COLUMN: Time for a reality check on Canada’s exports

Industrial transitions do not happen overnight, Jock Finlayson writes

Canada is a relatively small economy that depends heavily on international trade to underpin its prosperity.

An examination of what Canada sells to other countries sheds light on the industry sectors in which we possess competitive strengths. It stands to reason that the industries that supply the bulk of our exports are also the ones in which Canada enjoys some degree of global comparative advantage.

Unfortunately, many of our politicians don’t appear to think this way. Rather than asking what the country is actually good at producing and exporting, they dream about a future economy with a different industrial structure – typically, a structure in which “green” and “high-tech” goods and services predominate.

There is no doubt that tomorrow’s economy will be greener and more technologically sophisticated than the one we have now. But industrial transitions don’t happen overnight – they unfold over multiple generations. Nor do politicians generally have a decisive role in determining the details of the evolving industrial structure.

A few things stand out from the chart.

The first is the crucial place of natural resources in the export mix. In 2017, natural resource products accounted for 55 per cent of Canada’s merchandise exports (for the four Western provinces combined, the share was higher, closer to 80 per cent).

Energy alone represented more than one-fifth of the country’s goods exports last year, with oil by far the largest contributor. By any measure, natural resources carry enormous weight in our economy and remain foundational to Canada’s exports.

A second striking feature of the chart is the outsized contribution of the automobile sector – both vehicle assembly and parts – to the Canadian export economy: about 17 per cent of merchandise export receipts in 2017, with most of this based on shipments to the United States.

This underscores the importance of preserving the integrated North American automobile manufacturing sector at a time when NAFTA is being re-negotiated at the behest of a protectionist-minded American administration.

READ MORE: Liberals won’t compromise on culture, dispute resolution in NAFTA talks, Trudeau says

A third point is the very modest role of what Export Development Canada classifies as “advanced technology products” within Canada’s overall export basket. All advanced technology products together provide less than four per cent of the country’s merchandise exports.

As for the “clean tech” products that garner so much attention from many politicians these days, they make up perhaps one per cent of Canada’s exports – i.e., a miniscule sliver, albeit one that is expected to grow in the coming years.

At a time when Canada is seeing investment dollars and production activity migrate to the U.S. and other jurisdictions across the entire array of natural resource industries as well as in many segments of manufacturing, our policy-makers should be working harder to bolster the competitive position of the industries that are paying the bills today, instead of ruminating about a hoped-for economic future whose shape is in any case largely beyond their control.

Jock Finlayson is executive vice president and chief policy officer of the Business Council of British Columbia

Like us on Facebook and follow us on Twitter

Just Posted

More multi-family housing projects proposed for Kelowna

Projects in Rutland and the Mission areas of the city proposed

Kelowna man charged with killing wife, daughters in court today

Progress in year old murder case is slow going

West Kelowna council tentatively sets tax hike in budget

The tentative tax hike is set at 3.9%

West Kelowna to hire eight more firefighters

The city looks to solve what they are calling a critical shortage of firefighters

Kelowna RCMP look to reunite stamp collection with owner

The stamp collection was handed to RCMP in Oct.

UPDATE: B.C. legislature managers accused of excessive travel, personal expense claims

Clerk Craig James, security chief Gary Lenz call allegations ‘completely false’

New Canada Food Guide nixes portion sizes, promotes plant-based proteins

Guide no longer lists milk and dairy products as a distinct food group

One-third of pregnant women think cannabis won’t harm their baby: UBC

Review of six U.S. studies found doctors didn’t communicate health risks of pot use

No cash, no election sign policy pondered by B.C. city

A deposit could be required to put up election signs in 2022.

Heavy snowfall expected for Coquihalla, Okanagan valley

Coquihalla highway, the Connector, and Highway 3, from Princeton to Allison Pass are getting snow.

China demands US drop Huawei extradition request with Canada

China detained two Canadians on Dec. 10 in an apparent attempt to pressure Canada to release Meng

9 brains, 3 hearts: Some wild facts about octopuses

Things to know about the giant Pacific octopus, which is naturally found in the waters of the U.S. West coast, the Aleutian Islands and Japan

Hollywood announces 2019 Oscar nominations

Netflix has scored its first best picture nomination, something the streaming giant has dearly sought

B.C. man fined $10,000 after leaving moose to suffer before death

Surrey man was convicted last week on three Wildlife Act charges

Most Read