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

Expect traffic delays at Burnside and Douglas this week for new bus lanes

Prep work runs Tuesday through Thursday while paving takes place Friday

Victoria police searching for missing 18-year-old

Austin Bennett-Frechette is known to frequent the Greater Victoria Public Library

Victoria Cool Aid Society looks to beautify city with art

New mural to be unveiled Tuesday meant to inspire hope

Small homeless camp removed at Horth Hill Regional Park in North Saanich

CRD staff say the camp is not connected to Camp Namegans in Goldstream

Lawyer questions rejection of visitors to Goldstream homeless campers

Activist Chrissy Brett says they are still in fear of being kicked out

UrbaCity raises record-breaking $70,000 for Island Prostate Centre

240 racers, corporate sponsors fill the coffers for the cause

Harvest Moon to light up B.C. skies with an ‘autumn hue’

It’s the first moon after the autumn equinox

Hockey league gets $1.4M for assistance program after Humboldt Broncos crash

Program will help players, families, coaches and volunteers after the shock of the deadly crash

Canada has removed six out of 900 asylum seekers already facing U.S. deportation

Ottawa had said the ‘overwhelming majority’ had been removed

Appeal pipeline decision but consult Indigenous communities, Scheer says

The federal appeals court halted the Trans Mountain expansion last month

B.C. electric vehicle subsidy fund drains faster than expected

Province adds another $10 million to incentive fund

‘I’ll never forgive you:’ Victim impact statements at hearing for Calgary killer

Curtis Healy was found guilty of first-degree murder Friday in the death of Dawns Baptiste.

Most Read