EclectEcon

With world demand for energy and food exploding, it is not surprising that exports to the rest of the world from Canada's provinces which specialize in the production of those products are also growing rapidly.

At the same time, the decline in new-home building and renovations, especially in the US, is hitting the timber-producing sectors of British Columbia (and to some minor extent Ontario and Quebect) pretty hard.

Meanwhile, because of the rapid appreciation in the Canadian dollar, manufactured goods, produced primarily in Ontario and Quebec, are in much less demand in the US.

Put all these effects together and overall there has been a decline in Canadian exports, but not from the prairie provinces, which export gobs of energy and food.

As Peter Hall writes,

Why the differences? It’s largely about what’s for sale. Central Canada has the automobile and auto parts industries, machinery and equipment, and a range of primary and consumer products. Demand for these products has faltered across the board, with key industries suffering double-digit declines. Forestry, critical to British Columbia’s exports, is suffering as the US housing market implodes. In contrast, searing global demand for energy, agri-food products and fertilizer are a boon for the oil-and-gas and bread-basket provinces. ...

Will this turning of the provincial growth tables persist? The boom in the Prairies will not fade fast. Energy prices are forecast to fall to more reasonable levels later this year, but strong investment will, on balance, ensure higher export volumes. Prices for wheat and other coarse grains will continue to rise as global food supplies remain stretched, ensuring strong export activity. Fertilizer shipments, another key growth source, will continue to expand as food shortages bring more marginal arable land into production worldwide.