Path to Recovery Challenging for Canada’s Regions

(Export Development Canada – Peter G. Hall)

This 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.

Pan 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.

Unfortunately, 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.

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