Vol. 4 No.
5 "India is the cradle of the human race... " - Mark Twain
Path to Recovery Challenging for Canada's Regions
year has already made history. As far back as the records go,
Canadian exporters have not seen a worse year than 2009 – by a
factor of five, no less. Canada’s recession was indeed an
imported one, and the decline in activity is so dramatic that no
single province but the smallest has escaped its effects. Even so,
there are differences in each province’s experience, and in the
outlook for 2010.
across estimated performance for 2009, and export losses in
certain provinces seem impossibly severe. Declines of 29% in New
Brunswick, Saskatchewan and British Columbia, topped by a 36%
plunge in Alberta, and an unthinkable 44% drubbing in
Newfoundland. The magnitude almost seems impossible, until put in
proper context. By and large, this year’s big losers saw banner
performances in 2008 – for Newfoundland, a 27% increase, a
stunning 34% gain in Alberta. But nothing matched the drama of
Saskatchewan’s explosive 55% surge. These gyrations reflected
movements in the prices of key commodity exports, which settled
down again this year after their late-boom spike.
not all provinces had such well-padded declines. Prior to this
year’s plunge, British Columbia saw just 5% growth in 2008, as
overall performance was weighed down by the front-running plight
of the lumber industry. Nova Scotia’s 24% drop this year was
preceded by a relatively slim 7.6% gain in 2008, which itself
reflected early weakness in the lumber and fishing industries.
Quebec’s growth was stunted in 2008 by a sharp drop in aluminum
exports. However, Ontario entered the downturn in the weakest
position. The early woes of the auto sector led to a 7.7% drop in
exports last year, the weakest performance among the provinces,
and the only region to post a decline.
most provinces, next year’s performance will be variations on a
modest national trend. With the world economy forecast to plod
through the rough country that bridges recession and recovery,
export performance will largely be on hold across the country. New
Brunswick is a notable exception, powered by completion of a large
liquefied natural gas project and completion of a large electric
power project. On the other end of the spectrum, sluggish global
growth and weak food and metals production will constrain
Saskatchewan and Manitoba to just 1% growth in 2010. Declines in
oil production will hold Newfoundland and Labrador to 2% growth
– weakness that stands in contrast to the investment-led
impressive growth of the overall economy.
the middle of the pack, Alberta will see 8% export growth in 2010,
thanks to a partial rebound in energy prices. Nova Scotia will
also see energy-price-related gains, and will also benefit from
the beginnings of an auto sector recovery to the tune of 9%
growth. Ontario exporters will take their first steps toward
recovery, with an 8% increase that reflects modest improvement in
the auto sector, chemicals and base metals industries. Overall,
the export recession will prove to have been hardest on
Newfoundland and Labrador, British Columbia and Ontario when 2010
export levels are compared with 2007. The Territories, Prince
Edward Island and Saskatchewan will be the regions least scathed
by the worst global recession since the Great Depression.
The bottom line? There are no winners among Canada’s provinces and territories in the current global recession. Exports have been affected everywhere, and it will take a strong recovery to lift exports in most provinces back to pre-recession levels. Foreseeable, but not before 2011.
The views expressed here are those of the author, and not necessarily of Export Development Canada.