~BW Uzelman
BC energy exports reduce global GHG emissions.
The Business Council of British Columbia has been a tireless advocate of both export growth and income growth. They have consistently called for the promotion of exports to help the province pay for things we do not produce. And they firmly argue that the growth of income, specifically GDP per capita, is the most appropriate target, not the growth of the economy (GDP). The council鈥檚 latest report directly links growth of exports and income growth. 鈥淎ny credible strategy to grow per capita GDP and average household incomes in B.C. must be built around supporting and expanding exports.鈥�
In 鈥淭he Foundations of Provincial Prosperity鈥�, Ken Peacock and Jock Finlayson maintain that exports allow local companies to increase scale and productivity, and thus build income per capita. BCBC data shows the two largest export sectors are forestry and energy, and along with mining and agriculture, constitute the broad resource sector, which accounted for fully 45% of BC鈥檚 total exports from 2017-2022. Non-resource manufacturing accounted for 9% of exports, while pre-Covid tourism also ran at 9%. Services accounted for 42% of exports, significantly above Alberta at 18% and Ontario at 28%.
Growth in the resource sector contributed a healthy 60% of the total growth in exports from 2017-2022. Within the sector, though, there was a major shift. Forestry only increased by 15%, while energy grew by 80%, a 鈥渕assive $7 billion export gain鈥�. Energy grew across the sector. Gas and coal exports increased strongly due to record prices for both. Oil, electricity and pipeline services advanced solidly. Agriculture experienced a surprisingly strong expansion of 41% ($1.7 billion), and mining grew by 22% ($1.2 billion).
Services exports absolutely surged over the five year period. Technology services had the largest rate of increase of any sector, an astonishing 151% (over $2.5 billion). Education services increased by 81% and professional services increased 39%. Unsurprisingly, in the period including the pandemic, tourism was down 53%. Gateway services 鈥� shipping and related services 鈥� increased by 33% ($1.9 billion). The authors estimate exports totaled $83 billion in 2022, an impressive increase of 39% over 2017.
BCBC鈥檚 growth predictions for 2022-2027 are broadly promising, despite an expected decline in forestry exports of $3.9 billion due to market conditions and reduced availability. Energy exports will grow by as much as $6.8 billion or 30%, with the addition of LNG exports ($4.4-6 billion) and increases in pipeline services, green fuels and oil and gas. Mining, agriculture and non-resource manufacturing will again perform strongly, increasing by 31%, 41% and 28% respectively. Tourism services will recover strongly, but not completely. Other service exports perform well, most notably film and tv with 81% growth.
The continued success and growth in three of four of the resource sectors reinforces their significance to BC鈥檚 economic performance. Peacock and Finlayson note that energy exports have risen by billions, and project them to continue to rise. Energy, along with the mining and forestry sectors, are dominated by industries that operate at scale and enjoy high productivity rates. The authors note, 鈥淭he importance of energy and other resource exports in sustaining growth in GDP and per capita incomes is inescapable.鈥�
Peacock is BCBC鈥檚 senior vice-president and chief economist. Finlayson is senior policy analyst. They are credible; their analysis is credible. They advise, 鈥淚f policy makers want to improve prosperity, they should work tirelessly to nurture and bolster the competitive conditions for BC exporters, and embrace energy鈥檚 expanding role in driving and sustaining B.C.鈥檚 export economy.鈥� To ignore BCBC鈥檚 pragmatic guidance, no doubt, will compromise our prosperity and our future.
However, it鈥檚 not clear that the federal and BC governments will adjust their industrial policies. Their record is discouraging. To date, neither has significantly advanced productivity or income per capita. The federal government has focused narrowly on green energy incentives and domestic GHG emissions reductions. BC鈥檚 Eby government has added new environmental standards for LNG producers, which jeopardize proposed LNG projects. Both governments refuse to recognize that Canada produces a very small proportion of total global GHG emissions, 1.5%, while the developing world produces 70%.
This is where Canada must focus its attention 鈥� globally. In China and elsewhere in the developing world, coal usage is pervasive and the accompanying GHG emissions are intense. The potential of LNG to considerably reduce global emissions is beyond question. Virtually all of BC鈥檚 energy products, in fact, will improve air quality and cut emissions markedly wherever they displace thermal coal.
Canada must reduce domestic emissions. But the impact of that on total global emissions will be insignificant. Provision of BC and Canadian energy, particularly LNG, to other nations is our responsibility 鈥� and our opportunity.
bruce
Bruce W Uzelman
I grew up in Paradise Hill, a village in Northwestern Saskatchewan. I come from a large family. My parents instilled good values, but yet afforded us, my seven siblings and I, much freedom to do the things we wished to do. I spent my early years exploring the hills and forests and fields surrounding the village, a great way to come of age.
I attended the University of Saskatchewan in Saskatoon. I considered studying journalism at one point, but did not ultimately pursue that. However, I obtained a Bachelor of Arts, Advanced with majors in Economics and Political Science in 1982.
Contact: urbangeneral@shaw.ca
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