The service industry plays an extremely vital role in the economy of Canada. The industry employs 75% of the labour force and contributes billions to the GDP of Canada. The main parts of the industry are the goods production sector and the service sector. The industries of agriculture, mining, fishing, construction forestry and manufacturing fall under the goods production sector. The service sector has under it the healthcare and welfare industry, the education system, religion and charity, commercial services, hotels, restaurants, recreation, personal care and trade, retail trade as well as wholesale.
The finance industry, including banking, transportation, communication, insurance industry, real estate sector, investment, all fall under this industry. This list is enough to tell you about the importance of the service industry in the economic growth and development of Canada.
With the expansion of the service industry, there has also been an increase in its contribution to the GDP growth and the number of people employed by the industry. Both the sector making goods and the service-providing sector have seen steady growth, employing people in both high skill demand and low skill demand jobs.
Many service industries provide personal or special services that need a lot of labour force. As a result, people working in this industry receive higher wages than people in other industries. A 2004 study also found that this industry employs more women than men.
Nova Scotia, the province of Manitoba, British Columbia and the Canadian province of Prince Edward Island have the highest concentration of service industries in their provinces. Service industries in Alberta and Saskatchewan have seen rapid growth in the last 20 years. This is attributed to the vast wealth of natural resources present in these provinces.
Service industries concentrate on CMAs
CMA are known as Census Metropolitan Areas. These areas are whenever service industry-related jobs are most concentrated. These include Ottawa, Gatineau, Halifax, Victoria, Regina and Quebec.
The five most populated Census Metropolitan Areas are Toronto, Montréal, Vancouver, Gatineau and Calgary. Professional services, scientific services and technical services are said to be the most important industries in the service sector today. Designing computer systems and related industries have the fastest growth rate, going from contributing 0.6% to 1.1% of GDP in 6 years. Industries involved in legal services, accounting, tax and bookkeeping and advertising contribute 1.4% of the Gross Domestic Product.
Trends affecting profits
Profit margins can fluctuate in this industry, from lucrative to razor-thin. Not only the short term trends but also the long term trends and patterns, affect the profits made by this industry. Taking the real estate industry as an example, with the boom in housing, the profits of the real estate as well as the banking industry rose to 22% and 35% respectively as people took out loans to rent or buy property and there was an increase in consumer spending.
Profits made by the food industry are comparatively low due to the high cost of food-related raw material, and labour costs. However, the travel industry took a hit when the Severe Acute Respiratory Syndrome broke out in Iraq creating panic and a shift in global travel industries.