While it is harder to track, New Brunswick’s services exports are critically important

While in Brazil on vacation recently I decided to look up New Brunswick exports to South America’s largest country.  As I suspected the total value of exports from New Brunswick is minuscule – the total value of merchandise exports has been in decline and was under $3 million in 2018.

But that doesn’t tell the whole story.

In Brazil, New Brunswick-based McCain Foods is a major supplier of French Fries.  While they don’t export fries from New Brunswick, the head office is here and generates a lot of local economic benefit from exporting.  Firms such as Remsoft and Eco Technologies Ltd. have significant operations in Brazil (in fact Marc Maurice from Caraquet-based Eco Technologies Ltd. was on the same airplane as I).  Atlantic Education Inc. (AEI) is in Brazil selling NB high school curriculum and convincing students to study in New Brunswick.  And the last time I talked with the folks at ExxonMobil they were providing a number of services to clients in Brazil from their Moncton centre.  And you know what?  There are even a few tourists coming this way from Brazil – mostly to visit their relatives now living in the province (tourism is a large export industry for New Brunswick).

McCain french fries on sale at a grocery store in Sao Paulo (produced in Argentina)

These are a few examples where New Brunswick is generating more services-based export based revenue which is not showing up in the merchandise export revenue statistics published by Statistics Canada.   Some may not be showing up at all because it may be flowing through another province.

According to Statistics Canada services-based export revenue (international and interprovincial) reached nearly $7 billion in 2015.  If you back refined oil exports out of our merchandise export revenue services are now almost equivalent to goods exports.  Add up all the seafood, forest products, manufactured products and other goods (except refined oil) and they are now basically on par with business services, tourism, IT, engineering, education and other services exports.

I don’t think we do a particularly good job at understanding this trend let alone trying to do more to proactively develop services-based exports.

Across Canada, international services export revenue is up 29 percent between 2007 and 2015.  It’s actually dipped slightly for New Brunswick.

This is the future.  Service industries will drive national export revenue.  How will we boost New Brunswick’s services exports?  Education, tourism, IT, engineering, business services, head office services, finance, insurance – all areas where we have some expertise.  Can we compete?

 

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