Somebody took issue with my TJ column this morning indicating surprise that I’m against breaking down the barriers between interprovincial trade. I asked them to read it again. I specifically say I am not against free trade but I think this is a good time to look at how we win/lose from interprovincial trade and think about how we can bolster certain opportunities.
As you can see below, we have a $2.5 billion interprovincial trade deficit every year (this is only trade between provinces) – we import all our cars, electronics, etc. from international trade). For most goods and services, we have a trade deficit with other provinces. We have a surplus on wood products and refined petroleum but we have a deficit on the vast majority of services. In fact, as I point on in the column if it wasn’t for call centres (Administrative and support services), New Brunswick would have an even more pronounced deficit in services.
I also say in the column that NS does not have nearly as bad an interprovincial trade deficit as NB so it is not an issue of size.
The point is that traders need something to trade. If we are importing specialized financial services, we should be exporting engineering services (i.e. like the SJ oil and gas engineers). If we are importing marketing and communications services, we should be exporting software development.
Or we can settle for exporting wood and oil and importing all our high value services.
The other point I was making is that these big deficits should be a wake up call for local service providers. Why do we have a $481 million deficit in other finance and insurance services? Why do we have a $1.1 billion deficit in wholesale margins? Is that an opportunity for local firms?
Finally, I say that if we are importing hundreds of millions worth of services, we may want to look at importing the firms that go with that economic activity. If a firm in Toronto is doing $10 million worth of business in New Brunswick, that may be enough impetus for them to set up an office here, focus on a niche market and become a service export from here.
That’s all. I’m not anti-free trade.
Interprovincial trade position – New Brunswick (2010)