The last stats I read stated:
Of Canada's 2000 imports, 74 percent came from the U.S., while 86 percent of Canada's total exports were shipped to the United States. The volume of Canada-U.S. trade last year was far greater than the total amount of Canada's trade with all of its other trading partners combined.Those numbers are daunting; this is how they look:
So what exactly do we offer up to the US that they want in such abundance? Our dollar is high (actually, their dollar is low, our's isn't that high when you compare it to the Euro or the Pound over the same time lines as in comparison to the US greenback), so that should slow down the exports right?
Conversely, because of the relative parity of the two currencies, our imports from the US should climb during this period. As my rudimentary economics (I hesitate to use this word) skills comprehend it, much of our trade with the US is in energy and natural resources and it goes something like this: We ship the sh$t to them raw, then buy it back refined. As in the crude flows south, the gasoline flows north, and the logs go south, and the chairs go north. Of course there are always exceptions to this, but that is a sweeping generalization that is likely correct if I was to not be so lazy in my linkages in this blog.
We know the forestry industry is in its worst recession since 1982. So that leaves the energy sector to keep the economy a pumpin' (pun intended). The same stats suggested that BC's energy sector is plagued by a 14% decrease in drilling (that's where we get the gas and oil from) between late 2005 and 2007. We import electricity, partially because we export a lot of it, but that is a market mechanism I do not understand, but it makes sense that that isn't making everyone rich enough to buy RE in Victoria. I know the mining sector is hot, only because my stocks are doing well, but those are piddly numbers compared to Oil and Gas as we see below. And I can still buy mining stocks at far superior price/earnings ratios than O&G.
Those are national numbers too. BC's take of that is paltry compared to Alberta, Atlantic Canada and Saskatchewan. We're about the minerals and the forests primarily. Our O&G sector has definitely grown, but the producers are busy producing in the tar sands, so unless you own their stock, you're likely not getting rich off of it directly.
I found this article very interesting; it's all about how Canada's economy is de-coupling from globalization. That should protect us from economic downturns in the States then right? Except it won't and it has some serious negative consequences for our economy to boot:
On the whole, this de-globalization is a negative development. Canada is reallocating labour and other resources away from export industries (which are highly productive, and pay wages 25 percent above the rest of the economy) to purely domestic sectors, many of which (like fast food, retail, and personal services) feature dead-end jobs and lousy productivity. Indeed, this de-globalization is a key reason for Canada’s abysmal productivity performance this decade, despite all the business-friendly policies we’ve implemented in the name of “efficiency.”
Now, I'm not really agreeing with the author. Especially on issues like free-trade. I imagine most people in our nation have benefited greatly from NAFTA. But this curious de-coupling within a free-trade arrangement leads me to believe that growing pains are a comin'.