OTTAWA, Ont. – Provincial and territorial economies have relied more and more on interprovincial exports as a key source of economic growth since 2000.

So says a recently released Statistics Canada report, which shows interprovincial exports have fared better than international exports since 2000. This represents a marked shift from the situation between 1992 and 2000, when international sales grew at a rapid rate, outpacing gains in interprovincial exports.

During the 1990s, Canada’s international exports grew at an average annual rate of 12.4 per cent, while interprovincial trade expanded at only half that pace (an average of 6.3 per cent).

From 2000 to 2002, interprovincial exports rose at a slower, but still robust, annual rate of 3.2 per cent. At the same time, international exports actually declined at an annual pace of 2.1 per cent.

Still, foreign sales of goods and services in 2002 were nearly double the level of interprovincial exports. Provinces and territories sold $443.1 billion abroad, and $232.5 billion within Canada.

In 2002, interprovincial exports overall accounted for about one-fifth of Canada’s total economic output as measured by gross domestic product (GDP). This proportion was virtually the same as it was in 1992.

However, international exports accounted for 38 per cent of GDP in 2002, up substantially from 26 per cent a decade earlier.

From 2000 to 2002, interprovincial exports grew in each of the provinces. Gains in international sales were concentrated in Atlantic Canada and Manitoba.

Atlantic provinces: Increased reliance on interprovincial exports except for New Brunswick

Nowhere was the increased reliance on interprovincial exports across Canada more evident than in Newfoundland and Labrador, according to the study. From 2000 to 2002, interprovincial exports from the province rose at almost three times the average annual growth rate during the 1990s.

In contrast, its growth in international exports decelerated considerably between the two periods.

In Prince Edward Island, interprovincial exports grew at an annual average rate of 7.3 per cent since 2000, almost triple the average gain of the nineties. Interprovincial exports were as important to the province’s economy as foreign markets.

Nova Scotia increased its reliance on interprovincial exports from 2000 to 2002, as sales to other provinces rose at double the rate of international exports.

Sales of natural gas were a key factor in both gains, following the start of production of the Sable Island gas project in 2000.

New Brunswick was Canada’s most export-oriented economy in 2002. It was also the only province in which the growth in international exports from 2000 to 2002 outstripped the growth in interprovincial exports.

Central Canada: Strength in exports to other provinces, weakness in sales abroad

Quebec’s foreign exports fell sharply from 2000 to 2002, while its interprovincial exports maintained virtually the same pace of growth as they did during the 1990s.

The decline in international trade was led by a sharp drop in exports of information and communication technology products and related equipment.

Gains in interprovincial exports from 2000 to 2002 were due to pharmaceutical products, the production of which surged.

Ontario companies have exported considerably less to foreign markets since 2000, and considerably more to other provinces.

International exports remained key to the economy of Ontario, even though they declined at an annual average rate of 0.8 per cent from 2000 to 2002. This was in sharp contrast to the period from 1992 to 2000, when they had increased at an average rate of 12.4 per cent.

In 2002, international exports accounted for 46 per cent of Ontario’s GDP, the highest proportion among the provinces. This compares with only 19 per cent for interprovincial exports.

Western Canada: Sharp decline in international exports except in Manitoba

Manitoba has been the only province that consistently exports more to other provinces than it does to foreign nations. In 2002, Manitoba exported $11.8 billion to other provinces, compared with exports of $10.4 billion abroad.

Manitoba was the only province outside Atlantic Canada that recorded a gain in international exports since 2000. Interprovincial exports, however, grew marginally faster than foreign exports.

Saskatchewan has incurred a marked slowdown in the growth of both interprovincial and international exports since 2000. The decline was, however, much more pronounced for foreign sales.

Exports still remain a key element of Saskatchewan’s economy. In 2002, total exports accounted for almost two-thirds (65 per cent) of Saskatchewan’s GDP.

Alberta incurred the sharpest slowdown among the provinces in the growth rates of both interprovincial and international exports from 2000 to 2002. Nevertheless, its interprovincial exports performed better than foreign sales.

The deceleration in Alberta’s international and interprovincial exports since 2000 was led by decreased exports of energy-related commodities.

From 2000 to 2002, British Columbia’s international exports plunged at an average annual rate of 7.7 per cent, the biggest decline among the provinces. During the 1990s, in contrast, its international exports rose at an average rate of 9.7 per cent. The decrease after 2000 was led by declines in electric power and forestry-related products.

In British Columbia, overall exports accounted for only 42 per cent of the province’s economic output in 2002, the smallest proportion among the provinces. Interprovincial exports accounted for only 14 per cent of its GDP, again the smallest proportion.

Territories: Gold loses lustre in Yukon, diamonds shine in Northwest Territories

Yukon was the only province or territory in which both interprovincial and international exports have declined since 2000. The key factor in international exports since 2000 has been the decline in gold.

In the Northwest Territories, continuing rapid growth in diamond exports to foreign markets led to a substantial increase in international exports from 2000 to 2002.

In Nunavut, international exports were lower since 2000, driven by a decline in metal ores.

The Statistics Canada report The Performance of Interprovincial and International Exports by Province and Territory Since 1992 (11-621-MIE2004011, free) is now available online in the Analysis in Brief series at www.statscan.ca

– This article courtesy of Statistics Canada