade, EDC has introduced an export loans program, a foreign investment guarantees program and a surety risk protection insurance program. The Federal Business Development Bank was established in 1975 as the successor to the Industrial Development Bank which was established in 1944 as a subsidiary of the Bank of Canada. In 1995, the Federal Business Development Bank was continued as the Business Development Bank of Canada (“BDC”). The purpose of the BDC is to provide financial and management services to small and medium-sized businesses in Canada. The Canada Deposit Insurance Corporation, established in 1967, insures deposits payable in Canada and in Canadian currency at banks and other financial institutions up to $60,000 per depositor. Farm Credit Canada was established in 1959 to provide for the extension of long-term mortgage credit to farmers. The Canada Mortgage and Housing Corporation (formerly the Central Mortgage and Housing Corporation) was incorporated in 1945 to insure mortgage loans made by approved lenders and to make direct mortgage loans.

Chartered Banks

Canada’s banks are all federally incorporated and are regulated under the Bank Act. The Bank Act sets out the rules for the structure and operation of these institutions. It is the current practice in Canada to revise the Bank Act after intervals of approximately five years with the most recent revision taking place in 2001 (see Financial Sector Restructuring below). The Office of the Superintendent of Financial Institutions is the federal agency responsible for supervising banks.

Under the Bank Act, foreign banks are permitted to incorporate subsidiaries by letters patent. In June 1999, legislation was passed to allow foreign banks to establish specialized, commercially focused branches in Canada. Foreign banks can operate full service branches and lending branches. In November

2002, the banking system consisted of 15 domestic banks, 33 foreign bank subsidiaries, 17 full-service foreign bank branches and 3 foreign bank lending branches.

Financial Sector Restructuring

On June 14, 2001, Royal Assent was given to Bill C-8, An Act to establish the Financial Consumer Agency of Canada and to amend certain Acts in relation to financial institutions. Bill C-8, which amended various federal financial sector statutes, reformed Canada’s financial services sector, which includes domestic and foreign banks, trust companies, insurance companies, credit unions and other financial institutions.

Some of the key elements contained in Bill C-8, as well as the measures being implemented by non-legislative means such as guidelines and statements of government policy that compliment the legislation, include: a new definition of widely held ownership for federal financial institutions that allows for strategic alliances and joint ventures with significant share exchanges; a new holding company regime which offers financial institutions the potential for greater structural flexibility; a bank merger review process with a formal mechanism for public input; broader access to the payments system to accommodate the entry of life insurance companies, securities dealers and money market mutual funds that meet certain criteria, including regulatory oversight and liquidity; and the creation of the Financial Consumer Agency of Canada to enforce the consumer-related provisions of the federal financial institution statutes.

Monetary Policy and Interest Rate Developments

The ultimate objective of Canadian monetary policy is to promote good overall economic performance through price stability.

In February 1991, the Government and the Bank of Canada (the “Bank”) jointly announced a series of targets for reducing total CPI inflation to the mid-point of a range of 1% to 3% by the end of 1995. This inflation-control target range has been extended a number of times. In May 2001 the 1% to 3% target range was extended to the end of 2006. Monetary policy will continue to aim at keeping future inflation at the 2% target mid-point of this range, both to maximize the likelihood that inflation stays within the target range and to increase the predictability of inflation over the longer term.

The policy instrument the Bank uses to influence monetary conditions is the overnight rate target, which is the mid-point of the Bank’s operating band for overnight financing. The Bank constantly reassesses the level of the overnight rate target necessary to achieve the inflation-control targets.

Since the Fall of 2000, the Bank has moved to fixed announcement dates for the overnight rate target to make monetary policy more effective. Fixed dates have reduced the uncertainty in financial markets associated with not knowing exactly when changes in the overnight rate target may be announced, and contributed to the improved functioning of financial markets. Fixed dates have provided a regular opportunity to emphasize the medium-term perspective of monetary policy and increased the Bank’s transparency, accountability and dialogue with the public.

On January 15 of 2002, the Bank of Canada lowered its target for the overnight interest rate by 25 basis points to 2.00%. This was the last in a series of 10 cuts the Bank made since January 2001. These reductions were aimed at keeping inflation close to the mid-point of the inflation-control target range over the medium term, and were implemented in the context of a slowdown in both external and domestic aggregate demand.

Up until August 2002, the Bank had increased its target interest rate by 25 basis points on 3 consecutive occasions, bringing the rate to 2.75%. These increases were in response to the strength of Canada’s economic recovery which began in the last quarter of 2001 and has continued in the first half of 2002.

The Bank announced no change in the target rate at its September 4 and October 16 fixed announcement dates, citing the weakening near-term prospects for growth in the United States, increased uncertainty associated with volatility in the global financial markets and the unsettled geopolitical situation as reasons for the pause in rate hikes.

LOGO

Membership in International Economic Organizations

As of December 31, 2001, Canada’s paid-up quota in the IMF is currently SDR 6,369.2 million. On December 31, 2001 one SDR equalled Cdn $2.00147.

Canada also participates in the General Arrangements to Borrow (the ”GAB”) and the New Arrangements to Borrow (the “NAB”) which provide special financial resources to the IMF. Canada’s total commitment under the GAB and the NAB amount to SDR 1,396.0 million. As of December 31, 2001 there were no loans outstanding to the IMF under the GAB and the NAB.

Canada is also a member of the Organization for Economic Cooperation and Development, a party to the World Trade Organization and a shareholder (through the Bank of Canada) of the BIS. Canada’s participation in other international development institutions is summarized in the table below.

PARTICIPATION IN OTHER INTERNATIONAL DEVELOPMENT INSTITUTIONS



	At December 31, 2001


	Subscription				Cumulative Contributions
					to Special
	Total		Paid-in(1)		Development Funds(2)

					(in millions of
	(in millions of				U.S. dollars
	U.S. dollars)				unless otherwise
					indicated)
International Bank for Reconstruction and Development	$	5,403.8	$	334.9		—
International Development Association (“IDA”)		—		—		C$5,761.8
International Finance Corporation		81.3		81.3		—
Multilateral Investment Guarantee Agency		56.5		10.7		—
Asian Development Bank		2,324.0		162.7		1,042.5
Inter-American Development Bank		4,039.8		173.7		289.6
Caribbean Development Bank		62.7		13.7		101.8
African Development Bank		1,011.4		88.0		1,167.6
European Bank for Reconstruction and Development		828.6		149.0		—

Source: Department of Finance; Annual Reports of Regional Development Banks

(1) Balance of subscription payable only in the unlikely event that there is a call on the institution’s capital.

(2) Special Development Funds provide loans to the poorest countries on highly concessional terms. Cumulative contributions reflect encashments of existing notes. Canada also has additional future obligations for notes that have been issued and not yet encashed. Payments to concessional funds have been converted from Canadian into U.S. dollars and therefore reflect end-of-year exchange rates.

Exhibit E

CONSENT

I hereby consent to the use of my name in the Canada description attached as Exhibit D to the Form 18-K of Canada. I acknowledge that such description may from time to time be incorporated by reference into one or more Registration Statements, and in the related prospectuses, of Canada and/or one or more Crown Corporations of Canada. I consent to the use of my name in any such Registration Statements and related prospectuses in connection with the information so incorporated.


		/s/ Kevin G. Lynch

		Kevin G. Lynch
		Deputy Minister of Finance

Ottawa, Canada

December 20, 2002

Sunday 26 September 2021

Canada’s Richest Billionaires 2020

Canada’s Richest Billionaires 2020

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