By October 6, 2017 0 Comments Read More →

Trade war? Study shows Alberta, British Columbia have most inter-dependent provincial economies

alberta

Jason Kenney, Alberta United Conservative Party leadership candidate. 

“Study important evidence the two must put aside differences and find ways to collaborate”

New research from the Business Council of British Columbia shows a much higher level of mutual dependency between Alberta and B.C. than is usually acknowledged as the two provinces spar over Kinder Morgan’s controversial pipeline project, Trans Mountain Expansion.

The research comes on the heels of comments by Jason Kenney, former cabinet member under Conservative Prime Minister Stephen Harper and currently running for leadership of the United Conservative Party in Alberta, that hinted a trade war with British Columbia if he becomes premier of Alberta. in an Aug. 4 interview with the Globe and Mail.

“If the government of British Columbia purposely undermines the rule of law and our ability to safely export products from Alberta, then there will be repercussions. Trade is a two-way street. And if I were premier and the government of British Columbia were blocking one of our prime exports, we would find ways to respond in kind that would be an economic response.”

rule

Follow Teo on LinkedIn and Facebook!

When asked for specifics, Kenney said, “Stay tuned. There’s a great deal that British Columbia depends on that comes from Alberta. We’ll find whatever points of leverage are necessary to demonstrate that a province cannot do that,” he added.

Kenney should keep in mind that trade relations are indeed a two-way street, as the latest data suggests.
Not only is Alberta a bigger export destination for B.C. than China, but Alberta’s merchandise exports to B.C. are greater than its exports to Asia.

The B.C. and Alberta economies are arguably the most interdependent of any two provinces in Canada, along with being the most prosperous provinces in Canada, according to the study.

In 2013, the breakdown of B.C.’s exports of services to Alberta such as transportation (trucking, rail, etc.) totalled $9.4 billion, while goods exports came in at $7.2 billion.

The study also notes that this means B.C.’s merchandise exports to Alberta exceeded the value of its goods exports to China ($6.6 billion) in the same year.

In 2013, Alberta exported $8 billion worth of goods to BC, although the higher value may have been a result of oil prices being in the $100 range. Alberta’s exports of services to BC amounted to $8.2 billion in the same year.

According to additional data not included in this study, BC’s exports to Alberta of natural gas and forest products are among the largest segments (natural gas being the largest).

In turn, the Port of Vancouver allows Alberta to export good to foreign markets.

“It’s really the west that ships a large quantity of its products through the port here in Vancouver and to a lesser extent, up the coast. So keeping those channels open and continuing to invest in the gateway will mean more goods go through that port so that relationship(B.C. and AB) will be reinforced,” said Ken Peacock, author of the report and chief economist at Business Council of British Columbia, in an interview.

alberta

Besides goods and services exports, the inter-migration of labour between the two provinces is higher than any other two provinces in Canada. Even larger provinces like Ontario and Quebec don’t have the migration of people B.C. and Alberta has, according to the study.

“There’s a number of people moving back and forth between BC and Alberta. The total two-way flow, I think over the past five years, was 250,000. The next greatest two-way flow is around 200,000 between Alberta and Ontario. Despite the fact that Ontario’s three times the size of both BC and Alberta, we get more flows back and forth,” said Peacock.

“This study is important evidence that the two must put aside differences and find ways to collaborate if their goal is to achieve growth and find ways to get extra value from what we already do,” said Peacock.

Posted in: Jude on Alberta

Post a Comment