The export bandwagon deconstructed again

The TJ has a story this morning talking about NB’s robust forecast for exports over the next couple of years. I have no problem with the content of the story up to this point when the expert states:

“New Brunswick is punching above its weight in both years. That will help the province get back on its feet in a big way after suffering in 2009,” Hall said.

I prefer to take the oil refinery out of my analysis of exports because it massively distorts the picture and leads experts like this to paint a false picture.  If the value of Irving refinery exports comes back to 2008 levels, that will add $2 billion worth of exports – with hardly a single new job created and yet Mr. Hall says this will help the province get back on its feet in a big way?  How?

There is a far greater link between the forestry industry and “getting back on its feet” as every million in incremental forestry exports generates direct jobs harvesting trees, trucking, sawmills, etc.  The Irving Refinery is a great economic driver for Saint John and New Brunswick but that is not reflected in the export data and in fact allows politicians to crow while distorting facts.

Remember Kirk Macdonald crowing that exports rose by “a billion with a ‘b’ Mr. Speaker” after the new refinery expansion came online while the total value of the rest of exports declined – he never mentioned that and it was (and is) a serious problem.  You can expect Liberal politicans to talk now about leading the country in export growth without ever mentioning that exports from New Brunswick not including oil and gas are down 31% over 10 years.

I have actually heard EDC presentations on exports in New Brunswick and can’t recall the economist ever mentioning the economic impact of certain kinds of exports versus others.

From the article:

Prince Edward Island, meanwhile, will see its exports grow by a “modest” two per cent this year and by six per cent in 2011.

This is Exhibit A of my point.  PEI has built a whole new aerospace industry that has created 900 new jobs (adjusted for population that would be the same as 6,000 new jobs in New Brunswick) and we get the message that NB is booming and PEI is modest.

It’s a mistake.  We need to start assigning economic impact to certain categories of exports.  LNG natural gas exports from New Brunswick generate far less value to the province than indigenous natural gas exports because the latter generates E&P activity and royalties.  The oil refinery has 800 (?) jobs (anyone know the real # here?) whether the value of exports is $5 billion or $8 billion (admittedly there may be some job losses – I am not sure.

It’s time to start aligning the value of exports with the economic impact in the province.  Journalists as well should draw this distinction when writing stories about exports.  Telling New Brunswickers we will “get back on our feet” because of the increased value of refined exports is not the right message.

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