What is the economic role of government in the United States and Canada?

Both the United States and Canada are capitalist economies being run, to some extent, on the principles of free market.

Anyone is free to open a small business, hire people, sell their product and make money.

Both countries are also part of the North American Free Trade Agreement (NAFTA) ensuring free trade between both countries.

However, there are certain differences due to the location and size of both countries.  

Canada has a population almost 10 times less than the United States and it's economy is largely based on resource exports such as Timber, Oil and Gas.

American economy is far more diversified with agriculture, manufacturing, IT, and resources all playing a big part in creating jobs.

Both countries though, have a highly developed economy, supported by excellent infrastructure and a services sector which brings in the majority of income.

Both countries though, also have big governments with 20%-25% of the GDP of each country being made up of government spending.

American government spends more than $600 billion on the military alone while Canadian government spends a huge amount of money on social programs.

Explanation:

answer; by working independently, the states have a high likelihood of developing innovative solutions that can be employed in other states;