Canada boasts a balanced federal budget, diverse economic base, highly educated work force (some 99 percent of the population has at least a ninth-grade education), and an aggressively trade-oriented business culture. The North American Free Trade Agreement (NAFTA) has encouraged some Canadian exports and facilitated new foreign investment in Canada's railroads, public utilities and other economic sectors that are currently being privatized.

Nevertheless, many Canadians remain concerned that the Asian financial crisis could spill over into Canada's financial sector. Canada's stock markets were also shaken in 1997 by what regulators have called a multi-billion dollar fraud based on false claims of a major gold strike by a Canadian company operating in Indonesia. The relative simplicity of the purported fraud and the ease with which it slipped past Canadian (and world) stock market regulators has produced new jitters about the Canadian stock market. One result has been that capital for investment has become more expensive and difficult to find.

Canada's largest foreign investors are the United Kingdom, Japan, the Netherlands and the United States, in that order, according to Canadian trade reports. Such rankings are open to question, however, because investment funds from any one of these countries could in fact have originated almost anywhere in the world, then "naturalized" by passing through financial institutions in the host country.

Canadian unemployment is currently about 9 percent. Annual economic growth in constant dollars is projected to be between 2 percent and 3 percent for 1998, according to current U.S. government estimates, with inflation running at about 2 percent.

Canada and the U.S. are the largest markets for one another's goods, with trade totaling almost $500 billion annually.

Canada and the United States are the largest markets for one another's goods. Total cross-border trade in constant dollars has increased almost fivefold since 1980 (when a series of Canadian-U.S. tariff reduction agreements began) and now totals almost $500 billion (U.S.) annually, according to U.S. State Department figures. At least one-fifth of this is in the automotive sector, where ties between Detroit and Windsor just across the border date back to the beginnings of the auto industry. Cross-border automobile industry trade totaled $104.6 billion (U.S.) in 1996.

Canadian mining and energy, long strong assets for the country, are being targeted for further development by several provincial governments and private consortiums. Newfoundland's government is developing offshore oil resources, for example, while several other provinces hope to develop hydroelectric resources to sell electricity into newly deregulated North American electric grids. Similarly, the United States imports from Canada more than 2 trillion cubic feet of natural gas, or 12 percent of its annual natural gas requirements, making Canada the largest single energy supplier to the United States and one of the largest energy producers in the world.

Recent reports suggest that the longstanding Canadian concern with becoming overwhelmed by U.S. movies and other cultural products may have eased in recent years. Canadian cinema, radio and television appear to be well established, in part as a result of some 30 years of government assistance. Public radio and television play a proportionately larger role in the country's news and entertainment industries than do their counterparts in the United States.

The two countries continue to dispute fishing rights, however. A conflict over North Atlantic fishing territories seemed resolved by an International Court of Justice ruling in 1984. As a practical matter, though, that region's once-abundant cod and other sea foods had been drastically over-fished by the 1990s, leading to a serious recession in fishing industries in both countries. Terms for Pacific Northwest harvesting of salmon continue to be a source of tension today, and many experts have said that poor resource management may reduce salmon populations to the point that fishing in that region could take years to recover.

Other irritants in Canadian-U.S. relations include Canada's decision to open trade links with Cuba, which has been the target of a U.S. economic embargo since the early 1960s.

— Washingtonpost.com fellow Christopher Simpson